'Myeongji University, Once Facing Bankruptcy, Graduates from Rehabilitation Process After Retake'

Myongji Academy, a school foundation, has completed its rehabilitation process after a retake. Myongji Academy operates Myongji University, Myongji College, and Myongji Elementary, Middle, and High Schools.

Myongji University campus. [Photo by Myongji University website]

According to the legal community on the 8th, the Seoul Rehabilitation Court’s Rehabilitation Division 3 (Presiding Judge An Byung-wook) announced on the 5th that it had decided to conclude the rehabilitation process of Myongji Academy. The court stated, “The debtor (Myongji Academy) has started repayments according to the rehabilitation plan, and it is not recognized that there will be any obstacles to the execution of the rehabilitation plan going forward.”

The rehabilitation court generally concludes the rehabilitation process when ▲ the debtor’s total assets stably exceed total liabilities ▲ a third party has taken over the debtor or the debtor’s sales and business performance are favorable enough to secure funding necessary for executing the rehabilitation plan ▲ continuing the rehabilitation process is not deemed advantageous for disposing of collateral ▲ and it is expected that the debtor’s business and sales will improve upon concluding the rehabilitation process.

Myongji Academy faced a bankruptcy crisis after incidents such as the Silver Town sales fraud case in 2004. Initially, Myongji Academy planned to develop a golf course for residents, but it is known that they did not obtain the necessary permits. Subsequently, in 2013, the court ruled that Myongji Academy must compensate 33 victims of the sales fraud with a total of 19.2 billion KRW. As the compensation was delayed, creditors filed for bankruptcy against Myongji Academy.

SGI Guarantee Insurance, the largest creditor of Myongji Academy, filed for rehabilitation, but the court decided to dismiss the rehabilitation process in February 2022, pushing the academy toward bankruptcy. Afterwards, Myongji Academy reapplied for rehabilitation. In April 2022, the court decided to commence the rehabilitation process, and in July of last year, it finally approved the rehabilitation plan.