Open Decision Ledger · Rehabilitation & bankruptcy
Meaning of Suspension of Payment and Whether Acts of a Third Party May Be Avoided in a Case Involving a Declaration of Bankruptcy Following Rescission of a Composition
Translated from the Korean original. Read the Korean
Supreme Court, Apr. 28, 2022, 2020Da221631 (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: 부인의소
Official text on the National Law Information Center
Question
Where a composition has been rescinded after an order approving the composition became final and a declaration of bankruptcy is issued, how should the suspension of payment under Article 391, subparagraph 2 of the Debtor Rehabilitation and Bankruptcy Act be construed, and may acts of a third party who is not the debtor also be subject to avoidance?
Holding
The Supreme Court confined the suspension of payment in this case to a state of suspension of payment directly connected to the declaration of bankruptcy or the bankruptcy proceedings, or to a state of crisis comparable thereto, and found that such a state existed around December 2007, when the bankrupt company closed down its business. It further held that, where special circumstances such as collusion with the debtor permit the third party's act to be identified with the act of the debtor, that act is subject to avoidance, and it accordingly dismissed the final appeal.
Points at issue, verbatim
파산선고나 파산절차와 직결되는 지급정지상태 또는 그에 준하는 위기상태로 한정하여 해석하여야 하는지 여부(적극)
Unofficial English translation
must be interpreted as limited to a state of suspension of payments directly connected with the declaration of bankruptcy or the bankruptcy proceedings, or a state of crisis comparable thereto (affirmative)
Disposition
Dismissed Stated in the decision
상고를 기각한다.
Unofficial English translation
The appeal is dismissed.
Form of the test
Existing test applied Stated in the decision
원심이 파산회사가 아닌 피고와 제3자 사이에 체결된 이 사건 각 전세권양도계약을 부인의 대상으로 인정한 것은 위 법리에 따른 것으로 정당하고
Unofficial English translation
the court below's finding that the contracts for the transfer of jeonse rights in this case, which were concluded between the defendant, which is not a company in bankruptcy, and a third party, were subject to avoidance was proper as being in accordance with the foregoing legal principle, and
Factors
- 구 화의법에 따른 화의절차에 따라 화의인가결정이 확정된 후 화의가 취소되고 파산선고가 내려진 경우
- 파산선고나 파산절차와 직결되는 지급정지상태 또는 그에 준하는 위기상태
- 채권자 또는 제3자의 행위가 채무자 회생 및 파산에 관한 법률에서 정한 부인의 대상이 될 수 있는지 여부(한정 적극)
Unofficial English translation
• where composition approval order has become final and conclusive under composition proceedings under the former Composition Act and the composition is thereafter revoked and a declaration of bankruptcy is rendered
• a state of suspension of payments directly connected with the declaration of bankruptcy or the bankruptcy proceedings, or a state of crisis comparable thereto
• Whether an act of a creditor or a third party may be subject to avoidance as provided in the Debtor Rehabilitation and Bankruptcy Act (limited affirmative)
Relation to precedent
Follows earlier decisions Stated in the decision
대법원 2007. 8. 24. 선고 2006다80636 판결(공2007하, 1468)
Unofficial English translation
Supreme Court Decision 2006Da80636 decided August 24, 2007 (Gong 2007 Ha, 1468)
Decisions referred to
[1] 대법원 2007. 8. 24. 선고 2006다80636 판결(공2007하, 1468) / [2] 대법원 2011. 10. 13. 선고 2011다56637, 56644 판결(공2011하, 2351)
Burden of proof
Not addressed Not in the decision
Open question and revisit condition
Can a state of crisis directly connected to the bankruptcy proceedings be found on the sole basis that payment under the composition terms was partially delayed to some extent, without the business having been closed down?
If a new Supreme Court decision is rendered concerning the point in time of suspension of payment in cases involving bankruptcy following rescission of a composition, or concerning the requirements for avoidance of a third party's act, this reading will be re-examined.
Cross-family AI independent reading & axis check
6 of 8 axes matched GPT-6 Astra (OpenAI, codex CLI) · 2026-10-16
When compared with an independent reading by another family of AI (GPT-6 Astra), which read only the original text without seeing the primary reading, 6 of the 8 axes matched, and the readings diverged on axis 4 (Form of the test) and axis 8 (Open question and revisit condition).
