Open Decision Ledger · Rehabilitation & bankruptcy
Requirements for avoidance of partial repayment of debts after an application for commencement of corporate reorganization proceedings, and whether the exercise of the administrator's right of avoidance violates the principle of good faith
Translated from the Korean original. Read the Korean
Supreme Court, Mar. 28, 1997, 96Da50445 (judgment)
Case name: 부인결정에대한이의
Official text on the National Law Information Center
Question
In order to avoid a company's repayment of a debt made after an application for commencement of corporate reorganization proceedings, must the company have acted knowing that it would prejudice reorganization creditors?
Holding
In the case of Article 78, paragraph (1), subparagraph 2 of the Corporate Reorganization Act, avoidance may be effected merely if the person who received the benefit knew, at the time of the act, that there had been a suspension of payments or the like, or knew of the fact of prejudice to reorganization creditors or others, and the company's intent to defraud is not required. Because the company that made the repayment and the administrator who exercises the right of avoidance are separate, the administrator's exercise of the right of avoidance does not violate the principle of good faith and does not constitute an abuse of rights.
Summary of the holding, verbatim
그로 인하여 이익을 받은 자가 그 행위 당시 지급의 정지 등이 있는 것 또는 정리채권자 등을 해하는 사실을 알고 있기만 하면 부인할 수 있다 할 것이고
Unofficial English translation
a person who received a benefit therefrom need only have known, at the time of the act, that a suspension of payments or the like existed or that it would be prejudicial to reorganization creditors and the like, in which case the act may be avoided, and
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
회사가 정리채권자 등을 해할 것을 알고 한 행위일 것을 요하는 것은 아니다.
Unofficial English translation
It is not required that the act be one performed by the company knowing that it would be prejudicial to reorganization creditors and the like.
Factors
- 회사가 지급의 정지 또는 파산, 화의개시 또는 정리절차개시의 신청이 있은 후에 채무의 소멸에 관한 행위를 한 경우
- 그 행위 당시 지급의 정지 등이 있는 것 또는 정리채권자 등을 해하는 사실을 알고 있기만 하면
- 양자는 별개의 존재이고
- 정리절차가 개시되기 전의 소외 회사의 채무변제행위를 응징하기 위한 관리인의 고유권한
Unofficial English translation
• Where the company performed an act concerning the extinguishment of an obligation after there was suspension of payments or a petition for bankruptcy, commencement of composition, or commencement of reorganization proceedings
• need only have known, at the time of the act, that a suspension of payments or the like existed or that it would be prejudicial to reorganization creditors and the like
• the two are separate and distinct, and
• the administrator's exclusive authority to sanction acts of debt repayment by the non-party company prior to the commencement of the reorganization procedure
Relation to precedent
Cannot be determined Not in the decision
Decisions referred to
None listed
Burden of proof
Not addressed Not in the decision
Open question and revisit condition
Can a repayment made during the period in which an immediate appeal against a ruling is pending after an application for commencement of corporate reorganization proceedings was dismissed also be avoided at all times under the same requirements, as an act following the application?
If the provisions on the requirements for avoidance under the current insolvency statutes corresponding to Article 78 of the Corporate Reorganization Act are amended, or if subsequent precedents on these requirements change the standard, this reading will be re-examined.
Cross-family AI independent reading & axis check
7 of 8 axes matched GPT-6 Astra (OpenAI, codex CLI) · 2026-10-16
As a result of comparing a primary reading with an independent reading by another AI model (GPT-6 Astra), which read only the original text without seeing the primary reading, 7 of the 8 axes matched, and the readings diverged on the eighth axis (Open question and revisit condition).
Axis 8 (Open question and revisit condition): Primary “Can a repayment made during the period in which an immediate appeal against a ruling is pending after an application for commencement of corporate reorganization proceedings was dismissed also be avoided at all times under the same requirements, as an act following the application?” vs Independent “Who bears the burden of proof that the recipient knew of the suspension of payments or of the fact of prejudice to reorganization creditors?”
The primary reading asks about the requirements for avoidance of a repayment made during the pendency of an immediate appeal against a ruling after dismissal of the application for commencement, while the independent reading asks who bears the burden of proof as to the recipient's awareness.
그로 인하여 이익을 받은 자가 그 행위 당시 지급의 정지 등이 있는 것 또는 정리채권자 등을 해하는 사실을 알고 있기만 하면 부인할 수 있다 할 것이고Raw responses and comparison record: Protocol · Blind readings (JSONL) · Axis comparison (JSONL) · SHA-256 (JSON)
Lower-court contrast & scope of application
Lower-court reading vs. Supreme Court holding
Lower-court context: The court below (Seoul High Court, 96Na27720), citing the first-instance judgment, found that △△△ Co., Ltd. received a suspension of bank transactions on January 10, 1994, filed an application for commencement of corporate reorganization proceedings, and, after that application was dismissed and an immediate appeal against a ruling was filed, made a voluntary repayment of 200 million won out of its loan debt of more than 1.6 billion won owed to the plaintiff on February 8, 1994, and that the plaintiff received the repayment knowing those circumstances. Accordingly, it upheld the first-instance decision, which had rejected the plaintiff's claim seeking the cancellation of the avoidance ruling (Seoul District Court, 95Pa3569) and the dismissal of the avoidance claim.
Supreme Court standard: The Supreme Court, taking the view that for avoidance under Article 78, paragraph (1), subparagraph 2 only the bad faith of the recipient is required and the company's intent to defraud is not necessary, recognized the plaintiff's receipt of the 200 million won as a subject of avoidance. Because the company that made the repayment and the administrator are separate and the right of avoidance is the administrator's own exclusive right, the Court also rejected the assertions of violation of the principle of good faith and abuse of rights, and dismissed the plaintiff's final appeal.
Distinguishing conditions
- Where the act extinguishing the obligation was performed before any suspension of payments or application for commencement of corporate reorganization proceedings and the intent to defraud under Article 78, paragraph (1), subparagraph 1 is therefore required
- Where the recipient, at the time of receiving the repayment, did not know of the suspension of payments or the like, or of the fact of prejudice to reorganization creditors
- Where what is at issue is not the extinguishment of an obligation but the provision of new security or the disposition of property, so that a different type of avoidance applies
Record verification notes
Before asserting the same conclusion, it is necessary to check whether the timing of the repayment falls after the suspension of payments or the application for commencement, and whether there are materials showing that the recipient knew of the filing of the application or the like at that point in time.
From the official text
Points at issue
[1] 회사정리법상의 부인권 행사의 요건 [2] 회사정리법상 관리인의 일부 채권자에 대한 부인권 행사가 신의칙에 반한다고 할 수 있는지 여부(소극)
Unofficial English translation
[1] Requirements for the exercise of the right of avoidance under the Corporate Reorganization Act [2] Whether the exercise of the right of avoidance by the administrator under the Corporate Reorganization Act against some creditors may be regarded as contrary to the principle of good faith (negative)
Summary of the holding
[1] 회사정리법 제78조 제1항 제2호에 의하여 회사가 지급의 정지 또는 파산, 화의개시 또는 정리절차개시의 신청이 있은 후에 채무의 소멸에 관한 행위를 한 경우에는 그로 인하여 이익을 받은 자가 그 행위 당시 지급의 정지 등이 있는 것 또는 정리채권자 등을 해하는 사실을 알고 있기만 하면 부인할 수 있다 할 것이고, 이러한 경우에 같은 법 제78조 제1항 제1호에 있어서와 같이 회사가 정리채권자 등을 해할 것을 알고 한 행위일 것을 요하는 것은 아니다. [2] 채무 일부를 변제한 것은 회사정리절차개시신청을 한 회사이고, 부인권을 행사하는 것은 정리회사의 관리인으로서 양자는 별개의 존재이고 부인권을 행사하는 것은 정리절차가 개시되기 전의 소외 회사의 채무변제행위를 응징하기 위한 관리인의 고유권한이므로 관리인이 부인권을 행사하는 것이 신의칙에 위반된다거나 권리남용에 해당된다고 할 수 없다.
Order
상고를 기각한다. 상고비용은 원고의 부담으로 한다.
Unofficial English translation
The appeal is dismissed. The costs of the final appeal shall be borne by the plaintiff.
Provisions referred to
[1] 회사정리법 제78조 제1항 제2호 [2] 민법 제2조, 회사정리법 제78조 제1항 제2호
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.
Every entry is published only after all quotes have been matched character by character against the official text, and audited by an independent second reading from a different model family across all eight axes. Both agreed axes and text-grounded interpretive divergences are recorded openly. The ledger is a research record, not an assessment of the court or advice on any matter.
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