Open Decision Ledger · Rehabilitation & bankruptcy
Reasonableness of the act as a requirement for exercising the right of avoidance under the former Corporate Reorganization Act, and its test
Translated from the Korean original. Read the Korean
Supreme Court, Sept. 21, 2007, 2005Da22398 (judgment)
No holding summary · checked against points at issue. The official text publishes no summary of the holding for this decision. The quotation and factors in this record are copied verbatim from the points at issue; the evidence for each axis is taken from the points at issue, the order and the reasons.
Case name: 정리담보권확정
Official text on the National Law Information Center
Question
Even if an act subject to avoidance under the former Corporate Reorganization Act is prejudicial to holders of reorganization claims, is it excluded from the scope of the right of avoidance if, at the time of the act, it was socially necessary and reasonable?
Holding
The reasonableness of the act is a requirement for exercising the right of avoidance. In exceptional cases where the act is recognized as having been socially necessary and reasonable, or unavoidable, it cannot become subject to avoidance under Article 78 of the Corporate Reorganization Act. Reasonableness is determined concretely, in light of the principle of good faith and the idea of fairness, based on such criteria as the property and business condition of the reorganization company, the subjective circumstances such as the purpose, intention and motive of the act, the source of the repayment funds, the relationship with the creditor, and whether the creditor exercised influence.
Points at issue, verbatim
행위의 상당성이 구 회사정리법상 부인권 행사의 요건인지 여부(적극)
Unofficial English translation
Whether the adequacy of an act is a requirement for exercising the right of avoidance under the former Corporate Reorganization Act (affirmative)
Disposition
Dismissed Stated in the decision
상고를 기각한다.
Unofficial English translation
The appeal is dismissed.
Form of the test
Circumstances weighed Stated in the decision
신의칙과 공평의 이념에 비추어 구체적으로 판단하여야 한다고 할 것이다
Unofficial English translation
should be determined concretely in light of the principle of good faith and the idea of equity
Factors
- 행위의 상당성
- 구 회사정리법상 부인권 행사의 요건
- 행위의 상당성 여부의 판단 기준
Unofficial English translation
• Adequacy of an act
• Requirements for exercising the right of avoidance under the former Corporate Reorganization Act
• Criteria for determining whether an act is adequate
Relation to precedent
Follows earlier decisions Stated in the decision
대법원 2002. 8. 23. 선고 2001다78898 판결
Unofficial English translation
Supreme Court Decision 2001Da78898 decided August 23, 2002
Decisions referred to
[1] 대법원 2002. 8. 23. 선고 2001다78898 판결(공2002하, 2199), 대법원 2004. 3. 26. 선고 2003다65049 판결(공2004상, 723)
Burden of proof
Not addressed Not in the decision
Open question and revisit condition
In the case of the provision of security rather than an act of repayment, what factors may take the place of the criteria used for acts of repayment, such as the source of the repayment funds, and to what extent must the possibility of normalization exist for reasonableness to be recognized?
If a Supreme Court decision establishing a different test for determining the reasonableness of the act in relation to the right of avoidance under Article 100 of the current Debtor Rehabilitation and Bankruptcy Act is rendered, 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
Compared with an independent reading by another AI (GPT-6 Astra), which read only the original text without seeing the first reading, 7 of the 8 axes agreed, and the readings diverged on the eighth axis (Open question and revisit condition).
Axis 8 (Open question and revisit condition): Primary “In the case of the provision of security rather than an act of repayment, what factors may take the place of the criteria used for acts of repayment, such as the source of the repayment funds, and to what extent must the possibility of normalization exist for reasonableness to be recognized?” vs Independent “How is reasonableness determined where the company had a possibility of normalization but the creditor compelled the provision of security?”
The first asks about the decision factors suited to the provision of security and the level at which the possibility of normalization is recognized, while the independent reading asks about the determination where both the possibility of normalization and the creditor's compulsion to provide security are present.
행위의 상당성이 구 회사정리법상 부인권 행사의 요건인지 여부(적극)Raw 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 (the Seoul High Court, 2004Na56914) held that the act of creating a security interest by way of transfer of title in this case was a reasonable act when viewed in light of the principle of good faith and the idea of fairness, and further held that it could not be regarded as an onerous act that could be treated as a gratuitous act, and therefore did not accept the defense of avoidance.
Supreme Court standard: In addition to the circumstances relied on by the court below, the Supreme Court cited the facts that the act of creating a security interest by way of transfer of title, unlike the later provision of other security, was carried out with the possibility of normalization of Ilrontech in mind and differs from the point of insolvency, that measures for normalization were presented and were actually implemented, and that this was the first security granted over inventory, and approved the finding of the court below. Since a declaration of bankruptcy had been made after the submission of the grounds for final appeal in the proceedings on final appeal, the Supreme Court dismissed the bankruptcy trustee's application to succeed to the litigation as unnecessary.
Distinguishing conditions
- Where it is revealed that the creditor colluded with the reorganization company, or exercised influence by compelling the reorganization company to make repayment or to provide security
- Where the security was provided close to the point of insolvency for a specific creditor alone, regardless of the possibility of normalization
- Where no measures for normalization were presented or implemented, and additional security was created over property already provided as security
Record verification notes
Before relying on the reasonableness of the act to prevent avoidance, check whether the reorganization company's property and business condition at the time of the act, the purpose and motive of the act, and the relationship with the creditor and whether the creditor exercised influence actually support the purpose of normalization on the record.
From the official text
Points at issue
행위의 상당성이 구 회사정리법상 부인권 행사의 요건인지 여부(적극) 및 행위의 상당성 여부의 판단 기준
Unofficial English translation
Whether the adequacy of an act is a requirement for exercising the right of avoidance under the former Corporate Reorganization Act (affirmative) and the criteria for determining whether an act is adequate
Summary of the holding
The official text publishes no summary of the holding for this decision. The quotation and factors in this record are copied verbatim from the points at issue; the evidence for each axis is taken from the points at issue, the order and the reasons.
Order
상고를 기각한다. 피고소송수계신청인의 소송수계신청을 기각한다. 상고비용 중 소송수계신청으로 인한 비용은 피고소송수계신청인이 부담하고, 나머지는 피고가 부담한다.
Unofficial English translation
The appeal is dismissed. The application for succession to litigation filed by the defendant-applicant for succession is dismissed. Of the costs of the final appeal, the costs arising from the application for succession to litigation shall be borne by the defendant-applicant for succession, and the remainder by the defendant.
Provisions referred to
구 회사정리법(2005. 3. 31. 법률 제7428호 채무자 회생 및 파산에 관한 법률 부칙 제2조로 폐지) 제78조(현행 채무자 회생 및 파산에 관한 법률 제100조 참조)
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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