Court Issues Preservation Order and Comprehensive Injunction Against Tmon and Wemakeprice... Representative Hearing Scheduled This Week

The court issued preservation orders and comprehensive injunctions against TMON and WEMAKEPRICE, which caused a refund crisis due to delayed settlements.

On the 29th, the delay in settlement of sales proceeds from Tmon and Wemakeprice continues at the Tmon headquarters building in Gangnam-gu, Seoul.
[Image source=Yonhap News]

On the 30th, the Seoul Bankruptcy Court announced that it had issued preservation orders and comprehensive injunctions against TMON and WEMAKEPRICE, which filed for corporate rehabilitation the day before. A court official stated, "This is to prevent unfairness among stakeholders, managerial confusion, and difficulties in the company's survival that could hinder the debtor's restructuring."

The preservation order is a measure to prevent the debtor (company) from arbitrarily hiring employees or disposing of company assets to preferentially repay certain creditors, serving as a protection for creditors. Conversely, the comprehensive injunction freezes creditors' claims to prevent them from securing major company assets through forced execution, provisional seizure, or auction before the start of the corporate rehabilitation process. It is applied when individual creditors' rights actions flood in and interfere with the rehabilitation procedure.

The bankruptcy court plans to hold a hearing within this week to determine whether to commence the corporate rehabilitation process. It is expected that Ryu Gwang-jin, CEO of TMON, and Ryu Hwa-hyun, CEO of WEMAKEPRICE, will attend the closed hearing.

Typically, the court must decide whether to commence corporate rehabilitation within one month. However, since both companies have applied for the Autonomous Restructuring Support (ARS) program, the decision may be postponed for up to three months.

The ARS program is a system that suspends the rehabilitation process and allows the company and creditors to freely negotiate repayment plans and other measures to minimize damage to both parties. Once a creditors' council is formed, the decision on whether to commence rehabilitation can be deferred in one-month increments for up to three months. If amicable agreements are reached through voluntary negotiations, the rehabilitation application is withdrawn after concluding a voluntary agreement.

Meanwhile, the Seoul Bankruptcy Court assigned the corporate rehabilitation cases of TMON and WEMAKEPRICE to the Rehabilitation Division 2 (Presiding Judge Ahn Byung-wook) on the same day. The rehabilitation court assigns socially significant cases or cases with debts exceeding 300 billion won to the presiding judge's panel, and this case meets both criteria.

This content was produced with the assistance of AI translation services.