Axis 4 (Form of the test): Primary “Existing test applied” vs Independent “Elements stated”
Since the original text sets out the scope of the suspension of payment and of acts subject to avoidance on the premise that a particular procedural course has taken place, the primary reading may be seen as placing weight on the specific application under that premise, and the independent reading on the general requirements for establishment.
‘지급정지’는 파산선고나 파산절차와 직결되는 지급정지상태 또는 그에 준하는 위기상태로 한정하여 해석하여야 하는지 여부(적극)Axis 8 (Open question and revisit condition): Primary “Can a state of crisis directly connected to the bankruptcy proceedings be found on the sole basis that payment under the composition terms was partially delayed to some extent, without the business having been closed down?” vs Independent “What circumstances, other than collusion with the debtor, would permit a third party's act to be identified with the act of the debtor?”
The primary reading asks whether a partial delay in payment constitutes a state of crisis, while the independent reading asks what circumstances, other than collusion, would permit the third party's act to be identified with the act of the debtor.
파산선고나 파산절차와 직결되는 지급정지상태 또는 그에 준하는 위기상태로 한정하여 해석하여야 하는지 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 regarded the bankrupt company's application for commencement of composition proceedings dated December 11, 1997 as an immediate suspension of payment, and thus found that the state of suspension of payment existed at the time each of the contracts assigning a right of lease on deposit basis in this case was concluded; it recognized the contracts for assignment of a right of lease on deposit basis concluded between the defendant, who was not the bankrupt company, and a third party as subject to avoidance.
Supreme Court standard: The Supreme Court pointed out that it was erroneous to regard the application for commencement of composition proceedings as an immediate suspension of payment, yet found the conclusion proper on the ground that the bankrupt company, before the contracts were concluded, had closed down its business around December 2007 due to poor business performance and was therefore in a state of crisis no later than that time. It dismissed the final appeal, holding that the part treating the third party's act as subject to avoidance was proper as it followed the established legal principle.
Distinguishing conditions
- Where a declaration of bankruptcy was issued immediately without composition proceedings, so that the premise of bankruptcy following rescission of a composition is absent
- Where, at the time of the act in question, the debtor continued to make payment under the composition terms, so that there is no circumstance warranting a finding of a state of crisis directly connected to the bankruptcy proceedings
- Where no special circumstances are revealed, such as collusion with the debtor, that would permit the third party's act to be identified with the act of the debtor
Record verification notes
Before asserting the same conclusion, one must first examine whether, at the time of the act, the debtor was, independently of the application for commencement of composition proceedings, in a state of crisis directly connected to the bankruptcy proceedings, such as closure of business, and whether circumstances such as collusion that would permit the third party's act to be identified with the act of the debtor are confirmed in the record.
From the official text
Points at issue
[1] 구 화의법에 따른 화의절차에 따라 화의인가결정이 확정된 후 화의가 취소되고 파산선고가 내려진 경우, 채무자 회생 및 파산에 관한 법률 제391조 제2호에서 정한 ‘지급정지’는 파산선고나 파산절차와 직결되는 지급정지상태 또는 그에 준하는 위기상태로 한정하여 해석하여야 하는지 여부(적극) [2] 채권자 또는 제3자의 행위가 채무자 회생 및 파산에 관한 법률에서 정한 부인의 대상이 될 수 있는지 여부(한정 적극)
Unofficial English translation
[1] Whether, where composition approval order has become final and conclusive under composition proceedings under the former Composition Act and the composition is thereafter revoked and a declaration of bankruptcy is rendered, the 'suspension of payments' provided in subparagraph 2 of Article 391 of the Debtor Rehabilitation and Bankruptcy Act must be interpreted as limited to a state of suspension of payments directly connected with the declaration of bankruptcy or the bankruptcy proceedings, or a state of crisis comparable thereto (affirmative) [2] Whether an act of a creditor or a third party may be subject to avoidance as provided in the Debtor Rehabilitation and Bankruptcy Act (limited affirmative)
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. 상고비용은 피고가 부담한다.
Unofficial English translation
The appeal is dismissed. The costs of the appeal shall be borne by the defendant.
Provisions referred to
[1] 구 화의법(2005. 3. 31. 법률 제7428호 채무자 회생 및 파산에 관한 법률 부칙 제2조로 폐지) 제9조 제1항(현행 삭제), 채무자 회생 및 파산에 관한 법률 제391조 제2호 [2] 채무자 회생 및 파산에 관한 법률 제391조
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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