It has been confirmed that Joo In-cheol, the legal manager of TMON and WeMakePrice (hereafter referred to as T-MEP), has placed a provisional seizure of approximately 1.796 billion won on the home of Koo Young-bae, the representative of Qoo10 Group, who is the key person responsible for the unresolved refund issues amounting to 1.8 trillion won. A provisional seizure of about 1.133 billion won has also been made on the home of Ryu Kwang-jin, the representative of TMON.
This appears to be a legal follow-up action regarding the preservation (freezing) of assets and claims for damages against three key executives (Koo Young-bae, Ryu Kwang-jin, and Ryu Hwa-hyun) responsible for the T-MEP crisis. It means that the claims for damages resulting from the Timap situation will not be transferred in the acquisition and sale of TMON, and 10% of the damage amount will be continuously collected from the key responsible executives.
According to the real estate registration documents for the homes of representatives Koo Young-bae and Ryu Kwang-jin on the 23rd, the manager has registered provisional seizures of approximately 1.796 billion won and 1.133 billion won at their respective homes. The sales prices of the two homes amount to 700 million won and 400 million won, respectively. It is reported that the manager is also checking whether there are additional assets, such as securities and bank accounts, that could be seized.
Regarding these measures, the manager noted in a conversation with ChosunBiz that they are “actions to repay the damage amounts through the assets of the key responsible individuals, separate from the purchase price for T-MEP.” He added, “Once the amounts are recovered, they will be used to repay the damage amounts.”
Earlier, in March, the manager estimated the loss caused by Koo and other executives, who are accused of embezzlement related to the settlement funds and breach of trust concerning QooExpress, to be about 180 billion won based on the contents of the indictment approved by the Seoul Rehabilitation Court.
Currently, TMON is undergoing procedures for a merger and acquisition (M&A) as Oasis, which operates fresh food delivery service Oasis Market, has been selected as the final acquirer of TMON. The legal representatives of T-MEP and Oasis plan to submit a rehabilitation plan to the Seoul Rehabilitation Court by the 15th of next month. For the rehabilitation plan to be passed, consent of more than three-quarters from the rehabilitation secured creditors' committee and two-thirds from the rehabilitation creditors' committee is required.
Industry insiders believe that obtaining “consent” is the key. The determined acquisition price is 11.6 billion won. The acquisition will be pursued through the issuance of new shares at 100%. Conditions also include guarantees for employee retention over five years. In particular, considering that Oasis plans to inject additional operating funds to repay unpaid wages and retirement benefits, which amount to 3 billion won and 3.5 billion won respectively, the actual acquisition cost is expected to be 18.1 billion won. Compared to the damage amount, this is considered insufficient.
If the rehabilitation plan resulting from the M&A is approved, the repayment rate for general rehabilitation creditors is expected to be about 0.8%. Considering that the liquidation dividend rate for general rehabilitation creditors set by the court-appointed investigator is 0.44% in the event of TMON‘s bankruptcy, this rate is about double, but with an M&A repayment rate of less than 1%, there are interpretations that the manager’s current provisional seizure actions serve as a stepping stone for persuasion to secure consent from the rehabilitation creditors’ committee.
An industry official said, “It is a strategy to persuade creditors disappointed by a lower than expected repayment rate” and added, “Plans to recover damage claims amounting to 10% of the damage amounts will determine the willingness to consent.” One creditor stated, “The fact that the result after almost a year of fighting is a repayment rate of less than 1% is disheartening,” but added, “Since the 180 billion won damage claim has not been transferred in the merger and sale, there is hope that as the acquisition process proceeds, we might recover some compensation for the damage instead of going bankrupt.”