Real decisions, read issue by issue.

대법원은 채무자 회생 및 파산에 관한 법률 제100조 제1항 각호는 관리인이 회생절차개시 이후 채무자의 재산을 위하여 부인할 수 있는 행위를 네 가지 유형으로 나누어 규정하고 있다. 이러한 네 가지 유형은 모두 공통적으로 ‘회생채권자 또는 회생담보권자(이하 ‘회생채권자 등’이라고 한다)를 해하는 행위’일 것, 즉 행위의 유해성을 부인권 행사의 요건으로 하고 있다. 여기서 ‘회생채권자 등을 해하는 행위'에는 채무자의 일반재산을 절대적으로 감소시키는 사해행위 외에 채권자 간의 평등을 저해하는 편파행위도 포함되므로, 채무자가 제3자로부터 자금을 차입하여 특정 채권자에게만 변제를 한 경우 그 변제는 다른 채권자와의 평등을 해하는 것으로서 원칙적으로 부인의 대상이 된다.

원심(서울고법 2015나2038079)은 동양인터내셔널이 동양시멘트로부터 받은 선수금으로 원고에 대한 대여금채무를 변제한 행위가 채무자회생법 제100조 제1항 제1호, 제3호의 부인 대상이 된다는 관리인인 피고의 주장을 배척하였다. 대법원 주문은 "상고를 기각한다. 상고비용은 피고가 부담한다."라고 선고하였으며, 그 이유는 다음과 같다. 대법원은 2013. 9. 27. 18:00경 선수금이 입금된 뒤 20:10경 그중 4,877,527,123원으로 대여금이 변제된 시기와 경위, 그룹 전략기획본부의 지시에 따른 자금지원이라는 동기, 선수금에는 변제기와 이율이 정해져 있지 않았던 점 등에 비추어 선수금 일부를 대여금 변제에 쓰기로 하는 묵시적 약정이 있었고 변제 후 재산 감소도 없었다고 보았다. 이 변제행위는 전체적으로 회생채권자 등을 해하지 않는다고 하여 원심 판단을 수긍하고 상고를 기각하였다.

쟁점 검토는 채무자 회생 및 파산에 관한 법률 제100조 제1항의 구성요건 분석, 원심 인정 사실의 포섭 적정성, 반대 해석의 성립 가능성 순서로 정리한다. 참조판례로 인용된 대법원 2002. 9. 24. 선고 2001다39473 판결(공2002하, 2503)의 기준과 본건 사실관계가 같은 점과 다른 점을 비교한다. 당사자 주장과 객관적 서증 사이의 정합성을 항목별로 점검한다.

채무자회생법 제100조의 부인 대상 행위 규정이 개정되거나, 차입금 변제와 부인권의 관계를 다룬 후속 판례가 기준을 바꾸면 이 판독을 다시 확인합니다.

대법원은 권리자가 실제로 권리를 행사할 수 있는 기회가 있어서 권리행사의 기대가능성이 있었음에도 불구하고 상당한 기간이 경과하도록 권리를 행사하지 아니하여 의무자인 상대방으로서도 이제는 권리자가 권리를 행사하지 아니할 것으로 신뢰할 만한 정당한 기대를 가지게 된 다음에 새삼스럽게 그 권리를 행사하는 것이 법질서 전체를 지배하는 신의성실의 원칙을 위반하는 것으로 인정되는 결과가 될 때에는 그 권리의 행사가 허용되지 않는다고 보아야 한다. 권리자가 회생절차 진행 중인 채무자를 상대로 권리를 행사하는 경우 신의성실의 원칙을 위반하는지는 권리행사 이전에 회생절차에서 보인 태도와 회생절차 내에서 부여받은 지위, 권리행사를 할 당시 회생절차의 진행단계 등에 비추어 권리자의 권리행사가 집단적·포괄적 채무처리절차의 성질을 가지는 회생절차 및 그에 참여하는 다른 회생담보권자, 회생채권자 등 이해관계인들에게 어떠한 영향을 미치는지, 채무자의 효율적인 회생을 도모하고자 하는 회생절차의 목적에 반하는 결과가 발생할 위험이 있는지, 권리행사를 허용하는 경우 권리자가 이미 회생절차 내에서 부여받은 지위에 비추어 부당하게 이익을 얻게 되는지 등을 종합적으로 고려하여 판단하여야 한다. 갑 주식회사가 을 의료법인과 의료기기인 기계에 관하여 리스계약을 체결하고 을 법인에 기계를 리스해 주었는데, 을 법인에 관한 회생절차가 개시되자 갑 회사가 리스계약에 따른 채권을 회생담보권으로 신고하였다가 을 법인이 위 기계를 이용하여 계속적으로 영업활동을 하는 것을 전제로 한 회생계획이 인가된 후 ‘리스계약에서 정한 바에 따라 계약을 해지하고 환취권을 행사하였다.’고 주장하면서 위 기계의 인도를 구한 사안에서, 갑 회사는 회생절차에서 회생담보권자로서의 권리를 적극적으로 행사한 점, 갑 회사는 회생계획에 이의를 제기하거나 그 인가결정에 즉시항고를 하지 않음으로써 해지권 및 환취권 행사를 통해 위 기계의 인도를 요구하지 않을 것과 같은 태도를 보였던 점, 갑 회사가 위 기계를 인도받아 가면 회생계획이 정상적으로 수행될 수 없어 다른 회생담보권자, 회생채권자 등 이해관계인들은 회생계획에 따른 변제를 제대로 받지 못하게 되는 불이익을 입을 가능성이 큰 점, 인가결정까지 받은 회생계획이 제대로 수행되지 못한다면 다수의 이해관계인들이 적지 않은 시간 동안 노력을 들여 상당한 단계까지 진행하여 온 회생절차는 무용하게 되므로 사회·경제적으로 바람직하지 않고, 을 법인의 원활한 회생을 저해하여 채무자 회생 및 파산에 관한 법률의 목적과 취지에 반하는 결과를 초래할 수 있는 점, 갑 회사는 신고한 회생담보권 전액을 회생계획에 따라 변제받을 수 있는 지위를 가지게 되었으므로 위 기계까지 반환받는다면 이중으로 부당하게 이익을 얻게 될 수 있는 점에 비추어, 갑 회사가 리스계약에서 정한 바에 따라 해지권을 갖는 경우라도 리스계약을 해지하고 환취권을 행사하는 것은 신의성실의 원칙에 비추어 허용될 수 없는 것이라고 볼 여지가 있는데도, 이를 심리하거나 고려하지 않은 원심판단에 심리미진 등의 잘못이 있다고 한 사례.

원심은 피고가 갑 회사에게 해지권이나 환취권이 없고, 설령 있더라도 그 행사가 신의성실의 원칙에 반하여 허용될 수 없다고 항변한 것을 모두 배척하고, 갑 회사가 해지권 및 환취권을 행사할 수 있다고 보았다. 회생절차에서 보인 태도와 회생절차 내에서 부여받은 지위, 권리행사 당시 회생절차의 진행단계 등에 관한 사정은 전혀 심리하거나 고려하지 않았다. 대법원 주문은 "원심판결을 파기하고, 사건을 서울고등법원에 환송한다."라고 선고하였으며, 그 이유는 다음과 같다. 대법원은 권리자가 회생절차 진행 중인 채무자에게 권리를 행사하는 것이 신의성실의 원칙에 반하는지는 회생절차에서의 태도와 지위, 진행단계, 이해관계인에게 미치는 영향, 회생절차의 목적에 반하는 위험, 부당한 이중이익 여부를 종합적으로 고려하여 판단해야 한다고 설시했다. 갑 회사는 회생담보권자로 권리를 적극 행사하고 회생계획에 이의를 제기하지 않은 채 인가를 받았으며, 기계를 회수하면 회생계획 수행과 이해관계인의 변제가 어려워지고 부당하게 이중의 이익을 얻을 수 있어 해지권과 환취권 행사가 신의성실의 원칙상 허용되지 않을 여지가 있는데도 이를 심리하지 않은 원심에 심리미진과 법리오해의 잘못이 있다고 보았다. 대법원은 원심판결을 파기하고 사건을 서울고등법원에 환송했다.

쟁점 검토는 민법 제2조의 구성요건 분석, 원심 인정 사실의 포섭 적정성, 반대 해석의 성립 가능성 순서로 정리한다. 종전 대법원 판례의 법리와 본건의 구체적 사실관계가 갈리는 지점을 조문 문언에 비추어 비교한다. 당사자 주장과 객관적 서증 사이의 정합성을 항목별로 점검한다.

채무자 회생 및 파산에 관한 법률이 개정되면 이 판독을 다시 확인합니다.

