Seoul Rehabilitation Court to Hear Timon and Wemakeprice CEOs' 'Rehabilitation Applications' on Next Month 2nd

The court will summon the representatives of TMON and WEMAKEPRICE, which filed for corporate rehabilitation due to a large-scale delay in sales settlement and refunds, for hearings on the 2nd of next month.

Qoo10 CEO Koo Young-bae stands up to apologize for the 'Timon and Wemakeprice settlement and refund delay incident.'
[Image source=Yonhap News]

According to the legal community on the 30th, the Seoul Bankruptcy Court Rehabilitation Division 2 (Presiding Judge Byeongwook Ahn) will hold corporate rehabilitation hearings for TMON and WEMAKEPRICE at 3:00 PM and 3:30 PM respectively on the 2nd of next month.

It is expected that Ryu Gwangjin, CEO of TMON, and Ryu Hwahyun, CEO of WEMAKEPRICE, will attend the hearings, which will be held privately. Through the representatives' hearings, the court will review the debtor's overview, status of affiliated companies, assets and liabilities, reasons for filing for rehabilitation, and decide whether to commence rehabilitation proceedings.

On the morning of the same day, the Seoul Bankruptcy Court issued preservation orders and comprehensive injunctions against TMON and WEMAKEPRICE. 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 to protect creditors.

The comprehensive injunction, conversely, freezes creditors' claims to prevent them from securing major company assets through compulsory execution, provisional seizure, auction, etc., before the commencement of corporate rehabilitation. This is done when individual creditors' rights actions flood in and hinder the progress of rehabilitation proceedings.

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 rehabilitation proceedings and allows the company and creditors to freely negotiate repayment plans and other measures to minimize damage to both parties. Once a creditors' committee is formed, the decision on whether to commence rehabilitation proceedings can be deferred in one-month increments for up to three months. If amicable negotiations are reached through the autonomous consultation process, the rehabilitation application is withdrawn after concluding an autonomous agreement.

Meanwhile, TMON and WEMAKEPRICE filed for corporate rehabilitation at the Seoul Bankruptcy Court the previous day, stating that "there are limits to overcoming the deterioration of cash flow." Currently, it is estimated that there are over 40,000 creditors related to TMON and over 60,000 creditors related to WEMAKEPRICE. The creditors are mainly composed of commercial trading companies.

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