Homeplus Co.'s fate will be decided this week. A meeting of interested parties to vote on whether to approve the amended rehabilitation plan submitted by Homeplus Co. will be held on the 2nd, and the court's final approval deadline is on the 4th.
What is drawing attention is the burden-sharing by public-interest creditors, who will not actually take part in the vote. Their consent to the partitioning, installment, and deferral of repayment is a key pillar for executing the plan, and if not secured, it could hamper the process even after approval. As of the 27th of last month, 9,571 individual and institutional public-interest creditors had agreed to installment repayment, bringing the consent rate to 58.1% (62.4% for product supply, 87.2% for executives and employees). Regarding the court's assessment of the feasibility of carrying out the plan, Homeplus Co. said it "needs more consents."
◇ Public-interest claims eligible for priority repayment, biggest swing factor for rehabilitation
According to related industries on the 1st, the meeting of interested parties will be held at 3 p.m. on the 2nd in Courtroom No. 1 of the Seoul Bankruptcy Court. The company expects the first hurdle—a vote by rehabilitation creditors—to pass without difficulty. Votes on the plan are cast by creditor groups divided by whether they have collateral, and for unsecured rehabilitation creditors, at least two-thirds (about 66%) by claim amount must consent for passage. Meritz Financial Group, which holds about 42% by amount, is understood to have effectively consented in the process of injecting 200 billion won in debtor-in-possession (DIP) emergency operating funds into Homeplus Co.
The crux of the amended plan is repaying claims through sequential asset sales. Homeplus Co. plans to sell 19 owned stores out of the 37 that closed in July by Feb. 2028 to fully repay Meritz's trust collateral claims, then repledge 38 owned stores, on which the liens will be released, as collateral to raise an additional 600 billion won in loans by 2030 to fund repayment of public-interest claims. The appraised value of the 38 stores is about 2.8 trillion won.
On the operations side, it presented a goal of achieving 4.3 trillion won in sales and 162.8 billion won in operating profit in 2030. Public-interest claims would be repaid 100% within three years, while general rehabilitation claims would be repaid over six to 10 years. The sale (M&A) of the remaining business unit also remains a task after approval.
The two types of claims are fundamentally different. Rehabilitation claims arise from causes before the commencement of rehabilitation proceedings, and under the plan some may be reduced or repayment may be deferred for a long period. By contrast, public-interest claims are costs necessary to carry out the proceedings. These include transaction payments or employee wages and severance that arise after commencement. As a rule, they are not bound by the plan and are to be paid in full with priority from time to time.
Homeplus Co.'s unpaid supplier bills are public-interest claims because they are payments for transactions that continued even after proceedings commenced. In principle, the money should have been paid as it came due, but due to a cash crunch it piled up to 503.2 billion won. Including wages and severance, total public-interest claims amount to 930 billion won. Homeplus Co. seeking consent for three-year installment repayment is effectively a request to forgo their priority status. Public-interest creditors cannot cast votes at the meeting of interested parties, but the court required Homeplus Co. to obtain and submit their consent to installment repayment.
An industry official said, "Rehabilitation creditors cannot pursue compulsory execution, but public-interest claims are not subject to such restrictions," and noted, "If consent is not obtained, even if approval is granted, compulsory execution would be possible, which could pose a major problem for carrying out the plan." In other words, approval alone will not normalize the situation; the understanding of public-interest creditors is a precondition. Unlike rehabilitation claims (66%), there is no threshold for public-interest claims. It is hard to predict what level of consent the court will deem sufficient to find the plan executable. The prevailing view is that the court will have no choice but to consider the consent rate and opinions of public-interest creditors alongside the consent rate of rehabilitation creditors.
◇ "The damage will be greater if it goes bankrupt," last-ditch persuasion
It is reportedly not easy to lift the consent rate further. As Homeplus Co. has restructured operations around food, a current of opposition is evident among nonfood partners whose supply has not resumed. Food suppliers with ongoing transactions are consenting even if receivables remain, while electronics, apparel, toy, and household-goods companies have no incentive to agree because their public-interest claim status does not change whether it is rehabilitation or bankruptcy.
The Council of Public-Interest Creditors for Commercial Transactions submitted a second opinion to the court on the 24th of last month saying it was difficult to accept the plan to repay merchandise payments. Of the 503.2 billion won, only about 2.5 billion won, or 0.5%, would be repaid by 2028, whereas 63.3 billion won in wages and severance would be fully repaid by Feb. 2028 and most of the 1.3 trillion won in senior trust collateral claims would be repaid around the same time, which it argued was inequitable.
Homeplus Co.'s position is that proceeds from the sale of trust-collateral real estate must by law be used first to repay collateral loans, leaving no alternative. It also emphasizes that, compared with rehabilitation claims repaid over six to 10 years, public-interest claims are repaid first. A company official said, "All public-interest claims are to be repaid in the same manner by type regardless of consent, so consenting does not disadvantage only those claims," and added, "Some public-interest creditors' misunderstandings are delaying consent." Homeplus Co. is asking for understanding on the grounds that if it fails to win approval and converts to bankruptcy, recovery rates on claims would fall and repayment periods would lengthen, increasing creditor losses.
The company, the previous day, said sales since reopening in August reached 116.4 billion won, up 57% from the same period before operations were halted, as it made a final push to persuade public-interest creditors. It also lamented the difficulty that only volumes eligible for advance payment within operating funds are being brought in. The structure, it said, is that deliveries must normalize for sales to recover, and sales must recover to repay the arrears.
In the end, the court is expected to decide on whether to approve the plan by considering the public-interest creditors' consent rate alongside the letters of opposition. Even if requirements are not met, there is a path to forced approval considering social impact, but there is concern that critics could say the justification is insufficient. A Homeplus Co. official said, "If approval is granted, we will start by selling 19 owned stores among the 37 closed locations."