An act prejudicial to the estate under Article 391 subparagraph 1 of the Debtor Rehabilitation and Bankruptcy Act includes not only acts reducing the estate but also preferential acts toward specific creditors. Even if it is an act extinguishing an obligation while the debtor is in a state of insolvency, if it is exchanged contemporaneously with new services and there is a reasonable proportion between the performance and the extinguished obligation, it is in principle not a prejudicial act. Whether an act is prejudicial is determined on the basis of the time of the act, and an act subject to a condition precedent is the same absent special circumstances. A conditional assignment was formed upon delivery of the written demand for assignment of the national tax refund, and the subsequent agreement and notice merely served to satisfy the opposability requirement, so the time of delivery is the time of the act. Although the debtor was insolvent at the time of delivery, it was a substantially contemporaneous exchange for services and the amounts were in balance, and therefore it was found not to be subject to avoidance.

The court below rejected the claim for avoidance on the ground that the assignment to Defendant 1 fell within a case that was socially necessary and unavoidable. The court below found that the assignment to Defendant 2 could not readily be regarded as socially necessary, reasonable, or unavoidable. The plaintiff's successor in the lawsuit, Defendant 2, and the independent party intervenor each filed final appeals in dissatisfaction, and the matters subject to avoidance, the amount of the fees, the reasonableness, and the good faith were disputed. The Supreme Court dismissed all final appeals and imposed the costs of the final appeal on each losing party.

We organize the issues in the following order: whether the act is preferential; contemporaneous exchange and proportion; the time of the act and the condition precedent; excessiveness and reasonableness of the fees; and the good faith of the beneficiary. The court below rejected the claim for avoidance on the premise that the assignment to Defendant 1 was a prejudicial act, invoking social necessity and unavoidability, while the Supreme Court found that premise inappropriate but the conclusion proper. We contrast the application of Article 391 subparagraph 1 of the Debtor Rehabilitation and Bankruptcy Act and Articles 2 and 686 of the Civil Act. Supreme Court Decision 2011Da56637, 56644 decided October 13, 2011 and Supreme Court Decision 2015Da240447 decided September 21, 2017 are the subjects of comparison.

We examine this when the issues of contemporaneous exchange and reasonable proportion, and the time of an act subject to a condition precedent, arise again.

The court takes the view that once, after accepting a supplementary filing, the court has completed the special examination date, a dispute over the requirements for supplementation is not permitted. The determination of the lawfulness of the supplementary filing is a procedural determination concerning whether to accept it, and the claim determination and confirmation procedure is not a procedure that forfeits the claim; this constitutes the basis. It is stated that the determination and confirmation proceedings for rehabilitation claims are to the same effect, and therefore no allegation of a defect in the requirements for supplementation may be raised. However, if there is a reason why participation within the filing period could not be expected, supplementation is recognized as possible even after the interested persons' meeting. A statement as to lawfulness is not an objection under Article 170, paragraph (1), and the gist is that whether an interested person has objected is determined by reference to the intent to block finalization.

The defendant filed a supplementary filing after the approval of the rehabilitation plan, asserting a damages claim arising from the administrator's statutory notice of termination. The rehabilitation court held a special examination date, the administrator submitted a table of admissions and denials, and Woori Bank and Saemaul Geumgo added statements in the course of the proceedings. The rehabilitation court entered on the table of creditors to the effect that only the administrator objected, and gave notice to the defendant. The court below found that, since the rehabilitation court had recognized the requirements for supplementation and proceeded to hold the special examination date, a challenge to lawfulness was unavailable, and that an action against the administrator alone was proper, and the plaintiff's final appeal was dismissed.

Arrange the issues in the following order: the effect of acceptance of the supplementary filing and reasons why participation could not be expected, the applicability of an objection under Article 170, paragraph (1), and the order of the parties against whom the application is to be made. The plaintiff's contention is to the effect that there is a defect in the requirements for supplementation and that the statement of Saemaul Geumgo is also an objection, so that the designation of the defendant against whom the action is brought is wrong. In response, verify the content and circumstances of the statements made at the special examination date and the difference between the statements of the administrator and those of other interested persons. The provisions to be checked are Article 152, paragraphs (2) and (3), Article 153, Article 162, and Article 170 of the Debtor Rehabilitation and Bankruptcy Act, and Supreme Court Decision 2011Geu256 and Supreme Court Decision 2014Da82439 serve as points of comparison.

If a reason why participation within the filing period could not be expected is newly confirmed, reconsider whether supplementation is to be permitted. A case in which it is determined whether the statement made at the special examination date stemmed from an intent to block finalization also serves as a criterion.

법원은 인가요건을 직권으로 살피고 인가 결정시를 기준으로 삼아 항고심까지 자료로 판단한다고 보았다. 조사위원의 개시 사정 보고는 진실에 반한다는 등 특별한 사정이 없으면 쉽게 배척하지 않고 복수 보고 중 선택은 현저한 잘못이 없으면 재량으로 본다. 조 분류는 같은 종류를 세분하지 않아도 재량 일탈이 없으면 위법하지 않다고 판단하였다. 공정·형평은 이종 권리 사이 차등과 동종 사이 실질 평등을 뜻하고 같은 종류 안에서도 합리적 이유가 있으면 차등을 허용하되 같은 성질에 대한 이유 없는 차별을 금한다. 수행가능성은 변제 후 건전 재무 가능성을 뜻한다는 점을 확인하고 의견조회 누락은 수행가능성 조항이 아닌 절차 적합 문제로 보며 부결안이 청산가치 이상이면 그대로 권리보호조항으로 삼는 것이 허용된다.

제1심은 주주들에게 의결권을 주어 주주조 100% 가결과 회생채권자조 61.31% 동의에 따른 부결을 거쳐 회생계획을 인가하는 결정을 내린다. 제1심은 부동의한 회생채권자조 중 회원권자를 위해 골프장사용우대권 조항을 더하고 나머지 회생채권자를 위해서는 원래 안을 그대로 권리보호조항으로 삼았다. 재항고인들은 조사보고 선택과 조 분류, 평등원칙과 청산가치, 수행가능성과 권리보호조항을 다투며 재항고하는 흐름이다. 원심은 제1심결정을 유지하였고 대법원은 재항고를 모두 기각하였다.

사건팀은 인가시 기준자료부터 확정하고 조사보고 선택과 주주 의결권 순서로 검토한다. 다음에 조 분류와 종류 내 차등의 합리적 이유 그리고 청산가치와 수행가능성 및 권리보호조항 순서로 정리한다. 반대쪽 논리는 부채초과로 주주 의결권이 없고 담보신탁 우선수익자를 다른 회생채권자와 나눠야 하며 차등이 평등 위반이라는 주장이다. 확인할 조문은 채무자회생법 제243조와 제236조와 제217조와 제218조와 제244조이고 2014마1427 결정과 2007마919 결정을 대조한다.

골프장 영업 유지에 필요한 동의와 출자전환·무상소각 구조가 함께 있을 때 다시 본다.

The panel held that, since only the shareholders change through the subscription of new shares and there is no transfer of business, it does not violate Article 27 of the Installation and Utilization of Sports Facilities Act. It states that equality in fairness and equity is viewed as substantive equality, and that reasonable differentiation may be made even within the same class of ordinary rehabilitation claims. It distinguished that the lender of the loan related to the trust may request disposition of the golf course facilities and therefore consent must be obtained for the performance of the rehabilitation plan, so there is reason for the differentiation between 67.13% and 17%. A claim in objection, where there is no objection to the exercise of voting rights, may also be voted in the reported amount, and classification without subdivision of claims is recognized as discretionary. A resolution without service of the amended draft is a procedural violation, but it was determined that approval may be granted on the ground, among others, that the outcome of the resolution would not have been different.

The rehabilitation court approved the plan under which the Golfzon County consortium subscribes for new shares and convertible bonds. In an immediate appeal against a ruling on the approval order, the court below rejected the reappellants' arguments. The reappellants bring a reappeal on the grounds of violation of the Installation and Utilization of Sports Facilities Act and violation of the principle of equality, among others. The disposition was the dismissal of all reappeals, and the Supreme Court affirmed the conclusion of the order of the court below.

Set the issues in the order of violation of the Installation and Utilization of Sports Facilities Act, fairness and equity, liquidation value, classification of claims, voting rights, amendment procedure, and feasibility of performance. The argument on reappeal was that the differentiation of trust claims contravenes equality and that the resolution without service of the amended draft is unlawful. Compare Article 217 (1), Article 218 (1), Article 243 (1) subparagraph 2, and Article 226 (2) of the Debtor Rehabilitation and Bankruptcy Act. Article 27 of the Installation and Utilization of Sports Facilities Act and Articles 236 and 232 of the Debtor Rehabilitation and Bankruptcy Act were examined together. Review in turn Supreme Court Decision 2013Da85417 and Decisions 98Geu11, 99Geu35, 2014Ma1157, 2005Geu147, and 2013Ma1306.

If a change in assets other than the repayment scheduled through the performance of the rehabilitation plan is confirmed, revisit the liquidation value determination. If matters of permission that differ from the opinion of the administrative agency are revealed, examine feasibility of performance again.

The Supreme Court held that a bankruptcy claim omitted from the creditor list is in principle still covered by the discharge, and that even where the debtor knew of the claim and deliberately left it off, the liability is still released if the creditor knew that bankruptcy had been declared. It read Article 566(vii) as protecting a creditor kept out of the discharge proceedings, who thereby loses the chance to object and to have the grounds for refusing discharge in Article 564 examined, and it cited Supreme Court Decision 2010Da49083 and Supreme Court Decision 2015Da71177 for that protective purpose. It then set out the machinery: where the court examines the debtor it publicises its decision and serves known creditors, and in any event it must fix a period for objections and serve it on the creditors bound by the discharge, who may object within that period under Articles 558(1) and (2), 562(1) and 8. Applying that to these facts, it found that although the claim in issue was omitted, the plaintiff's other claims were listed, so the order fixing the objection period was served on the plaintiff, and the plaintiff therefore knew of the bankruptcy of Defendant 2. The claim in issue was accordingly a dischargeable claim, and the appellate court's contrary holding misconceived Article 566(vii).

Defendant 2 applied for bankruptcy and discharge at the Gwangju District Court under case numbers 2011Hadan1724 and 2011Hamyeon1726. The plaintiff, having received the order fixing the objection period on 8 June 2012 and filed nothing within it, later sued Defendant 2 and Defendant 1. The appellate court, the Seoul Central District Court in its judgment of 26 June 2019 (2018Na71160, 83682), held that the claim in issue was not discharged because Defendant 2 knew of it and did not enter it on the list, and it rejected Defendant 1's argument that the mediation recommendation decision had no effect. On the appeals the Supreme Court ordered: 'The part of the appellate judgment concerning Defendant 2 is reversed, and that part of the case is remanded to the Seoul Central District Court, panel division. Defendant 1's appeal is dismissed. The appeal costs incurred by Defendant 1's appeal shall be borne by Defendant 1.' The participating Justices were unanimous.

Keep the two limbs of Article 566(vii) apart and test them in order. For the first limb, ask what the file shows the debtor knew and what the debtor entered on the list: the Supreme Court did not disturb the finding that Defendant 2 knew of the claim in issue, so that limb was satisfied against the plaintiff. For the second limb, look for the order fixing the objection period, the proof of service and the date of receipt, because that is the only fact the Court needed to find knowledge of the bankruptcy. Then read what the judgment does not say: whether the creditor list itself was served on the plaintiff, what the first-instance court held, why the claim in issue was left off the list, and what the amount of that claim was. Finally set the appellate court's single reason against the Supreme Court's answer to it, and keep Defendant 1's point on the mediation recommendation decision separate, since the Supreme Court found no error in the rejection of it.

A record showing that the plaintiff never received the order fixing the objection period, or that it was served only by publication, would put the second limb itself in issue. A later decision holding that a debtor's deliberate concealment defeats the discharge notwithstanding the creditor's general knowledge would require the reading on this card to be done again.

Citing Civil Act Article 105 and Supreme Court Decisions 94Da1142 and 2015Da245145, the Supreme Court held that where parties dispute a contract's meaning the court must weigh the content, the circumstances of making it, the purpose and the true intention together, reasoning logically and from experience. It therefore upheld the appellate court's reading of 'overdue interest' in clause 2, holding that once the plan was approved that term must be read in its light, and it accepted the 7.5% figure applied to the principal from 26 October 2009 to 31 December 2012. But applying Article 252(1) of the Debtor Rehabilitation and Bankruptcy Act, it held that the first-ranking claim had to be itemised: each post-commencement interest item had to be calculated, and overdue interest at the bank's ordinary-loan rate added to the pre-commencement interest and to each post-commencement item from the day after its own maturity date to 13 November 2013. The appellate court had computed no post-commencement interest items for the first and second years, running interest on the principal alone from 26 October 2009 to 31 December 2012 at 7.5% and then at the overdue rate. That left out the post-commencement interest on the pre-commencement interest falling in the first year, and the overdue interest on the pre-commencement interest and the post-commencement items, so its figure of KRW 2,261,217,396 rested on a misreading of the effect of the alteration of rights.

Daedong Panel Co., Ltd. registered a mortgage for Hana Bank on 20 March 2002 securing up to KRW 4,550,000,000, borrowed against it, and about 19 April 2002 gave the plaintiff two credit guarantee agreements, with final guarantees of KRW 298,400,000 and KRW 400,000,000, as collateral. Rehabilitation was opened on 26 October 2009; on 18 December 2009 the plaintiff paid KRW 703,524,173 and took part of the mortgage by assignment. Hana Bank transferred the claim and mortgage rights on 4 March 2010, and the defendant took over the transferee's position on 30 March 2010. The property sold on 16 October 2013, and the Korea Asset Management Corporation issued its distribution calculation on 13 November 2013. The High Court in Daejeon gave judgment on 12 January 2016 ((Cheongju) 2015Na10272). On the defendant's appeal the Supreme Court ordered: 'The part of the appellate judgment in which the defendant lost concerning the first-ranking claims is reversed, and that part of the case is remanded to the High Court in Daejeon. The remaining appeal is dismissed.'

Start by writing down each plan maturity date and the distribution date, 13 November 2013, because every item is measured from one to the other. Build the first-ranking claim item by item: principal, pre-commencement interest, and each year's post-commencement interest, with the overdue rate applied to each item from the day after its own maturity date. Check what the appellate court actually computed, and note that the Supreme Court rejected the defendant's alternative ground, which would have apportioned fixed post-commencement interest between the clause 1 and clause 2 claims, because that ground assumed the appellate court had applied the plan's post-commencement interest at all. Keep the Article 250(2)(i) holding separate, since the Supreme Court left the appellate court's reasoning on it undisturbed, and find the parting point by setting the appellate court's single interest figure on principal against the Supreme Court's itemised scheme.

A remand judgment from the High Court in Daejeon showing the recalculated first-ranking figure would settle what the omitted items are worth. A plan fixing one maturity date for all interest would remove most of the itemisation problem.

The Supreme Court held that once a delivery judgment is final the possessor cannot dispute the existence of the delivery claim against that party, and cannot rely on a lawful ground of possession it could have pleaded up to the close of argument in the delivery action's trial of fact. But a judgment ordering performance does not change the substantive legal relationship, so it creates no substantive duty to deliver and does not extinguish the lawful ground, and its binding force reaches only the existence of the delivery claim, not a later claim in tort for unlawful possession. It followed that the finalisation of the judgment alone could not make the possession unlawful from the following day, and that a refusal to deliver actively could not simply be declared a tort. The Supreme Court therefore held that the appellate court, deciding the tort issue without any real examination of the elements of tort, had misunderstood the effect of a judgment ordering performance and the basis of liability for unlawful possession.

The plaintiff, a subcontractor who installed the works, terminated the subcontract on the defendant's rehabilitation and refused three requests to dismantle; the defendant obtained permission on 15 April 2011 to resume the works and moved the chattels to storage. This action was filed on 18 July 2012 against the then receiver, and the plaintiff collected the chattels on 6 October 2012 during first instance. The Seoul High Court, in its judgment of 12 June 2014 (2013Na75986), denied liability before finalisation but found unlawful possession of the works afterwards, while holding the crane lawfully kept; both sides appealed on the points adverse to them. The Supreme Court ordered: 'The part of the appellate judgment in which the defendant lost is reversed and that part is remanded to the Seoul High Court. The plaintiff's appeal is dismissed. The application for succession of proceedings filed by the defendant successor applicant is dismissed. The costs arising from that application for succession of proceedings shall be borne by that applicant.' The Justices were unanimous; the new receiver's application failed because the closure decision took effect on 29 April 2015, ending their authority.

Set the two possessions apart first: the works, where the appellate court found unlawful possession only after finalisation, and the crane, where it found no unlawfulness because the plaintiff, though obliged to bear the storage costs, failed to pay them, and because it had unlawfully blocked the site with the crane. On the works, check what the record shows about the plaintiff's own duty to remove after terminating the subcontract, then ask, for each period claimed, whether the file contains any finding of intent or negligence, since the Supreme Court held that the appellate court failed to conduct the necessary examination of the tort elements. Compare the appellate court's reasoning, which drew illegality directly from finalisation, with the Supreme Court's rule that binding force covers only the existence of the delivery claim. Note also that the unjust-enrichment part stood unexamined, because the plaintiff stated no grounds of appeal for it.

A later statute or decision governing the possessor's duty after a final delivery judgment would require this reading of the judgment's effect to be done again. A finding on remand that the defendant retained the works deliberately to force payment of the remaining construction price would change where the line falls on unlawful possession.

