Nolboo, a first-generation Korean cuisine franchise that filed for rehabilitation, will be placed under the supervision of a custodian appointed by the court in place of the existing management. The court, which determined it needs more time to decide whether to commence rehabilitation, has entrusted the company's assets to a neutral third party.
According to legal sources, the Seoul Bankruptcy Court issued a preservation management order to Nolboo Co. at 11 a.m. on the 31st. A preservation management order is a system in which, if the court finds that preservation measures alone are insufficient after an application to commence rehabilitation is filed, it appoints a custodian and excludes the existing executives' rights to perform duties and to manage and dispose of assets.
The court determined that, as it is expected to take somewhat more time to review whether Nolboo meets the requirements to commence rehabilitation, it is appropriate for a neutral third party rather than the existing management to preserve the assets in the meantime.
Accordingly, actions such as repaying pecuniary obligations incurred before the order was issued, disposing of company assets, or making expenditure exceeding 10 million won require the custodian to obtain the court's approval. A preservation management order is a temporary measure that changes who manages the company and is distinct from a decision to commence rehabilitation.
Nolboo applied to commence rehabilitation with the Seoul Bankruptcy Court on the 31st of last month. The court issued a comprehensive stay order on the 4th and conducted the first representative examination by summoning Chief Executive Kim Yong-wi on the 11th. A comprehensive stay order is a measure that restricts creditors' provisional seizures, injunctions, and compulsory execution until it is decided whether rehabilitation will commence.
After finishing the first examination, Kim said, "We are doing our best to save the company." As the background for the management difficulties, Kim cited sluggish dining-out demand, rising labor and food ingredient costs, and an increase in franchise closures. At the time, the court planned to determine whether to commence rehabilitation after additional examinations.
Nolboo began in 1987 as a bossam shop and, at one point, was a first-generation domestic dining franchise with 1,000 franchises and annual sales exceeding 120 billion won. In 2011, Morgan Stanley Private Equity acquired it for 111.4 billion won, and in 2021, special purpose company NB Holdings took over management control.
Results deteriorated for years due to intensifying competition in the restaurant industry and the impact of COVID-19. It posted operating losses for six consecutive years from 2017 to 2022, turned a profit in 2023, and then fell back into the red. According to the 2025 audit report, last year's revenue was 63.9 billion won, down about 16% from the previous year's 76.1 billion won. The operating loss increased from 600 million won to 8.7 billion won, accumulated deficits at the end of last year were 95.9 billion won, and the capital impairment ratio was 82%.
The court plans to continue reviewing the commencement requirements under the custodian system and then decide whether to commence Nolboo's rehabilitation.