This article was published on the ChosunBiz MoneyMove (MM) site at 4:17 p.m. on Sept. 24, 2025.
The private equity firm IMM Private Equity-IMM Investment alliance has launched a damages lawsuit against Taeyoung and Kolberg Kravis Roberts (KKR). It relates to leachate found at waste disposal company Ecorbit, which they acquired from these parties last year. The amount of the lawsuit is estimated at several hundred million won.
The IMM consortium initially planned to claim up to 200 billion won from a U.S. insurer but changed course and chose a damages suit. They judged that if Taeyoung and KKR deliberately concealed the leachate issue at Ecorbit, it would be difficult to receive insurance payments.
On the 24th, sources in the investment banking (IB) industry said the IMM consortium recently retained a major domestic law firm to file a damages suit against Taeyoung and KKR.
Last December the IMM consortium acquired control of Ecorbit for 2.07 trillion won. But less than two months later it was revealed that leachate levels at Ecorbit Green Cheongju, the company's business site in Cheongju, North Chungcheong Province, exceeded legal standards, and the IMM consortium immediately self-reported the issue to Cheongju city and received a one-month suspension of operations and fines of 500,000 won.
IMM says it suffered huge losses because it received a suspension of operations as soon as it acquired Ecorbit and had to spend hundreds of millions of won on extensive repairs. IMM's position is that KKR and Taeyoung knew about Ecorbit's leachate problem in advance but did not properly disclose it. They say the leachate issue had continued for years before the sale of management rights.
The IMM consortium is reported to have collected necessary evidence over eight months for this damages suit. It is said to be confident in proving the damages.
Initially IMM planned to claim up to 20 billion won from U.S. insurer Liberty Mutual and, if the insurer refused payment, to ask the court to freeze KKR's accounts. But they shifted direction to file a damages suit without claiming the insurance payment while placing only a provisional seizure.
The reason IMM chose a damages suit instead of claiming insurance is that under warranty and indemnity insurance (W&I insurance), insurers typically refuse payment if the seller deliberately concealed facts.
W&I insurance is a product in which the insurer covers the seller's liability for damages arising from breaches of representations and warranties in an M&A transaction. The scope covered by W&I insurance includes not only financial matters but also labor, tax and environmental representations and warranty clauses in the contract. However, most policies exclude payment for fraud or deliberate concealment that goes beyond an "known risk" or negligence.
Industry sources say that when deliberate concealment of a leachate problem is suspected, as in this case, it is common from the start to go straight to a damages suit.