Luxury platform Balaan applied for corporate rehabilitation procedures at the Seoul Bankruptcy Court on the 31st. Balaan has been embroiled in controversy since the 24th due to delayed settlements.
Choi Hyung-rok, representative of Balaan, noted in a statement distributed that day, "We applied for corporate rehabilitation procedures at the Seoul Bankruptcy Court today (March 31) to ensure stable payment of our partners' trade debts and enhance the sustainability of the Balaan platform."
Choi said, "Balaan has made some progress in securing investments planned for the first quarter of this year, but unlike initially expected, the delay in securing additional funds has led to a short-term liquidity squeeze."
However, Choi emphasized that Balaan's rehabilitation process is fundamentally different from other cases.
Choi stated, "First of all, Balaan has not caused any financial harm to general consumers, and the scale of unpaid trade debts is also less than the monthly transaction volume of Balaan." He added, "Since March, we have structurally reduced expenses and secured a base for profitability."
Choi noted, "If the short-term liquidity problems are resolved through this rehabilitation process, we can quickly return to normal operations," adding that "the rehabilitation process is a recovery process to swiftly restore the rights and interests of our partners and establish a sustainable business foundation."
The Balaan side announced that in conjunction with the rehabilitation process, it plans to appoint a sales agent within the week to actively proceed with M&A (mergers and acquisitions).
Choi stated, "This decision aims to attract external acquirers before the approval of the rehabilitation plan to significantly improve future cash flow and rapidly enhance the stability and growth potential of the business," and added, "We will expedite attracting acquirers to quicken the inflow of funds, enabling us to timely settle our partners' trade debts."
Choi stated that the goals include attracting acquirers before the rehabilitation approval, fully settling unpaid debts, restoring stable settlement bases and transaction environments, and sustaining transactions and fostering growth with partners.
Choi noted, "Rehabilitation is not a process of abandoning creditors but a choice for everyone to survive together," adding that "the previously announced meeting schedule for sellers will be provided separately, and I will continue to share and communicate the situation."
Previously, on the 28th, Choi apologized for the delay in settlements and mentioned plans to meet with sellers starting this week. Balaan has been embroiled in controversy due to delayed payment settlements since the 24th. Recently, all product purchases and payments have been halted. Ultimately, the application for corporate rehabilitation procedures on the 31st raised concerns that it could lead to a situation similar to the second Timap (Timon and WeMakePrice) incident.
The Timap incident refers to a case last year when e-commerce platforms Timon and WeMakePrice faced financial deterioration and failed to pay 1.3 trillion won in sales proceeds, affecting 48,000 businesses. Balaan's average monthly transaction volume is approximately 30 billion won, with over 1,300 merchants.