JoongAng Holdings Vice Chairman Hong Jeong-do said after appearing for a court representative examination on the 23rd for JoongAng Group affiliates that filed for rehabilitation, "I will faithfully follow the court's decision." A representative examination is a procedure to confirm the financial condition of companies that applied for rehabilitation and their plans for debt adjustment.
The Rehabilitation Division 2 of the Seoul Bankruptcy Court (Presiding Judge Jeong Jun-young) began representative examinations at 10 a.m. that day, starting with JoongAng Holdings, for five JoongAng Group affiliates.
Hong arrived at the court at about 9:54 a.m. that day and headed to the courtroom without stating a separate position. The representative examinations for the two JoongAng Group affiliates Hong attended lasted about 2 hours and 20 minutes.
After finishing the examination, Hong, asked by reporters what points were emphasized, said, "I answered sincerely and well."
Asked whether liquidation rather than rehabilitation was also possible, Hong answered, "I will faithfully follow all of the court's decisions." Hong did not answer questions asking for a message to affiliate creditors or the reason Hong believed normal management was possible up to just before default.
The examination that day was conducted by handling the JoongAng Holdings and JoongAng P&I cases together. A lawyer for JoongAng Group said, "Vice Chairman Hong said losses from contracts with the International Olympic Committee (IOC) and the Fédération Internationale de Football Association (FIFA) would be reduced and that the three troubled units, including Megabox, would be properly handled through rehabilitation."
According to the lawyer, the examination mainly addressed the financial condition, including the asset status and liability status. Whether a private contribution method using the owner family's personal assets to resolve the rehabilitation was possible was not discussed.
Presiding Judge Jeong, asked by reporters whether the result that day could come out the next day rather than that day, said, "We will discuss and decide after everything is finished."
At about 1:45 p.m. that day, JTBC CEO Jeon Jin-bae appeared for the representative examination. Asked by reporters for a position related to the examination, Jeon said, "I will explain in detail to the court the management situation JTBC is facing."
The examinations that day are being conducted for JoongAng Holdings, JoongAng P&I, JTBC, Megabox JoongAng and Contentree JoongAng.
JoongAng Group's liquidity crisis came to light when JTBC failed on the 12th to repay by maturity a 20.6 billion won securitized borrowing fund. After JTBC declared a debt default, JoongAng Holdings, Contentree JoongAng, JoongAng P&I and Megabox JoongAng filed for commencement of rehabilitation on the 14th. JTBC also filed separately for rehabilitation on the 15th.
The court has issued preservation measures and a comprehensive stay order for each company. Preservation measures are steps that prevent a company from disposing of key assets or repaying specific creditors first before the commencement of rehabilitation. A comprehensive stay order is a procedure that restricts creditors' compulsory execution, provisional seizure or auctions.
JTBC submitted an application asking the court to defer the decision to commence rehabilitation and expressed its intention to pursue the Autonomous Restructuring Support (ARS) program. ARS is a system in which the court temporarily postpones the commencement of rehabilitation and has corporations and creditors consult on debt adjustment plans.
The Debtor Rehabilitation and Bankruptcy Act stipulates that when there is a rehabilitation application, the court shall examine the debtor or the debtor's representative.