This article was displayed on the ChosunBiz MoneyMove (MM) site at 2:57 p.m. on Dec. 14, 2025.
With a pre-rehabilitation merger and acquisition (M&A) for Homeplus Co. failing to bear fruit, concerns are growing that, at this rate, liquidation could become a reality. If an M&A is not completed before the approval of the rehabilitation plan, the court will have to consider drastic options such as liquidation and closure. If that happens, there is a high chance that employees of Homeplus Co. and its partner firms will be out on the street.
Amid this, attention is turning to Meritz Financial Group, Homeplus Co.'s main creditor. Although Meritz lent 1.2 trillion won to Homeplus Co., it has stepped back to watch during the rehabilitation process. Experts say Meritz is holding back because, even in the worst case in which Homeplus Co. goes bankrupt, it can still recover the principal. They note that, as in many domestic and overseas precedents, it could design a rehabilitation structure together with debtor MBK Partners but is not doing so, and some say Meritz Financial Group should also take a more leading role.
◇ Main creditor that lent 1.2 trillion... 250 billion already recovered
According to the investment banking (IB) industry, Homeplus Co. extended the deadline to submit its rehabilitation plan to the 29th. This is the fifth extension. However, as it is realistically difficult to find a bidder by the 29th, there is a very high possibility that the deadline will be extended once again.
In political circles, there was talk that NH NongHyup should step in to acquire the company, but the opposition within NongHyup is so strong that the chances of it happening are said to be low. More recently, there has been talk that restructuring specialist UAMCO could step in, but critics say that if UAMCO takes it on without a personnel restructuring, it will simply deepen the losses.
In the market, there is cautious speculation that if the current situation continues, "liquidation" will be the only option. Generally, if a rehabilitation plan is not submitted within the set period or is voted down at a meeting of interested parties, the court decides to terminate the rehabilitation proceedings before approval. If rehabilitation is terminated and the case moves to bankruptcy, the court appoints a bankruptcy trustee, who then distributes the company's assets to the creditors.
In this process, Meritz's power is absolute. For a rehabilitation plan to be approved at a meeting of interested parties, it needs the consent of at least three-fourths of secured rehabilitation creditors and two-thirds of rehabilitation creditors. In other words, in principle, if Meritz opposes, Homeplus Co.'s rehabilitation cannot succeed.
That is because Meritz is Homeplus Co.'s largest creditor. In May last year, Meritz Securities, Meritz Fire & Marine, and Meritz Capital signed a 1.2166 trillion won refinancing contract with Homeplus Co. In the process, they secured 62 stores as trust collateral, giving Meritz the right to dispose of those stores.
Because trust property is not owned by the consigning company, even during rehabilitation proceedings, when Homeplus Co.'s financial debt is frozen, Meritz, as the collateral trust right holder, can in principle exercise its security if an event of default (EOD) occurs. Of Homeplus Co.'s total collateralized claims (including CP) of 2.1 trillion won, about 60% belongs to Meritz.
After the Homeplus Co. crisis broke out, Meritz for a time raised its voice, saying "MBK Partners, the largest shareholder, must make self-rescue efforts that cut to the bone," but since the matter escalated into a political and social issue, it has held back its words. Despite being one of the most important stakeholders, it has taken a step back to watch.
◇ Meritz: "Nothing we can practically do"
Experts say that given the seriousness of the Homeplus Co. crisis, Meritz should play a more proactive role than it is now. As the representative creditor, there are many areas where it could intervene, such as lowering interest rates or extending maturities, and further, converting debt to equity and participating in designing a pre-approval M&A structure.
In Korea, aside from the state-run Korea Development Bank, there are almost no creditors who actively participate in rehabilitation work, but overseas it is different. In the case of U.S. department store chain J.C. Penney, it filed for bankruptcy protection in 2020, and banks and funds in the secured creditor group joined hands with Simon Property and Brookfield to directly design a restructuring plan. They pursued a "two-track" strategy that transferred store operating assets to the Simon–Brookfield consortium and vested store real estate in the creditors' real estate company. Thanks to that, J.C. Penney avoided liquidation and was able to keep many stores, and the creditors' recovery rate was higher than in liquidation.
Neiman Marcus also entered bankruptcy protection during the COVID-19 pandemic in 2020, with major creditors acting as sponsors. The creditor group drew up a pre-pack plan before entering bankruptcy court and agreed to a financial restructuring that wrote off more than $4 billion of $5.5 billion in liabilities and reduced annual interest expenses by about $200 million. The creditor group provided more than $600 million in DIP financing and converted existing claims into equity, becoming Neiman Marcus' largest shareholder.
The IB industry and legal circles assess that there are complex reasons why Meritz, the main creditor of Homeplus Co., is not playing an active role and continues to watch the situation.
The biggest reason is that even in the worst-case scenario in which Homeplus Co. goes bankrupt, there is no problem recovering the principal. Homeplus Co.'s collateral appraisal value has been calculated at 2.8174 trillion won, and Meritz has already recovered 256.1 billion won of principal and interest.
Normally, in rehabilitation proceedings, the enforcement of security is restricted under Article 58 of the Debtor Rehabilitation and Bankruptcy Act. However, because trust collateral is separated under the trustee's name and can be excluded from adjustment in rehabilitation proceedings, the dominant interpretation is that, if a contractual default occurs, there is significant room to recover collateral through disposal by the trustee.
An IB industry official said, "Meritz holds the position of a 'high-yield lender with solid collateral' in the Homeplus Co. rehabilitation," adding, "Because it is not a creditor that can reduce losses only by saving the company itself, it can take a passive stance and wait for Homeplus Co.'s 'self-rescue plan,'" and, "That is why the rehabilitation process is all the more frustrating."
A person familiar with Meritz's situation said, "If Meritz were to step up aggressively, it would ultimately mean accepting a certain level of loss, which could raise the possibility of a breach of duty to shareholders," adding, "Meritz's position is that there is nothing it can practically do."
There is also analysis that another reason Meritz cannot play an active role such as a debt-for-equity swap is the deterioration of the hypermarket business.
A rehabilitation lawyer said, "Unless it is a sector with high growth potential, Homeplus Co. is a big-box retailer where, even if debt is converted to equity and it becomes the largest shareholder, there is not much chance of a business turnaround," adding, "From the creditor's perspective, even if claims are converted to stock, there is no guarantee that the stock will hold its value."
There are also calls that efforts by MBK Partners should be a prerequisite. Another rehabilitation specialist lawyer said, "Unless the largest shareholder accepts sacrifices, such as injecting a substantial amount of additional capital, it will be difficult for creditors to step up and say they will actively save the company in the current situation," adding, "Another big problem is that the emotional rift between the two sides is too deep."