The Supreme Court stated the rule in three connected conditions: the grant of security while insolvent is not a disposal harmful to bankruptcy creditors, and so not avoidable under any item of Article 391 of the Debtor Rehabilitation and Bankruptcy Act, if it was made simultaneously and in exchange for a new borrowing, if there is a reasonable balance between the amount borrowed and the price of the secured property, and if it creates no risk that the debtor will hide or give away the borrowed funds to the harm of those creditors. Measured against that rule, the appellate court's findings about the purpose of the borrowing, the absence of any diversion or seizure risk, and the absence of any reduction in the creditors' common security or any loss to them all point the same way. The Supreme Court held that the appellate judgment was sound and did not violate the rules of free evaluation of evidence or contain a contradiction in reasoning. It also held that because the finding that the act did not harm the bankruptcy creditors already covers the point, the appellate court did not fail to examine crisis avoidance by omitting a separate discussion of it, and that the precedent the appellant cited concerned different circumstances.

The bankrupt company, Jeil Mutual Savings Bank, was represented in this action by its bankruptcy administrator, the Korea Deposit Insurance Corporation, as plaintiff and appellant; the defendants were Defendant 1 and eight others, respondents and appellees. The plaintiff sought to exercise the avoidance right over the creation of the security. The appellate court, the Gwangju High Court in its judgment of 10 September 2015 (2014Na1084), rejected the claim, holding that the security-creation act was not a disposal harmful to bankruptcy creditors and that the bank could not be found to have known of such a result. The plaintiff raised five grounds of appeal, the second to the fifth directed at that holding, and the first at the appellate court's additional reasoning that even if the act appeared harmful it was socially necessary and unavoidable so that ordinary creditors had to bear it. The Supreme Court answered the second to fifth grounds first, and treated the appellate court's reasoning on the first ground as hypothetical and additional, so that its correctness could not affect the outcome. The participating Justices agreed, and the Court ordered: 'The appeals are all dismissed. The costs of appeal are borne by the appellant.'

Begin with the act in issue and fix its character on the file: whether the security was granted for an existing debt or simultaneously and in exchange for a new borrowing. Then take the three conditions one by one and set the loan figure beside the price of the collateral, since a break in the reasonable balance moves the act out of the rule the Court stated. Next check what the appellate court found about diversion and seizure of the borrowed funds, because that finding is what answers the third condition, the risk of the debtor hiding or giving away the funds to the harm of bankruptcy creditors. Finally, locate where the lower court and the Supreme Court did not part at all: the Supreme Court simply endorsed the appellate findings, and the plaintiff's first ground failed not on substance but because it was directed at reasoning the appellate court had given only in the alternative.

A record showing that the borrowed funds were diverted or seized after the security was created would reopen whether the risk of harm to the bankruptcy creditors existed at the time of the act. A later amendment to Article 391 of the Debtor Rehabilitation and Bankruptcy Act adding an express item on simultaneous secured borrowing would require the reading to be redone.

The Supreme Court held that after a bankruptcy declaration it is the trustee, not the bankruptcy creditor, who exercises the avoidance right for the estate under Articles 391 and 396 of the Debtor Rehabilitation and Bankruptcy Act, following Supreme Court Decision 2010Da37141, because bankruptcy is a collective and comprehensive procedure for equal and fair payment, and a creditor cannot bring an action to cancel a fraudulent act that presupposes individual enforcement to preserve liable assets for one claim. It read Articles 406 and 347(1) of that Act, which interrupt a cancellation action pending at the declaration and let the trustee succeed to it, as absorbing that individual right into the trustee's avoidance right, and found the same need where the action is filed after the declaration. It held that 'an action' in Article 396(1) covers taking over an existing suit and changing it into an avoidance action, so the impropriety of the creditor's suit does not taint the claim exchanged after succession, and that exchange-type amendment ends the earlier claim's continuation. It then held that an avoidance action belongs to the exclusive jurisdiction of the bankruptcy continuing court under Article 396(3), as amended by Act No. 14472 of 27 December 2016, so the first-instance judgment had to be vacated and the case transferred there, while Supreme Court Decision 2017Da205073 leaves a case already at appellate stage with that court.

Non-party 1, the debtor, made the provisional registration of 25 February 2014 and the transfer registration of 30 June 2014, and was declared bankrupt on 6 July 2015 under number 2015Hadan68. The bankruptcy creditor, the National Agricultural Cooperative Federation, sued on 30 September 2015; its litigation successor, Non-party 1's bankruptcy trustee, applied on 19 May 2016 to succeed to the suit and to change the claim and its ground to the avoidance right, later correcting the prayer to performance of the avoidance registration procedure. The first-instance court granted the claims. The appellate court, the Gwangju District Court in its judgment of 1 September 2017 (2017Na52756), dismissed the avoidance claim exchanged after succession without a merits ruling, because the suit filed after the declaration was improper, overlooking the breach of exclusive jurisdiction. Deciding of its own motion before the grounds of appeal, the Supreme Court held unanimously and ordered: 'The appellate judgment is reversed, the first-instance judgment is vacated, and the case is transferred to the Gwangju District Court.'

First fix the dates: the registrations of 25 February 2014 and 30 June 2014, the declaration of 6 July 2015, the filing of 30 September 2015, and the trustee's application of 19 May 2016. Then ask who holds the right after the declaration, setting Article 406 of the Civil Act against Articles 391, 396(1), 406 and 347(1) of the Debtor Rehabilitation and Bankruptcy Act. Next check that the trustee applied to succeed and that the amended prayer fits Article 391, Item 1, and note that the exchange-type amendment extinguished the earlier claim's continuation rather than adding a second claim. Finally compare the court holding the file with the bankruptcy continuing court under Article 396(3), and note that a case already at appellate stage stays there under Supreme Court Decision 2017Da205073.

A record showing that the creditor's action was already pending at the declaration, or already at appellate stage when the trustee sought succession, would change the route under Articles 406 and 347(1) and under Supreme Court Decision 2017Da205073. A later amendment to Article 396(3) or to the term 'bankruptcy continuing court' brought in by Act No. 14472 of 27 December 2016 would require the jurisdiction check to be run again.

The Supreme Court held that 'acts of the debtor done with knowledge that they harm rehabilitation creditors or rehabilitation secured creditors' under Article 100(1)(1) of the Debtor Rehabilitation and Bankruptcy Act covers not only acts that shrink the general property but also preferences such as paying one creditor. It held that for a preference the debtor must be aware it is paying one creditor so as to evade the principle of creditor equality, but no active will to harm is needed. It further held that in exceptional cases where the act was socially necessary, proper or inevitable and rehabilitation creditors must accept the loss or inequality, it falls outside avoidance, judged on the debtor's property and business state, the purpose of the act, the source of the repayment funds, the relationship with the creditor, and any collusion or pressure, with the burden of proving that element missing on the recipient. Applying this, it found that a company that was no more than joint surety and contractor, facing excess liabilities, liquidity shortage and defaulting debts, with subcontractors' loans about to fall due, could not call a payment taking a large share of its available cash socially proper, and that awareness of paying one creditor could readily be inferred. On good faith it held that the recipient's bad faith is presumed, so the recipient must prove good faith, and that since the avoidance regime also targets preferences, no insolvency at the time is required, so awareness of insolvency cannot be the main ground for finding good faith.

The legal manager of the rehabilitation debtor STX Construction Co., Ltd. sued the Military Mutual Aid Association to avoid the repayments made on 24 December 2012 and 22 January 2013. The first-instance court accepted the defence that the payments were socially proper and that the recipient was in good faith, and the Seoul High Court, in its judgment of 23 September 2016 (2016Na2024756), affirmed it. The plaintiff appealed on four grounds, and the Supreme Court dismissed the first, which challenged the finding that the debtor had not fully abandoned the project by about the end of 2011, while finding grounds two, three and four well founded. Having so found, it ordered: 'The appellate judgment is reversed and the case is remanded to the Seoul High Court. The applications of the applicants for succession to the litigation procedure are all dismissed. The costs arising from the applications for succession to the litigation procedure shall be borne by the applicants.' The Justices were unanimous.

First separate the three questions: is the act a preference, was it socially proper, and did the recipient prove good faith. For propriety, weigh the debtor's cash-flow deficit, the maturity of the subcontractors' financing loans and the size of the payment against available cash, and note that the three extensions and the board-approved repayment plan in the third amendment agreement were held not enough to make the avoidance claim contrary to good faith or equity, so they cannot defeat avoidance on their own. For good faith, set the defendant's own records of the stalled project and its KRW 15 billion expected loss against its defence, and do not treat its awareness of insolvency as decisive. The point where the courts parted is here: the appellate court stayed with the first-instance findings on propriety and good faith, while the Supreme Court held those findings breached the rules on free evaluation of evidence and misstated the law on social propriety and the recipient's good faith.

A record showing that the collateral over the project site was on the point of immediate enforcement and that the payment averted a larger loss to the estate would reopen the propriety test. A later Supreme Court decision refining the propriety factors, or a change in Article 100(1) of the Debtor Rehabilitation and Bankruptcy Act, would require the analysis to be run again.

