A vote by creditors and others that will determine whether Homeplus Co. can be revived will take place on Sept. 2. While the court extended the deadline to approve the rehabilitation plan to Sept. 4, it decided to convene a stakeholders' meeting just two days before the deadline to review and vote on a revised rehabilitation plan.
The 4th Division for Rehabilitation of the Seoul Bankruptcy Court (Chief Judge Jeong Jun-young, Presiding Judge Park So-young, Director General) said on the 13th it will hold the Homeplus Co. stakeholders' meeting at 3 p.m. on Sept. 2. Homeplus Co. submitted a second revised rehabilitation plan to the court the day before.
A stakeholders' meeting is a procedure in rehabilitation proceedings in which creditors, secured rehabilitation creditors, shareholders, and other interested parties review the rehabilitation plan and decide whether to approve it. Homeplus Co. must secure the necessary consents from creditors and others by Sept. 4, the current approval deadline.
This stakeholders' meeting is the first full-fledged voting procedure since Homeplus Co., after once receiving a decision to discontinue rehabilitation, secured 200 billion won in debtor-in-possession (DIP) emergency operating funds and was able to resume the rehabilitation process.
On Aug. 3, the court decided to discontinue Homeplus Co.'s rehabilitation proceedings. It said no concrete and realistic supporting materials had been submitted regarding the plan to raise 200 billion won needed to carry out the rehabilitation plan, and it judged there was no practical possibility of carrying out the plan.
However, at the time the court left open the possibility of resuming the proceedings through a reconsideration device if an immediately appealable plan to raise funds that could be realized within 14 days after the decision was prepared and an immediate appeal was filed. A reconsideration device is a procedure in which the court that rendered the original decision reexamines and changes that decision on its own when an immediate appeal is filed.
Afterward, the main creditor group—Meritz Fire & Marine, Meritz Securities, and Meritz Capital—each held a board meeting on Aug. 16 and approved a plan to lend Homeplus Co. a total of 200 billion won in emergency operating funds.
Having prepared a funding plan, Homeplus Co. filed an immediate appeal with the court. In the appeal, Homeplus Co. argued that "by receiving a commitment letter for 200 billion won in DIP financing, the issue of feasibility in carrying out the rehabilitation plan has been resolved."
The court accepted this and on Aug. 21 canceled the decision to discontinue the rehabilitation proceedings. It also extended the deadline to approve the rehabilitation plan to Sept. 4.
Accordingly, at the Sept. 2 stakeholders' meeting, the key will be whether Homeplus Co. can secure the necessary consents for the second revised rehabilitation plan it has prepared. If the rehabilitation plan is approved, the matter will move to the court's decision on confirmation. Conversely, if the necessary consents are not obtained, the possibility of discontinuing the rehabilitation proceedings could be raised again.
Homeplus Co. does not have much time left. In principle, the deadline to approve a rehabilitation plan is one year from the date the rehabilitation proceedings commence, and it can be extended by up to six months if there are unavoidable reasons. Given that Homeplus Co. received a decision to commence rehabilitation on Mar. 4 last year, the currently extended Sept. 4 is effectively the last deadline to dispose of the rehabilitation plan.
Operationally, the immediate crisis has been put out for now. After securing emergency operating funds, Homeplus Co. resumed operations on the 67 stores that had gone into temporary closure that day.