Nolbu files for court receivership; CEO is former Yoon photographer

Restaurant franchise Nolbu has filed for court receivership.

The Seoul Bankruptcy Court's Receivership Division 15, presided over by Judge Kim Yun-seon, issued a blanket injunction against Nolbu on Tuesday after the company sought court protection.

A blanket injunction suspends all forced executions, provisional attachments, provisional dispositions and auctions on a debtor's assets while the court decides whether to formally open receivership proceedings.

The court is scheduled to hold a representative hearing at 4:30 p.m. on Tuesday to examine the company's total debt, debt restructuring options and prospects for recovery.

Nolbu is one of South Korea's first-generation hansik ("Korean food") franchise chains, tracing its roots to a bossam restaurant in Sillim-dong, Gwanak-gu, Seoul, in 1987. Through the 1990s and 2000s, it expanded to more than 1,000 stores nationwide on the strength of its Nolbu Bossam & Jokbal and Nolbu Budae Jjigae brands, becoming one of the most recognized names in the country's dining industry.

The company is currently led by Kim Yong-wi, who previously served as former President Yoon Suk Yeol's personal photographer and as head of the presidential office's media management team. The largest shareholder is Envi Holdings.

Brand aging, intensifying competition in the dining market and shifts in consumer behavior following the COVID-19 pandemic appear to have combined to weigh on the company's performance.

According to the Financial Supervisory Service's DART system, Nolbu posted an operating loss of 8.69 billion won ($6.1 million) last year, roughly 14.8 times wider than the 585 million won loss recorded the previous year.

Sales fell 16.1 percent year-on-year to 63.85 billion won. The net loss widened to 13.93 billion won, about nine times the 1.56 billion won loss posted the year before.

Accumulated deficit grew 17 percent year-on-year to 95.92 billion won. As of the end of last year, the capital impairment ratio stood at 82.2 percent, leaving the company in a state of partial capital erosion.

Last year's results were weighed down by higher promotional and marketing costs, provisions for receivables deemed unlikely to be recovered, and write-downs on intangible and investment assets.