The court has begun full-fledged hearings on the rehabilitation cases of JoongAng Group affiliates triggered by JTBC's default.
The Seoul Bankruptcy Court's Rehabilitation Division 2 (presiding judge President Judge Jeong Jun-yeong) on the morning of the 23rd began representative examinations for five JoongAng Group affiliates, starting with JoongAng Holdings. The representative examination is a procedure to check a company's financial condition, debt adjustment plans, and the possibility of continued operations before determining whether to commence rehabilitation proceedings.
Vice Chair Hong Jeong-do appeared as the representative of JoongAng Holdings. Hong arrived at the court at about 9:54 a.m. and entered the courtroom without making a separate statement.
Those subject to examination are JoongAng Holdings, JoongAng P&I, JTBC, Megabox JoongAng, and Contentree JoongAng. The rehabilitation petitions of these companies have all been assigned to the Seoul Bankruptcy Court's Rehabilitation Division 2, and the same panel is hearing them.
JoongAng Group's liquidity crisis surfaced when JTBC failed to repay 20.6 billion won in securitized borrowing fund by maturity on the 12th. After JTBC declared a default, JoongAng Holdings, Contentree JoongAng, JoongAng P&I, and Megabox JoongAng filed for commencement of rehabilitation proceedings on the 14th. JTBC separately filed for rehabilitation on the 15th.
The court has already issued preservation measures and a comprehensive stay order for each company. Preservation measures prevent a company from disposing of key assets or giving preferential repayment to specific creditors before the commencement of rehabilitation proceedings. A comprehensive stay order uniformly restricts creditors' compulsory execution, provisional seizures, and auctions.
A key issue ahead is the Autonomous Restructuring Support (ARS) program that JTBC applied for. On the 14th, JTBC submitted an application asking to delay the decision on commencing rehabilitation proceedings and indicated it would discuss a voluntary restructuring with creditors under court supervision. ARS is a system under which the court defers the commencement of rehabilitation proceedings and allows corporations and creditors to discuss debt adjustment plans.
If the bench accepts ARS, the decision on whether to commence JTBC's rehabilitation could be delayed for a period. However, for other affiliates such as JoongAng Holdings, there is a possibility that the decision on whether to commence rehabilitation proceedings will be made separately based on the results of the representative examinations and the submitted materials.
The Debtor Rehabilitation and Bankruptcy Act provides that the court must decide whether to commence rehabilitation proceedings within one month from the date of the application.