Homeplus, which had been on the brink of bankruptcy, will resume its corporate rehabilitation process.
The Seoul Bankruptcy Court's Fourth Rehabilitation Division, presided over by Judge Jeong Jun-yeong with Judge Park So-yeong as the presiding senior judge, said Tuesday it had overturned its earlier decision to terminate Homeplus's rehabilitation proceedings and extended the period for approving a rehabilitation plan.
Earlier, the court terminated the proceedings on July 3, citing Homeplus's failure to secure the minimum 200 billion won ($135 million) in operating funds required to maintain the process.
Meritz Financial Group subsequently approved a debtor-in-possession (DIP) emergency operating loan, giving Homeplus a path to securing the necessary funds. The company filed an immediate appeal with the court Monday afternoon.
Under court procedure, once an immediate appeal is filed, the Seoul Bankruptcy Court may overturn its own termination decision and set a date for a creditors' meeting to deliberate and vote on the rehabilitation plan. The court determined that the grounds for the appeal were valid and chose to directly reverse its earlier decision rather than refer the case to a higher court.
"The termination decision was based on a lack of feasibility due to insufficient operating funds, but the operating funds have now been secured," the court said, adding that it found "legitimate grounds" for the immediate appeal.
With Tuesday's ruling, Homeplus's corporate rehabilitation process is back on track. The court said it would soon designate a date for a creditors' meeting to vote on the rehabilitation plan. Homeplus must obtain approval from its major creditors at that meeting and pass the plan by the final deadline of Sept. 4.
notstrong@heraldcorp.com
