After JTBC declared a default, the rehabilitation proceeding petitions filed by JoongAng Group affiliates were assigned to the Second Bankruptcy Division of the Seoul Bankruptcy Court. The Second Bankruptcy Division is presided over by Chief Judge Jeong Jun-young of the Seoul Bankruptcy Court.
On the 15th, the Seoul Bankruptcy Court assigned the rehabilitation cases filed by Megabox JoongAng, JoongAng P&I, JoongAng Holdings, Contentree JoongAng, and JTBC to the Second Bankruptcy Division. The court gave separate case numbers to the five companies' petitions, while having the same panel hear them together.
The Seoul Bankruptcy Court operates by assigning major cases or cases with liabilities of 300 billion won or more to a panel presided over by the chief judge. This case also appears to have been assigned to the chief judge's panel because major JoongAng Group affiliates jointly filed for rehabilitation.
Of the five cases, three were assigned to Presiding Judge Hong Jun-seo as the reporting judge, and two to Presiding Judge Kwon Seong-woo. The reporting judge is the judge in a collegiate panel who primarily reviews the record and organizes the key issues. However, specific procedural schedules, such as the representative examination date, have not yet been set.
JoongAng Holdings, Contentree JoongAng, JoongAng P&I, and Megabox JoongAng filed for the commencement of rehabilitation proceedings with the Seoul Bankruptcy Court the day before. JTBC filed for rehabilitation on the same day. Rehabilitation is a procedure that allows corporations that are temporarily unable to bear their debt to adjust their debt under court supervision and continue operations.
JoongAng Group affiliates also applied for preservation orders and comprehensive stay orders along with their rehabilitation petitions. A preservation order prevents a company from disposing of key assets or repaying a particular creditor ahead of others before the commencement of rehabilitation. A comprehensive stay order is a procedure that bars creditors from individually securing company property through compulsory execution, provisional seizure, or auction.
On the 12th, JTBC declared a default after failing to repay 20.6 billion won in securitized borrowing funds by maturity. The failure to refinance securitized assets that had come due amid continued weak earnings has been cited as the cause.
The Seoul Bankruptcy Court will decide whether to commence rehabilitation after representative examinations for each company and a review of the submitted materials.