Han Young Accounting appointed as examiner for all four companies
Next steps: bond filing, bond investigation, rehabilitation plan submission
JTBC granted approval under Autonomous Restructuring Support program
A court has opened rehabilitation proceedings for four affiliates of JoongAng Group, while deferring a decision on JTBC until July 30.
The Seoul Rehabilitation Court's Second Rehabilitation Division, presided over by Chief Judge Jeong Jun-yeong with Senior Judge Hong Jun-seo as the presiding judge, ruled Tuesday to commence rehabilitation proceedings for JoongAng Holdings, Megabox JoongAng, JoongAng P&I and ContentreeJoongAng.
Under the court's ruling, the bond filing deadline for JoongAng Holdings was set for Aug. 18, with a bond investigation deadline of Sept. 15. The company must then submit an investigation report by Nov. 10 and a final rehabilitation plan by Dec. 22.
Deadlines for the other three affiliates were set as follows: bond filing deadlines of Sept. 1 for Megabox JoongAng, Aug. 11 for JoongAng P&I and Aug. 18 for ContentreeJoongAng; and rehabilitation plan submission deadlines of Dec. 1 for Megabox JoongAng, Dec. 22 for JoongAng P&I and Dec. 15 for ContentreeJoongAng.
For the upcoming bond filing process, once a company submits its list of creditors, rehabilitation claims, secured rehabilitation claims and shareholder equity interests recorded on that list will be deemed filed within the filing period. Creditors do not need to file separately.
The court decided not to appoint a separate administrator for the rehabilitation proceedings, instead designating each company's current representative as its administrator. Creditor committees will be composed of the companies' major creditors and will work with law firms and accounting firms to negotiate financial restructuring with the debtor companies throughout the process.
The court appointed Han Young Accounting as the examiner for all four companies.
The examiner will investigate the circumstances that led to the rehabilitation proceedings, assess asset values, and evaluate both the going-concern value — the value of the business as a continuing operation — and the liquidation value.
The four affiliates had filed for rehabilitation with the Seoul Rehabilitation Court on June 14 and 15, submitting applications for preservation orders and comprehensive injunctions at the time.
A preservation order freezes a debtor's assets to prevent the company from disposing of property or providing collateral or repayment to creditors. A comprehensive injunction prohibits compulsory execution, provisional seizure and provisional disposition against the debtor.
The court issued preservation orders and a comprehensive injunction on June 15, then held a hearing to examine the companies' representatives on June 23. It subsequently formed creditor committees on June 24 and 25 before approving the start of rehabilitation proceedings Tuesday.
Separately, the court Tuesday accepted JTBC's application under the Autonomous Restructuring Support (ARS) program, deferring a decision on whether to open formal rehabilitation proceedings for the broadcaster until July 30.
Under the ARS regime, rather than immediately commencing rehabilitation proceedings, the court holds off for a set period while the company negotiates debt restructuring directly with its creditors.
notstrong@heraldcorp.com
