A Homeplus store in Seoul. [Herald DB]
A Homeplus store in Seoul. [Herald DB]

Homeplus's corporate rehabilitation proceedings have reached a crossroads, with the Seoul Bankruptcy Court set to decide Thursday whether to extend the process or terminate it altogether.

The court's Fourth Rehabilitation Division, presided over by Chief Judge Jeong Jun-yeong, is expected to rule on whether to grant an additional extension to the deadline for approving Homeplus's rehabilitation plan or to discontinue the proceedings.

The Seoul Bankruptcy Court had already extended the original March 4 deadline for approving the rehabilitation plan to May 4, then granted a further extension to July 3. Under South Korean law, the deadline for approving a rehabilitation plan is one year from the date proceedings begin, though it may be extended by up to six months when unavoidable circumstances exist.

The court had ordered Homeplus to secure a financing plan by June 30 after the retailer's prospects for raising the 200 billion won ($129 million) in outside funding needed to implement its existing rehabilitation plan remained unclear. The court also solicited opinions from key stakeholders — including creditors, shareholders and the labor union — on whether to terminate the proceedings.

Homeplus failed to present a financing plan by the deadline. It did, however, submit a revised rehabilitation plan reflecting the sale of Homeplus Express, the closure of 37 stores, and workforce reductions through natural attrition and voluntary redundancies.

Sources in the retail industry and legal circles had previously raised the possibility that the Seoul Bankruptcy Court would grant an additional one- to two-month extension to review the revised plan. Key stakeholders were also reported to have requested another extension rather than termination of the proceedings.

However, the court could still opt to terminate the proceedings if it determines that the revised rehabilitation plan is unlikely to be carried out, given that no financing arrangement has been secured.


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