[Invest&Law] Examining the Validity of '1.3 Trillion KRW Property Division'

Dosan and Rehabilitation Experts in Charge of
Choi Tae-won and Noh So-young's 'Divorce of the Century'
Supreme Court Legal Deliberation Officially Begins
Presiding Justice Seo Kyung-hwan Appointed
Key Issues Include Share Nature and Property Contribution
Conclusion Expected Possibly Within This Year

The "divorce trial of the century" between Choi Tae-won, chairman of SK Group, and Noh So-young, director of Art Center Nabi, involving a property division worth 1.3808 trillion won, has drawn significant attention from the business and legal communities as it has been assigned to Supreme Court Justice Seo Kyung-hwan (21st Judicial Research and Training Institute), known as an expert in corporate bankruptcy and rehabilitation cases.

According to the legal community on the 13th, the Supreme Court's legal hearing for Chairman Choi and Director Noh's appeal began in earnest at midnight on the 8th. A conclusion is expected as early as this year. The Supreme Court's First Division (presiding Justice Seo Kyung-hwan) decided not to dismiss the appeal for failure to proceed but to conduct a formal hearing after reviewing the reasons for appeal from Chairman Choi's side for about three months since August 22. It was judged necessary to closely examine issues such as the nature of the SK Group shares and other assets held by Chairman Choi, and Director Noh's contribution to the formation of the property.

When the Supreme Court assigned this case to the First Division on August 21, Justice Seo was appointed as the presiding justice to conduct an in-depth review and lead the consensus, likely considering his capabilities demonstrated in corporate cases. Justice Seo first donned the judicial robe in March 1995 and, in his third year in 1997, worked in a division at the Seoul Central District Court handling corporate court management, bankruptcy, and rehabilitation procedures. He studied consumer bankruptcy during a training stint at George Washington University in the United States and served as the senior presiding judge of the Seoul Bankruptcy Court in 2019 before becoming its chief judge in 2021.

In July, when he was appointed as a Supreme Court justice, he issued a majority opinion in a case concerning whether the statute of limitations runs on child support claims held by one divorced parent who solely cares for the children, stating that "the statute of limitations proceeds even before the child support claim is concretely established as a payment claim."

In the case of Chairman Choi and Director Noh, the court is expected to scrutinize the connection between the couple's assets and SK Group in detail and review the validity of the lower court ruling ordering Chairman Choi to divide 35% of the total assets, amounting to 1.3808 trillion won, to Director Noh. The amount of property division Director Noh should receive depends on her contributions to the family and the company. A key issue is whether Chairman Choi's SK (formerly Korea Telecom) shares are "separate property" inherited from his father. Director Noh's side argues that it is marital property, but SK's side claims it is clearly separate property acquired with funds gifted from the father. