Korea Pizza Hut has filed for the commencement of rehabilitation proceedings with the court.
The Seoul Rehabilitation Court announced on the 5th that Korea Pizza Hut applied for the commencement of rehabilitation proceedings and the Autonomous Restructuring Support (ARS) program the day before. The ARS program is a system where a company autonomously negotiates repayment plans with creditors. During this period, the rehabilitation proceedings are put on hold.
The Rehabilitation Division 12 of the court, presided over by Chief Judge Oh Byung-hee, which was assigned the case, issued preservation orders and a comprehensive injunction on the same day.
The preservation order prevents the company from disposing of assets to preferentially repay certain creditors. Conversely, the comprehensive injunction freezes creditors' claims to prevent them from securing the company's major assets through compulsory execution, provisional seizure, auction, etc., before the commencement of corporate rehabilitation.
Earlier, Korea Pizza Hut lost in the second trial of an unjust enrichment refund lawsuit filed by 94 franchisees against the headquarters last month. The first trial ordered Korea Pizza Hut to compensate the franchisees 7.5 billion KRW, and the compensation amount increased to 21 billion KRW in the second trial.
A representative of the Seoul Rehabilitation Court stated, “Korea Pizza Hut applied for the ARS program to amicably resolve the issue of compulsory execution following the recent lawsuit results with its franchisees (creditors).”
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