'Hair Loss Shampoo' TS Trillion Former CEO Wins First Trial in Loan Lawsuit...Future of Management Dispute

First Trial in Loan Lawsuit, Former CEO Jang Gi-yeong Wins Verdict
'Suspension of Stock Trading' Rehabilitation Application Case Awaits Supreme Court Final Decision

Jang Ki-young, former CEO of TS Trillion, famous for its "hair loss shampoo," won the first trial in a loan claim lawsuit against the company. Previously, as Jang demanded the repayment of the loan and separately filed for corporate rehabilitation, and with stock trading frequently suspended, small shareholders are now closely watching the current management's future response plans.

According to sources in the investment banking (IB) industry and legal circles on the 24th, the Seoul Southern District Court Civil Division 15 recently ruled in favor of former TS Trillion CEO Jang Ki-young in the first trial of the loan claim lawsuit he filed against the company.

Earlier, Jang had pushed for the sale of TS Trillion's management rights last year, but during the process of changing management before the full payment of the sale balance, conflicts arose with the current management over the composition of the board of directors. As the dispute intensified, Jang filed this lawsuit in February, demanding the repayment of a loan amounting to 11 billion KRW that he had lent while serving as CEO.

Kim Yong-chae, CEO of TS Trillion, and the current management stated, "In the past, former CEO Jang said to repay slowly without a fixed due date, and the company accepted that," adding, "If the court ruling results in partial offsetting, the loan will be repaid accordingly, and even if the ruling orders full repayment, we can proceed without any issues."

Subsequently, the company prioritized repaying 6.8 billion KRW, and the first trial ruled in favor of Jang for the remaining approximately 4.4 billion KRW. Regarding the first trial ruling, CEO Kim said, "We plan to review the judgment and take appropriate legal actions such as appeals," expressing the intention to resolve the loan issue separately from Jang's corporate rehabilitation filing and the stock trading suspension incident. So far, Jang has been involved in various legal disputes over management rights, including lawsuits for nullification and cancellation of shareholder meeting resolutions, requests to inspect and copy accounting books, and corporate rehabilitation and bankruptcy filings.

In particular, with repeated corporate rehabilitation and bankruptcy filings causing stock trading to be suspended three times this year alone, small shareholders' frustration is growing. On April 11, Jang filed for bankruptcy against the company but withdrew the application about two weeks later, during which TS Trillion's stock trading was suspended once. Subsequently, when Jang filed for corporate rehabilitation on July 1, trading was suspended again. The Seoul Rehabilitation Court dismissed the rehabilitation application on the grounds that "it is difficult to see that the company is in a state of excessive debt or insolvency or likely to be so," and the Seoul High Court also dismissed Jang's appeal on the same grounds, leading to the resumption of stock trading.

However, due to Jang's re-appeal, stock trading has been suspended again since September 20. The Supreme Court is currently continuing to review the re-appeal case regarding the rehabilitation application. According to the Financial Supervisory Service's electronic disclosure system, as of the first half of this year, TS Trillion's total assets are approximately 70 billion KRW, and total liabilities are about 39.4 billion KRW. An industry insider said, "It will be difficult to overturn the prior judgment on the company's ability to pay," and added, "The Supreme Court is expected to make a final decision early next year, which will lead to the resumption of stock trading."

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