Court Decides to Commence Rehabilitation Proceedings for Hanguk Pizza Hut
The court has decided to commence rehabilitation proceedings for Korea Pizza Hut.
On the 16th, the 12th Division of the Seoul Rehabilitation Court (Chief Judge Oh Byung-hee) announced that it had decided to initiate rehabilitation proceedings for Korea Pizza Hut. The deadline for submitting the rehabilitation plan is March 20 of next year.
The court stated, "During the ARS period, no amicable agreement was reached between Pizza Hut and the creditors," adding, "Therefore, the ARS period was not extended further, and it was determined that there are grounds to commence rehabilitation proceedings, leading to the decision to initiate them." The ARS program is a system where a company autonomously negotiates repayment plans with its creditors.
Following the decision to commence rehabilitation proceedings, Korea Pizza Hut must submit a list of creditors by January 2 of next year. The period for creditor claims is until January 16 of next year. The investigation committee will be handled by Taeseong Accounting Corporation. The deadline for submitting the investigation report is February 20 of next year.
Earlier, on the 4th of last month, Korea Pizza Hut applied to the court for the commencement of rehabilitation proceedings and the ARS program. This was due to the risk of forced execution of compensation following a lawsuit filed by franchisees.
Korea Pizza Hut lost in the second trial of 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 with 7.5 billion KRW, and in the second trial, the compensation amount increased to 21 billion KRW.
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In response, a Korea Pizza Hut official stated, "The headquarters was forced to commence rehabilitation proceedings due to seizure and collection measures being taken on the bank account handling business operation costs."
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