The Supreme Court began from the fact that the two Acts are not in a general and special relationship, so their exclusive-jurisdiction provisions must be read systematically against fairness, propriety and speed in civil litigation. It explained that the Civil Execution Act concentrates distribution-objection actions in the district court where the enforcing court sits to secure the interested parties' right to object and to minimise contradictory results over the disputed portion, as Article 156(2) confirms. It then read the bankruptcy court's concentration of avoidance cases, citing Supreme Court Decision 2017Da205073, as serving the speed and propriety of the bankruptcy proceedings, but held that this procedural benefit varies with the kind of suit. On these facts it found that the court must still examine the requirements for avoidance under Article 391, yet the action remains one aiming at amendment of the distribution table, which would have to be amended for non-objecting priority claimants or the bankruptcy estate under Article 161(2); concentration in the bankruptcy court would let another creditor's court be unaware of the trustee's action and produce conflicting judgments, and preferring that court would make exclusive jurisdiction appear or vanish mid-litigation as the trustee adds or withdraws the avoidance ground. It therefore held exclusive jurisdiction in the Seoul Northern District Court and found that the appellate ruling misapprehended Article 156 and Article 21 of the Civil Execution Act.

The person concerned received a bankruptcy declaration from the Seoul Bankruptcy Court in 2017Hadan1346, and the re-appellant, a lawyer, was appointed bankruptcy trustee. The trustee lodged an objection in the distribution proceeding of the voluntary auction pending in Seoul Northern District Court 2017Tagyeong3659 and filed this action there, seeking amendment of the distribution table on the ground that the defendants' mortgage-creation acts were avoidable. The first-instance court ordered the action transferred to the Seoul Bankruptcy Court; the re-appellant filed an immediate objection, arguing the action had been filed in the court of exclusive jurisdiction and that keeping it there would advance the bankruptcy proceedings. The Seoul Northern District Court, in its decision of 23 July 2019 (2018Ra1099), dismissed that objection. On the present special objection the Supreme Court ordered: 'The appellate decision is reversed and the first-instance decision is vacated.' The participating Justices were unanimous.

Start by confirming the two jurisdictional provisions the decision itself cites: Article 156(1) and Article 21 of the Civil Execution Act on one side, Article 396(1) and 396(3) of the Debtor Rehabilitation and Bankruptcy Act on the other, and note the Court's holding that neither Act is the special law of the other. Next set the trustee's pleaded grounds against the requirements for avoidance in Article 391, since the Court accepted those must still be examined wherever the action is heard. Then follow the Court's reasoning on consequences: whether other creditors have objected, whether Article 161(2) would require the table to be amended for the bankruptcy estate, and whether judgments given in two courts could be satisfied at once. The point where the lower courts and the Supreme Court part is the first-instance transfer order, upheld by the appellate decision; compare that with paragraph 3 of the reasons, which applies the jurisdictional rule to the Seoul Northern District Court.

A statutory amendment expressly allocating distribution-objection actions brought by bankruptcy trustees would displace the systematic reading adopted here. A later Supreme Court decision extending Supreme Court Decision 2017Da205073 on concentration of avoidance cases in the bankruptcy court would require this balance to be weighed again.

The Supreme Court began from the settled rule that a third party wishing to intervene under Article 71 of the Civil Procedure Act must have an interest in the outcome of the case, and that this interest exists even where the judgment's effect does not fall on the intervener directly, if the intervener's legal position is determined in a relationship that presupposes that judgment. It then set Article 406 of the Civil Act, which gives a creditor a revocation right, beside Articles 100 and 105 of the Debtor Rehabilitation and Bankruptcy Act, under which the trustee may exercise the avoidance right for the debtor's property once rehabilitation has begun. Since Articles 113 and 59(2) of that Act suspend proceedings already pending and allow the trustee or the opposing party to take them over, and since the trustee may take over the pending revocation action and change it into an avoidance action, the outcome directly affects the increase or decrease in the debtor's property and therefore the legal position of the rehabilitation claimant. Applying that to these facts, the Court held that the re-appellant, who is the former plaintiff and now a rehabilitation claimant, has an interest in the outcome absent special circumstances and may intervene to assist the trustee.

The claimant, a bank, sued the defendant as creditor of a non-party and won at first instance in Seoul Eastern District Court 2019Gadan147882, with the defendant appealing. While that appeal was pending, the non-party obtained the rehabilitation commencement decision of 20 October 2020 in Seoul Bankruptcy Court 2020Hoedan100138 and, being deemed trustee, took the action over and changed the claim into an avoidance action under Article 100(1)(i). The bank applied to intervene to assist the trustee, and the Seoul Eastern District Court dismissed that application in its decision of 7 September 2021 (2020Na28186), finding no interest in the outcome. The bank, as the re-appellant, argued that this misunderstood the requirements for intervention, and the Supreme Court, with Justice Noh Jeong-hui presiding and Justice Kim Jae-hyung as the reporting Justice, ordered: 'The appellate decision is reversed and the case is remanded to the Seoul Eastern District Court.' The decision records that the Justices reached that order by unanimous agreement.

Whether the pending case is still the creditor's own revocation action or has become the debtor's avoidance action, since that shift carries the whole analysis. Then trace the statutory chain in the order the Court used it, from Article 406 of the Civil Act to Articles 100 and 105, and from Articles 113 and 59(2) of the Debtor Rehabilitation and Bankruptcy Act to the takeover and conversion, checking each provision against the commencement decision and the pleading that changed the claim. Set the lower court's finding, that the claimant has no interest in the outcome, beside the Court's reasoning on whether the outcome changes the debtor's property and thereby the claimant's legal position, and determine which view Article 71 supports. Compare the precedents the Court relied on, Supreme Court Decision 2014Ma4009 and Supreme Court Decision 2016Da242440 on the scope of intervention interest, and Supreme Court Decision 2017Da265129 on taking over a pending action and converting it to an avoidance action.

The denial of the trustee's takeover, or the absence of any conversion of the action from revocation to avoidance, would remove the premise on which the Court found an interest in the outcome. A later amendment of Articles 100, 105 or 113 of the Debtor Rehabilitation and Bankruptcy Act, or a decision qualifying Supreme Court Decision 2017Da265129, would require the reading to be redone.

The Supreme Court held that the claim restored under Article 109(1) of the Debtor Rehabilitation and Bankruptcy Act is not confined to the claim directly targeted by the avoided act. Reading the words and purpose of the provision, and following Supreme Court Decision 2006Da28119, it found that other claims extinguished together with that claim, such as guarantee or insurance claims, may also revive. Following Supreme Court Decision 2003Da13512, it held that where notes are endorsed to pay an underlying debt, the two debts coexist and the underlying debt dies with the note debt when the notes are paid. On those rules it found that payment of the three notes before maturity killed both the note debt and the matching goods price debt, and that the plaintiff's return of KRW 3.8 billion under the finalised settlement revived the note claims and, with them, the goods price claims. It therefore held that the appellate court misread Article 109(1) and the law on extinction and revival of note and underlying debts when it refused the third head of the claim.

The plaintiff sued the defendant for KRW 6,377,789,245 and delay damages in three parts: KRW 3,303,291,540 on unpaid notes after set-off and the rehabilitation plan, KRW 578,737,082 on notes discounted at Woori Bank and later dishonoured, and KRW 2,495,760,623 recovered by avoidance. The appellate court, the Seoul High Court (Chuncheon) in its judgment of 19 February 2018 (2017Na891), allowed the first two parts with delay damages but dismissed the third. The defendant argued that the notes were given in lieu of payment, that the discharge under Dongyang's rehabilitation plan reached it under Article 250(2)(i) of the Debtor Rehabilitation and Bankruptcy Act and that the claim breached good faith, that the Woori Bank discount paid the price, and that the 18% delay damages rate was void under Articles 3 and 8 of the Regulation of Standardised Contracts Act; the appellate court rejected each point, and the Supreme Court found no error in those holdings. Both parties appealed. Because the plaintiff's appeal succeeded, the Supreme Court ordered: 'The part of the appellate judgment in which the plaintiff lost is reversed and that part of the case is remanded to the Seoul High Court. The defendant's appeal is dismissed.'

Split the file into three chains: the goods price debt, the note debt, and the effect of avoidance. For each note, fix who issued it, who endorsed it, when it fell due, when it was paid, and whether that payment was avoided. Test Article 109(1) in two steps: first whether the returned performance relates to the avoided act, then which claims died with the claim restored. Set the appellate court's four reasons against the Supreme Court's answers, and note that only the third head divided them. On remand the point to prepare is the apportionment of the returned KRW 3.8 billion over the ratio of the three promissory notes the defendant endorsed to the plaintiff.

