Gangnam reconstruction union scraps bonus apartment after residents fight back

Union members pool funds to fight back; liquidator, auditor dismissed

High bonus disputes persist at major redevelopment sites

Supreme Court: Excessive bonuses can void general meeting resolutions

Raemian Blesstige in Gaepo-dong, Gangnam-gu, Seoul [The Herald Business DB]

A plan to award former executives of the Gaepo Jugong Complex 2 reconstruction union in Gangnam-gu, Seoul — now redeveloped as Raemian Blesstige — a Gangnam apartment worth up to 4 billion won ($2.98 million) as a performance bonus has been completely scrapped. After residents pushed back, the previous leadership was dismissed and a court suspended the general meeting resolution approving the payout. The newly installed leadership has now finalized the bonus at zero.

Industry sources said Wednesday that the Gaepo Jugong Complex 2 housing reconstruction association held a liquidation general meeting Saturday at the Gangnam-gu Community Center and passed a resolution setting the liquidator's bonus at zero. A total of 1,277 members participated in the vote — 1,100 by written ballot and 177 in person — with 1,114, or 87 percent, voting in favor. Eighteen voted against, and 145 ballots were invalid or abstentions.

The same meeting also approved a separate resolution scrapping the bonus payment resolution passed at the previous liquidation meeting on Sept. 29, 2025. The repeal measure passed with 1,126 in favor and four opposed.

The conflict first flared at the union's initial liquidation general meeting last year. At the time, the union proposed distributing about 145 billion won in profit generated from completing the reconstruction project among its members, while also awarding a single 84-square-meter apartment unit — whose general pre-sale contract had previously been canceled — as a bonus to the leadership, including former union head A.

The controversy over the multibillion-won bonus erupted after an apartment of the same size sold for 3.6 billion won around that time. At that meeting, the payout plan passed with 648 of 1,182 union members voting in favor.

But opposition from union members persisted. They argued it was excessive for the executives — who had already drawn salaries throughout the reconstruction project and the liquidation corporation's operation — to also receive an apartment worth billions of won as a separate bonus.

In response, some union members pooled money to retain a law firm and launched legal action disputing the validity of the general meeting resolution. In October 2025, they formed an emergency response committee to protect the union's existing assets and collected 651 signatures on a petition to dismiss the liquidator. A dismissal general meeting was ultimately held on Dec. 27, 2025, removing A and all remaining liquidators and auditors. The court then granted an injunction suspending the effect of the original general meeting resolution in February this year.

Results of Saturday's liquidation general meeting vote at the Gaepo Complex 2 reconstruction union. [Courtesy of a reader]

That same month, the court appointed B as the new liquidator. The new leadership conducted an external audit and held briefing sessions for union members before convening the latest liquidation general meeting. About a year after the original resolution to award an apartment worth billions of won as a bonus passed, the plan was scrapped and the new liquidator's bonus was set at zero.

Resident C said, "We already thought the bonus the previous leadership was set to receive was excessive, and there was strong backlash against also giving away an entire apartment as a bonus. Residents each contributed money to hire a lawyer and volunteered for related work."

New liquidator B said, "There was a perception that even if union members felt something was unfair, it was difficult to push back when they were at a disadvantage in organization or funding. It is encouraging that union members were able to show that pooling their strength can change the outcome."

Disputes over large bonuses have continued at redevelopment project sites. Courts have issued differing rulings case by case, weighing factors such as the bonus amount and the project's results.

At Acro River Park (formerly Sinbanpo Complex 1), union members filed a lawsuit disputing the validity of a general meeting resolution after it emerged that about 13 billion won in bonuses would go to 10 executives, including the union head. The Supreme Court ruled that a general meeting resolution could be nullified if the bonus amount was excessive and there were grounds to view it as inequitable. The ruling reflected the view that, given the public nature of reconstruction projects, bonus payments cannot be left solely to the decision-making of a private organization.

By contrast, in a separate lawsuit over a 1 billion won bonus set for the union head at Raemian One Bailey (formerly Sinbanpo Complex 3 and Gyeongnam Apartment), the court reached a different conclusion. Considering the additional profit the union gained through the project, it ruled that 1 billion won was not an excessive bonus.

Experts say that paying bonuses to union executives is not prohibited in itself, but that the core issues in these disputes are whether the amount is excessive relative to the project's results and whether the payment's rationale and voting procedures were appropriate.

Kim Je-kyung, director of Tumi Real Estate Consulting, said, "Given that the complex was completed a considerable time ago, the union head likely received no small salary before this liquidation meeting. It is unusual that this outcome emerged in a situation where interest among union members has waned long after completion, making it difficult even to meet the quorum for a vote." He added that the case raises questions about how to distribute profits at the final stage of a redevelopment project.

quq@heraldcorp.com