Court Approves Korea Pizza Hut's 'Voluntary Restructuring'... One-Month Delay in Rehabilitation Start
The Seoul Rehabilitation Court has approved the Voluntary Restructuring Support (ARS) program applied for by Korea Pizza Hut.
The 12th Division of the Seoul Rehabilitation Court (Chief Judge Oh Byung-hee) announced on the 11th that it had completed the hearing procedure for the representative of Korea Pizza Hut and approved the ARS process. The court has postponed the decision on whether to commence rehabilitation proceedings until the 11th of next month.
The ARS program is a system in which a company autonomously negotiates repayment plans with creditors. The rehabilitation process is suspended for up to three months.
Earlier, Korea Pizza Hut applied for the commencement of rehabilitation proceedings and the ARS program at the Seoul Rehabilitation Court on the 4th.
Korea Pizza Hut applied for the commencement of rehabilitation proceedings and ARS because it was at risk of having the compensation amount forcibly executed following a lawsuit filed by franchisees.
Last month, Korea Pizza Hut lost the second trial in a lawsuit filed by 94 franchisees against the headquarters demanding the return of unjust enrichment. The first trial ordered Korea Pizza Hut to compensate the franchisees 7.5 billion KRW, and in the second trial, the compensation amount increased to 21 billion KRW.
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A Korea Pizza Hut official explained, “We are currently undergoing the Supreme Court appeal process regarding the results of the differential franchise fee appeal filed by some franchisees. Meanwhile, on the 4th of last month, the franchisees participating in the lawsuit proceeded with seizure and collection measures on the bank account used by the headquarters to handle business operating costs, making it unavoidable to commence rehabilitation proceedings.”
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