A record showing that the plaintiff never made the return of KRW 3.8 billion on 27 February 2015, or a later ruling setting aside the avoidance-action settlement recommendation decision that became final in the Seoul Central District Court (2014Hoegi30), would remove the revival. An amendment to Article 109(1) of the Debtor Rehabilitation and Bankruptcy Act, or later case law on the reach of revival, would require the reading to be done again.

The Supreme Court held that an appellate court may judge the first-instance judgment only within the scope of the appellant's request for relief, and so may not change it to the detriment of the party that appealed absent special circumstances, citing Supreme Court Decision 83Daka1503 and Supreme Court Decision 2004Da8197. It measured detriment by the scope of res judicata and reasoned that a judgment accepting one party's simultaneous-performance defence grounded in a monetary claim leaves the other party unable to enforce without tendering, so converting that defence into deduction or set-off while shrinking the monetary claim harms the sole appellant. On the counter-performance it read Article 108(3)(ii) and (iv) of the Debtor Rehabilitation and Bankruptcy Act together with the rule that money obtained as unjust enrichment is presumed to remain even if consumed, citing Supreme Court Decision 87Daka768 and Supreme Court Decision 2007Da20440, and held that where the debtor's counter-performance is a monetary gain the resulting benefit is likewise presumed to exist absent special circumstances, so preference payments to some creditors would themselves be avoidable rather than show the benefit gone. It found no error in holding that the benefit from assuming and repaying the debtor's loan debt to IBK Savings Bank is not still existing, nor in the finding that return in kind was impossible or extremely difficult, so a duty of value compensation was owed, the business right being valued at KRW 4.2 billion while the appellate court ordered KRW 3,077,694,679 after deducting its figure for the common-benefit claim.

The debtor company transferred its business to the plaintiff on 29 May 2015 for KRW 3.5 billion, with the plaintiff also taking over the employees' retirement and wage claims, and KRW 1 billion of the price met by assuming the debtor's loan debt to IBK Savings Bank. The Chuncheon District Court opened rehabilitation on 6 October 2015 and, on the administrator's claim, issued the avoidance decision of 27 June 2016; the plaintiff then sued to set it aside primarily and, in the alternative, for return of the existing benefit as a common-benefit claim creditor. The first-instance court granted part of both claims; only the plaintiff appealed, and the Seoul High Court replaced return in kind with value compensation, valuing the business right at KRW 4.2 billion but ordering KRW 3,077,694,679 after deducting the recognised common-benefit claim of KRW 1,122,305,321, and dismissed the alternative claim for want of any remaining common-benefit claim. On the appeals of both sides the Supreme Court ordered: 'The parts of the appellate judgment concerning the plaintiff's losing portion on the primary claim and concerning the alternative claim are reversed and remanded to the Seoul High Court. The plaintiff's remaining appeal and the defendant's appeal are dismissed.' The four Justices were unanimous.

First fix who appealed and against which paragraph, because only that part of the first-instance judgment could be reopened. Next write out the first-instance operative words and the appellate ones side by side, and ask whether the appellant's position after appeal is worse, measured by what can later be enforced. On the money question, separate each element of the counter-performance, the KRW 2.5 billion cash and the IBK Savings Bank debt, and test each against the presumption that a monetary gain still benefits the debtor unless special circumstances displace it. Note the Court's remark that the debtor's value compensation claim and the counterparty's common-benefit claim are not automatically set against each other but are merely capable of set-off, and check how the appellate court framed that link.

A judgment of the Seoul High Court on remand that fixes the common-benefit claim above the appellate figure, or a record showing circumstances special enough to justify the change, would alter the reformatio in peius analysis. A statutory amendment to Article 108(3) of the Debtor Rehabilitation and Bankruptcy Act or later case law qualifying the money presumption would change the existing-benefit question.

The Supreme Court held that when a rehabilitation decision is made while a creditor's revocation action is pending, the proceedings are suspended and the manager may succeed to the action in place of the creditor, but if no rehabilitation plan is approved and the proceeding is discontinued before that succession, the earlier creditor resumes the proceedings automatically, following Supreme Court Decision 2015Da255821 on bankruptcy. It held that where the manager did succeed and changed the claim to an avoidance claim, then the proceeding was discontinued, the earlier creditor must succeed and must change the claim back to a revocation claim under Articles 113(2) and 59(4) of the Debtor Rehabilitation and Bankruptcy Act. It found that the avoidance right under Article 100 of that Act is a right peculiar to rehabilitation that only the manager may exercise while the proceeding runs, citing Supreme Court Decision 2014Da68761, so it cannot remain with the creditor after the proceeding ends. It added that the creditor's alternative change back to the revocation claim after remand is a necessary step under those provisions and does not breach Article 267(2) of the Civil Procedure Act, even though the manager had already changed the claim alternatively on appeal. Because a claim cannot be changed in the Supreme Court, citing Supreme Court Decision 94Nu7010, it held that, absent special circumstances, where the discontinuance comes before the period for filing the grounds of appeal expires, it must allow the succession and then reverse the appellate judgment and remand the case for the change of claim and the hearing on it.

Korea Credit Guarantee Fund, a creditor of the debtor, sued the beneficiary to revoke a fraudulent conveyance, and the first-instance court dismissed the claim. On the creditor's appeal the rehabilitation proceeding was opened against the debtor, the person deemed the legal manager under Article 74(4) of the Debtor Rehabilitation and Bankruptcy Act succeeded to the action and changed the claim to an avoidance claim, and the Gwangju District Court, by its judgment of 19 May 2022 (2021Na55332), ordered performance of the avoidance registration procedure for the real estate listed in its schedule because the sale contract of 30 May 2018 fell under Article 100(1)(i) of that Act. During the period for filing the grounds of appeal, the rehabilitation proceeding was discontinued under Article 286(1)(i) of that Act. Raising the point of its own motion and finding that the claim had to change back to a revocation claim, the Supreme Court ordered: 'The appellate judgment is reversed and the case is remanded to the Gwangju District Court.' It did not rule on the grounds of appeal, and the Justices were unanimous.

First trace who held the claim at each stage: the creditor, then the manager as successor, then the creditor again as successor of the manager. Then ask what each holder may plead: a revocation claim for the creditor, an avoidance claim under Article 100 of the Debtor Rehabilitation and Bankruptcy Act only for the manager, as Supreme Court Decision 2014Da68761 holds. Set the date the rehabilitation proceeding was discontinued against the date the period for filing the grounds of appeal expired, since the decision states its remand route only for discontinuance before that period runs out and says nothing about later discontinuance. Finally check whether the ex officio point raised here fits your file, since the court says it ruled before assessing the grounds of appeal.

A case showing that the manager never succeeded to the action would send the case down the automatic resumption route. A change of statute permitting the creditor to exercise the avoidance right after discontinuance would remove the need to replead at all.

The Supreme Court held that an act within Article 391(i) cannot be avoided against a beneficiary who did not know, at the time, that it would harm bankruptcy creditors, and that bad faith is presumed, so the beneficiary bears the burden of proving good faith, citing Supreme Court Decision 2011Da56637, 56644. Good faith is judged rationally from all the circumstances: the parties' relationship, the content, circumstances and motive of the disposition, whether the terms were normal and free of special grounds for suspicion, whether objective material supports an ordinary transaction, and what happened afterwards. Drawing on Supreme Court Decision 2007Da74621, the Court added that only good faith matters, not negligence in believing oneself to be in good faith, and that the same applies to intentional avoidance under Article 391(i). On these facts it found ample scope to find the defendant ignorant of the harm: an ordinary quick sale trades below market value, the price could fully discharge the secured obligations, nothing suggested other debt, and the discounted price alone could not stand in the way of good faith. It held that the appellate judgment rejecting the defence failed to carry out the necessary hearing and misapplied the rule on rebutting the presumption of bad faith.

The debtor filed for bankruptcy in the Incheon District Court under case 2019Hadan1001272 on 19 September 2019, obtained a bankruptcy declaration on 26 June 2020, and the plaintiff was appointed trustee, who then sued to avoid the sale. The appellate court, the Incheon District Court in its judgment of 19 April 2023 (2021Na79059), held the sale a target of avoidance, reasoned that the defendant's bad faith was presumed, and rejected the good-faith defence for want of evidence. The defendant appealed, and the participating Justices being unanimous, the Supreme Court ordered: 'The appellate judgment is reversed and the case is remanded to the Incheon District Court.'

First confirm that the act claimed falls within Article 391(i), since the buyer's good faith is reached only after that finding. Second, record where the burden sits: the beneficiary bears it, because bad faith is presumed, and only the fact of knowing matters, not fault in failing to inquire. Third, set each circumstance against the Court's list: how the parties met, how the price was negotiated, what the register showed and did not show, how the price compared with the secured debts, and what the buyer did after purchase. Fourth, compare the appellate court's reasoning that the defence failed for want of evidence with the Supreme Court's finding of scope for good faith; that is where the two courts parted, and on remand the same file is re-heard, so keep the written contract figure of KRW 110 million and the debtor's written undertaking visible.

