Open Decision Ledger · Rehabilitation & bankruptcy
Effect of an avoidance lawsuit where a decision dismissing the reorganization proceeding becomes final while the lawsuit is pending
Translated from the Korean original. Read the Korean
Supreme Court, Oct. 13, 1995, 95Da30253 (judgment)
Case name: 담보권실행행위부인등
Official text on the National Law Information Center
Question
Where a lawsuit seeking avoidance under the Corporate Reorganization Act is pending and a decision dismissing the reorganization proceeding becomes final, may another person take over the lawsuit?
Holding
No. The right of avoidance is a right peculiar to the Corporate Reorganization Act that may be exercised only by the manager, on the premise that the reorganization proceeding is ongoing. Accordingly, if the reorganization proceeding terminates before the property is restored to the company, the claim for return or for reimbursement of value is also extinguished, and simultaneously with the loss of the manager's capacity, the rights relating to the lawsuit are absolutely extinguished, so that no one may succeed to them.
Summary of the holding, verbatim
부인의 소 또는 부인권의 행사에 기한 청구의 계속중에 정리절차폐지 결정이 확정된 경우에는 관리인의 자격이 소멸함과 동시에 당해 소송에 관계된 권리 또한 절대적으로 소멸하고 어느 누구도 이를 승계할 수 없다.
Unofficial English translation
Where a decision abolishing the reorganization procedure becomes final and conclusive while an action for avoidance or a claim based on the exercise of the right of avoidance is pending, the administrator's qualification is extinguished and, at the same time, the rights relating to the relevant lawsuit are also extinguished absolutely, and no one may succeed to them.
Disposition
Dismissed Stated in the decision
상고를 기각한다.
Unofficial English translation
The appeal is dismissed.
Form of the test
Elements stated Stated in the decision
정리절차의 진행을 전제로 관리인만이 행사할 수 있는 권리이므로
Unofficial English translation
Since it is a right that may be exercised only by the administrator on the premise that the reorganization procedure is in progress,
Factors
- 정리절차의 진행을 전제로 관리인만이 행사할 수 있는 권리
- 회사에게로 재산이 회복되기 이전에 정리절차가 종료한 때
- 관리인의 자격이 소멸함과 동시에 당해 소송에 관계된 권리 또한 절대적으로 소멸하고
- 어느 누구도 이를 승계할 수 없다
Unofficial English translation
• A right that may be exercised only by the administrator on the premise that the reorganization procedure is in progress
• Where the reorganization procedure has been terminated before the property is restored to the company
• The administrator's qualification is extinguished and, at the same time, the rights relating to the relevant lawsuit are also extinguished absolutely, and
• No one may succeed to them
Relation to precedent
Follows earlier decisions Stated in the decision
대법원 1995.5.26. 선고 94다13893 판결
Unofficial English translation
Supreme Court Decision 94Da13893 decided May 26, 1995
Decisions referred to
대법원 1995.5.26. 선고 94다13893 판결(공1995하,2248)
Burden of proof
Not addressed Not in the decision
Open question and revisit condition
Where property has already been restored to the company through the exercise of the right of avoidance before the reorganization proceeding is dismissed, is the effect of that restoration maintained even after the dismissal?
This reading will be re-examined if the Debtor Rehabilitation and Bankruptcy Act's provisions on the extinction of the right of avoidance and on the succession to lawsuits are amended, or if a subsequent decision takes a different view.
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Lower-court contrast & scope of application
Lower-court reading vs. Supreme Court holding
Lower-court context: The court below found that a decision dismissing the reorganization proceeding had become final while the avoidance lawsuit was pending, rejected the appellant's application to take over the lawsuit, and dismissed the appeal as procedurally improper on the ground that the appellant was not recognized as having party status. The identity of the appellant and the specific circumstances of the lawsuit are not confirmed in the reasons.
Supreme Court standard: The Supreme Court, in view of the legal principle that the finality of the decision dismissing the reorganization proceeding absolutely extinguishes the manager's capacity and the rights relating to the avoidance lawsuit, so that no one may succeed to them, held that the determination of the court below was correct and dismissed the final appeal.
Distinguishing conditions
- Cases where the reorganization proceeding is not dismissed but remains ongoing, so that the manager may exercise the right of avoidance
- Cases where the reorganization proceeding was terminated after property had already been restored to the company through the exercise of the right of avoidance
- Claims based not on the right of avoidance but on general rights such as the creditor's right of avoidance under the Civil Act
Record verification notes
Before contesting the succession to the lawsuit, one needs to check the time at which the decision dismissing the reorganization proceeding became final, whether the property subject to avoidance has been restored, and whether the claim is based on the right of avoidance.
From the official text
Points at issue
회사정리법상의 부인의 소 계속중에 정리절차폐지 결정이 확정된 경우, 그 부인의 소의 효력
Unofficial English translation
The effect of an action for avoidance under the Corporate Reorganization Act where a decision abolishing the reorganization procedure becomes final and conclusive while the action is pending
Summary of the holding
회사정리법상의 부인권은 정리절차개시 결정 이전에 부당하게 처분된 회사재산을 회복함으로써 회사사업을 유지·갱생시키고자 인정된 회사정리법상의 특유한 제도로서 정리절차의 진행을 전제로 관리인만이 행사할 수 있는 권리이므로, 정리절차의 종결에 의하여 소멸하고, 비록 정리절차 진행 중에 부인권이 행사되었다고 하더라도 이에 기하여 회사에게로 재산이 회복되기 이전에 정리절차가 종료한 때에는 부인권 행사의 효과로서 상대방에 대하여 재산의 반환을 구하거나 또는 그 가액의 상환을 구하는 권리 또한 소멸한다고 보아야 할 것이므로, 부인의 소 또는 부인권의 행사에 기한 청구의 계속중에 정리절차폐지 결정이 확정된 경우에는 관리인의 자격이 소멸함과 동시에 당해 소송에 관계된 권리 또한 절대적으로 소멸하고 어느 누구도 이를 승계할 수 없다.
Order
상고를 기각한다. 상고비용은 상고인의 부담으로 한다.
Unofficial English translation
The appeal is dismissed. The costs of the appeal shall be borne by the appellant.
Provisions referred to
회사정리법 제69조, 제78조, 제272조
Read 2026-10-16 · Cross-read 2026-10-16. All quotes matched against the official text. The Chinese-character placeholders the court used for anonymised parties are given in their Korean readings, and parenthetical Chinese-character glosses are omitted.
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