The Korea Deposit Insurance Corporation (KDIC) lost in both the first trial and the appeals court in a lawsuit demanding the return of 4.5 billion won from private developer lawyer Nam Wook related to the Daejang-dong development project.
On the 10th, according to the legal community, the Seoul High Court's Civil Division 7 (presiding judge Director General Lee Jae-young) issued a ruling favoring the defendant on the 25th of last month in the appeal case filed by the KDIC against lawyer Nam. The KDIC is the bankruptcy administrator of eight savings banks, including Busan Savings Bank and Yeongnam Savings Bank.
This lawsuit is intertwined with the chain bankruptcy of savings banks in the 2010s and the Daejang-dong development project. Early project operator A received a loan of 111 billion won from eight savings banks, including Busan Savings Bank and Yeongnam Savings Bank, through the construction firms DahanuL (formerly C7) and Pangyo PFV (formerly Daejang PFV) from 2009 to 2010. Subsequently, A transferred the business rights to another operator, B.
Lawyer Nam became the representative and largest shareholder of the construction firms when he received the Daejang-dong development rights from B in 2011. In 2012, the construction firms requested the savings banks to change the representative director and the joint guarantor from A to Nam in accordance with the loan agreement. However, the savings banks withheld their consent, stating that Nam did not appear to have a higher repayment ability compared to A.
Subsequently, all the savings banks went bankrupt. In response, the KDIC, which served as the bankruptcy administrator, only approved the request to change the joint guarantor about 10 years later and filed a lawsuit in 2022 demanding Nam to repay 4.5 billion won, which was part of the loans from the construction firms.
The first trial ruled in favor of lawyer Nam in July 2023. The first trial court determined, "Debt assumption requires the creditor's consent, and since the KDIC did not provide a definitive answer for a considerable period, it should be regarded as a rejection of consent."
The KDIC appealed the first trial ruling, but the appeals court dismissed the appeal. The appeals court stated, "It is difficult to see that lawyer Nam established another corporation to evade debt and amassed billions of won," adding, "It is also difficult to consider that the bankruptcy of the savings banks was due to lawyer Nam's default."