Evidence that the defendant knew, before 26 February 2019, of a creditor beyond the mortgages and the jeonse right would reopen the weighing and could restore the appellate result. A later Supreme Court holding that a price materially below market value is itself a special circumstance giving grounds for suspicion would change the reading of the discounted price.

The Supreme Court read Article 406(1) of the Debtor Rehabilitation and Bankruptcy Act as suspending an action brought by a bankruptcy creditor under Article 406(1) of the Civil Act until takeover or the end of the proceedings, and Article 347(1), applied through Article 406(2), as letting the trustee take it over. Article 391 lets the trustee avoid an act falling within its items, and Article 396(1) lets the avoidance be exercised by action, claim or defence, so the taken-over action may be converted into an avoidance action. On the cap, the Court held that the avoidance right is exercised in office to restore property that left the debtor's hands, and its scope is in principle all the property serving as joint security. After the bankruptcy declaration the trustee must exercise it for equal payment to all creditors, while a bankruptcy creditor may not bring a revocation action premised on individual enforcement to preserve assets for one claim, following Supreme Court Decision 2017Da265129; the creditor's individual exercise is accordingly absorbed into the avoidance right exercised for all, in the form of an increase of the estate, following Supreme Court Decision 2015Da33656. The appellate limit of KRW 93,133,950 misapprehended the range of value-based restitution.

The Korea Credit Guarantee Fund sued the defendant on 13 August 2020 to revoke the sale of 2 May 2019, seeking value-based restitution limited to its own claim at KRW 93,842,965 with interest. Bankruptcy was declared over the non-party on 15 October 2021; the plaintiff, appointed trustee, applied around 15 November 2021 to take the action over, and on 28 February 2022 changed the claim to an avoidance under Article 391(i), raising it to KRW 182,287,930 with interest. The Uijeongbu District Court, in its judgment of 21 September 2023 (2023Na204256), held the sale fell under Article 391(i) and restitution should be by value, but fixed the auxiliary participant's claim at KRW 93,133,950 and awarded only that figure. Both sides appealed, the defendant arguing it bought without knowing of facts harmful to the bankruptcy creditors. The Supreme Court ordered: 'The part of the appellate judgment in which the plaintiff lost is reversed and this part of the case is remanded to the Uijeongbu District Court. The defendant's appeal is dismissed.' The participating Justices were unanimous.

First fix the sequence in the file: the subrogation payment, the creditor's action, the bankruptcy declaration, the takeover application and the amended statement, since the rule attaches only to an action still pending at the declaration. Then take Article 406(1) and (2) with Article 347(1) to confirm the proceeding was suspended, not extinguished, and conversion was open. Separate the two questions the appellate court merged: whether restitution may be by value, which both courts accepted, and how far that value reaches, where they parted. Set the joint security value against the size of the single creditor's claim, and note that the Supreme Court left the market value figure at KRW 182,287,930 unexamined on this appeal. Keep the good-faith defence apart, since the Court found no error in the appellate court's rejection of it.

A valuation record fixing the market value and the secured debts as at the date the avoidance declaration reached the defendant would settle the figure the remand must use, though this judgment itself fixes no such date. A later decision limiting the trustee's enlargement of the claim, or a statutory change to Article 391, would require this reading to be redone.

The Supreme Court held that in the buyer's bankruptcy the seller under a retention-of-title sale of movables holds a right of special priority, not a right of retrieval, because the reserved title has the substance of security. Article 411 of the Debtor Rehabilitation and Bankruptcy Act enumerates pledgees, mortgagees, security holders under the Act on the Security of Movables and Claims, and jeonse holders; a transferable security holder is not enumerated but is no different, and since the reserved title is treated as a rehabilitation security right in rehabilitation, the same follows organically into bankruptcy. Payment or performance in kind to a special-priority holder is therefore generally not avoidable so long as the secured claim and the value paid stay in balance. But the priority tracks the goods: where the seller confers a power of disposal and the buyer sells to a third party, the third party takes title and the reserved title is lost, so absent special circumstances the seller cannot assert ownership, security or other priority over the buyer's price claim against that third party. Applying this, the defendant had lost the reserved title and with it the standing to claim special priority over the onward-sold portions, the jointly named account gave it no position ahead of other creditors, and the assignment was a preference act evading the equal-treatment principle; bad faith being presumed, the appellate court was right to find the defendant's own evidence insufficient to prove good faith.

The debtor company applied for bankruptcy on 27 February 2019 and was adjudged bankrupt on 3 April 2019 by the Incheon District Court under 2019Hahap38; the plaintiff, as trustee in bankruptcy, then sued to avoid the assignment. The Seoul High Court, in its judgment of 20 October 2022 ((Incheon) 2021Na15534), rejected the defendant's claim to substitute retrieval under Article 410 and its claim of priority through the jointly named account, and held the assignment a preference act under Article 391(i). The defendant appealed, and the Supreme Court addressed the grounds of appeal, and the supplementary grounds filed after the time limit, within the scope of supplement. The four participating Justices agreed unanimously, and the Court ordered: 'The appeal is dismissed. Appeal costs shall be borne by the appellant.'

Classify the seller's position first, for the Court treats the reserved title as security, and record whether the goods, or price claims standing in their place, still existed in the estate at adjudication. Second, separate the three positions the defendant might assert — retrieval, substitute retrieval under Article 410, and special priority under Articles 411 and 412 — and note the order in which they fall away for the onward-sold portions. Third, test the assignment against Article 391(i): what the debtor company still owned, which bankruptcy creditors were prejudiced, and whether the balance between the secured claim and the value received held. Fourth, review the defendant's own evidence on good faith, since the beneficiary's bad faith is presumed and the burden lay on it under Article 288 of the Civil Procedure Act. The lower court and the Supreme Court did not part company, so the point of departure is the defendant's own grounds of appeal. Check the reasoning against Supreme Court Decision 2011Da56637, 56644 on preference acts and the burden of proving good faith, and against Supreme Court Decision 2013Da61190 on the reserved title as a rehabilitation security right.

A supply contract restricting the power of disposal, for example by requiring the seller's consent for each onward sale, would change the finding that the reserved title was lost on sale to third parties. Evidence that the defendant proved its own good faith at the time of the assignment would require the avoidance analysis to be done again.

The Supreme Court held under Articles 564(1)(i), 658 and 321 that 'explanation necessary for bankruptcy' covers only what is essential to moving the bankruptcy forward, judged on the circumstances visible on the record, and cited Supreme Court Decision 2023Ma6044 for the point that an incomplete answer to a non-essential request does not complete the offence. On these facts, because Non-party 1 ran the business in substance, its business income and closure assets were not essential to this bankruptcy; the debtor had filed income certificates and account statements and had repeatedly said nothing remained, which was not total non-cooperation; and the debtor's intellectual ability made fuller explanation hard to expect, which could be a 'justified reason' under Article 658. On discretionary discharge, the Court held that the trustee may, with the court's approval under Article 492(item 11), settle for a sum instead of selling or recovering estate property, but that route presupposes an estate or a plausible restoration, so a debtor whose property falls within the exempt assets in Article 383(1) and (2), or whose disposition may not be avoidable, must not be invited to contribute, and refusal to do so may not be counted against the debtor. Absent special circumstances such as the debtor having actually paid the premiums, the surrender proceeds of about KRW 32 million were Non-party 1's property, so the debtor's refusal to pay them could not weigh against the debtor.

The debtor, born in 1953, lost an apartment subscription penalty suit and bore KRW 126,712,100 plus interest, which had grown to KRW 524,873,614 including delay interest by the bankruptcy application; that was the only debt listed, and the creditor filed no objection. The trustee interviewed the debtor and Non-party 1, obtained third-party account records through a financial-information disclosure order, and opined that discharge would allow further abuse of the law. The first-instance court refused discharge. The appellate decision of the Uijeongbu District Court of 22 May 2024 (2024Ra60039) upheld that refusal, finding a breach of the duty to explain without just cause and no ground for discretionary discharge. On the debtor's re-appeal the Supreme Court ordered: 'The appellate decision is reversed and the case is remanded to the Uijeongbu District Court.' The four participating Justices were unanimous.

Work in this order. First, itemise every request the trustee made and mark which ones were essential to this bankruptcy, since the duty only attaches to those. Second, record what the debtor did file, and what remained unexplained, before characterising the conduct as dishonest rather than incomplete. Third, keep the insurance money out of the discharge analysis until you have established who paid the premiums and whether any avoidance ground under Article 391 exists. Only then run the Article 564(2) factors the Court listed: how the debt arose, the content and degree of any breach, the debtor's will to recover, the creditor's objection, and the social function of discharge. The point where the lower court and the Supreme Court parted is that the appellate court treated the trustee's demands and the failed contribution as settled breaches, while the Supreme Court held both could not carry that weight.

Evidence that the debtor actually paid the premiums would make the surrender proceeds arguably the debtor's and reopen the discretionary balance. A record showing an undisclosed asset of the debtor's own at the declaration of bankruptcy would likewise put the settlement demand back inside the estate.

The Supreme Court read the main clause of Article 422, item (2) as barring set-off where a bankruptcy creditor, knowing of a payment suspension or a bankruptcy filing, incurs a debt towards the debtor, and sub-paragraph (a) as restoring set-off where the burden rests on a statutory ground. Its stated reason is that a creditor who incurs a debt in the deteriorated period between suspension and the bankruptcy declaration and then sets off obtains satisfaction ahead of other creditors. Avoidance, by contrast, exists to preserve the estate and keep distributions among creditors even; where the trustee exercises it, the counterparty must return what was received or repay its value, and both sides are put back as they were. A creditor that set off the trustee's restitution claim would take priority over the other bankruptcy creditors, which is what the avoidance rules exist to prevent. And because the debtor's act had been avoided, the Court held that the resulting restitution obligation cannot count as a debt incurred for a statutory ground under sub-paragraph (a), citing Supreme Court Decision 2005Da56865 for the purpose of avoidance.

The plaintiff, a company holding a claim against the debtor company, owed a restitution obligation after the trustee exercised the avoidance right, and sued the trustee on the basis that set-off extinguished that obligation. The appellate court, the Seoul High Court in its judgment of 12 December 2024 (2024Na2034406), found that the plaintiff incurred the obligation while aware that an application for the commencement of rehabilitation proceedings had been made against the debtor company, and that no ground of exception in the proviso of Article 422, item (2) could be found, so it refused to accept the plaintiff's claim. On the plaintiff's appeal the Supreme Court judged the grounds of appeal, including those in papers filed after the deadline, only insofar as they supplemented what had been filed, found no error of law in the appellate court's reasoning, and ordered: 'The appeal is dismissed. The costs of the appeal shall be borne by the plaintiff.' The judgment was rendered by the unanimous opinion of the participating Justices.

Begin with who holds which claim, because Article 422, item (2) is written from the creditor's side: the trustee holds the Articles 397(1) and 399 return claim, and the plaintiff is the creditor that owes restitution and asks to set it off. Next find in the file what shows the plaintiff knew of the rehabilitation application, since the appellate court relied on that finding and the Supreme Court left it untouched. Then ask whether the obligation in issue was one the creditor took on itself or one that fell on it after avoidance, because the Court's answer to sub-paragraph (a) turns on that distinction. Finally set the appellate court's two grounds beside the Supreme Court's reasons: the Court held there was no misstatement of law, so the two judgments do not part company and no point of divergence needs locating. Use Supreme Court Decision 2005Da56865 only for what avoidance is for.

A record identifying which act was avoided, when the avoidance was exercised, and what the plaintiff knew on which dates would show whether the restitution obligation truly followed from avoidance rather than from the plaintiff's own undertaking. A later decision treating obligations arising from avoidance as statutory grounds in some circumstances would require this reading to be done again.

The Supreme Court held that a rehabilitation debtor who deceives the court about assets and income to obtain a favourable approval decision can commit fraud, because the approval alters rehabilitation creditors' rights, discharges or extends the debt and so stands in for the victim's act of disposal. Given the special nature of rehabilitation, a statement merely at odds with the facts is not enough: the assertion must be closely connected with the requirements for approval and must reach the point where whether approval is granted, and its terms, would change. Applying that test, the Court accepted that the omission was plain, but held that the prosecution's evidence could not establish closeness to approval, a change in outcome, fraudulent intent, loss or causation. It relied on the defendant's consistent account that he did not know a temporary allowance had to be reported, the absence of any false supporting document, the two payments received before approval of KRW 1,690,326 on 5 January 2018 and KRW 1,676,133 on 5 February 2018 set against the liquidation distribution of KRW 340,868,964, and the range within which a repayment rate is chosen, from the liquidation value floor to full investment of available income at a point creditors will accept. The Court added that allowance received after the approval decision of 22 February 2018 may be a circumstance after the offence, since working more after relief from financial distress is unremarkable.

The defendant, a veterinarian, filed for rehabilitation in the Seoul Bankruptcy Court on 27 September 2017 (2017Hoedan100136), obtained the commencement decision on 27 October 2017 and, no administrator having been appointed, was deemed administrator under Article 74(3) and (4) of the Debtor Rehabilitation and Bankruptcy Act. Between 5 January and 5 July 2018 he received allowances paid into Non-party 1's account on seven occasions totalling KRW 20,160,024, leaving them out of the revised plan summary and the monthly reports. He obtained approval on 22 February 2018 discharging KRW 735,318,066 of KRW 1,174,273,492 owed to 31 creditors, including KRW 64,500,000 of the KRW 100,000,000 owed to the injured creditor Non-party 2, and closure on 31 July 2018. The Daegu District Court, in its judgment of 25 July 2024 (2023No3708), found the fraud charge proved on the ground that the approval rested on the false income statement. The defendant appealed, and the Supreme Court, with the unanimous agreement of the participating Justices, ordered: 'The appellate judgment is reversed and the case is remanded to the Daegu District Court.'

Start with the legal test, since it governs everything else: identify the approval requirement the omitted item touches, then ask whether the omission could have changed whether approval was granted or the plan's terms. Next fix the timeline on the Court's own recital, setting the two payments it identified as received before 22 February 2018 apart from the later payments recorded at items 2 through 7 of the schedule, because the Court treated those later payments as potentially post-offence circumstances. Then add the concealed pre-approval sums to the liquidation distribution of KRW 340,868,964 and compare with the present-value repayment of KRW 404,709,937, as the Court did. After that check intent and proof: whether false supporting documents were filed, and what the defendant said about his understanding of what had to be reported. The lower court treated the false income statement as the basis of approval; the Supreme Court required proof that the omission was close enough to the approval requirements to alter the outcome.

An investigator's report or plan calculation showing that including the extra allowance would have lowered the repayment rate or breached the liquidation value guarantee would reopen the outcome-change point. A rule expressly defining what a monthly report must contain would also change how the asserted mistake of legal evaluation is weighed.

The Supreme Court held that where an insolvency proceeding opened in Korea has a foreign element, matters of that proceeding follow the lex concursus, the Debtor Rehabilitation and Bankruptcy Act, so the object, requirements, procedure and effects of a trustee's avoidance are judged by that Act unless special circumstances exist. It drew this from Articles 391, 396(1) and 397 of that Act, which let the trustee avoid certain acts for the estate and restore the estate to its former state, and referred to Supreme Court Decision 2012Da104526, 104533. It then held that Article 382(1) replaced the territoriality rule of Article 3 of the former Bankruptcy Act, so a debtor's overseas property in principle belongs to the estate, and Article 640 lets the trustee act abroad to the extent foreign law allows. It added that property whose seizure is barred by the Civil Execution Act or by special statutes such as the Public Officials Pension Act or the Military Pension Act is 'property that cannot be seized' under Article 383(1) and so stays outside the estate, while the mere fact that property is overseas, or that the law of its situs hinders compulsory execution, does not make it such property. On that basis it found no error in the appellate judgment on the scope of the estate or the governing law, and none in treating the transfer as a gratuitous act or an onerous act treated as equivalent to one under Article 391(4).

Seoul Metropolitan Government petitioned for the debtor's bankruptcy on 26 October 2020 (Seoul Rehabilitation Court 2020Hahap100477). The plaintiff, the debtor's chief executive, contracted on 29 November 2022 to take the shareholding; the next day the court declared bankruptcy and appointed the defendant trustee, who then sought avoidance, and on 5 September 2023 the court ordered the plaintiff to give notice to the Tianjin company. The appellate court, the Seoul High Court in its judgment of 23 January 2025 (2024Na2034017), held the shareholding part of the estate and subject to avoidance under Korean law, and held the transfer to be a gratuitous act or an onerous act treated as equivalent to one. The plaintiff's grounds of appeal attacked the scope of the estate, the governing law of the contract and the application of Article 391(4). Finding no error, the Supreme Court ordered unanimously: 'The appeal is dismissed. The costs of the appeal are borne by the plaintiff.'

Split this file into three questions. First, is the asset inside the estate under Article 382(1), and does any foreign element in the act change the avoidance rules, since the lex concursus governs them? Second, does any statute bar seizure of this asset, and is the resistance a genuine statutory bar rather than a practical execution obstacle abroad, which is the line the Court drew? Third, match the transfer to the head of avoidance relied on, here Article 391(4), and set the date of the act against the bankruptcy declaration. The Supreme Court and the High Court did not part on any of these points, so in your own file look for an exemption that is more than an execution obstacle.

Proof that the law of the country where the Tianjin company's shares sit bars alienation or seizure outright, rather than only hindering compulsory execution, would reopen the Article 383(1) analysis. A statute or later ruling defining what counts as unseizable foreign property would require the reading to be redone.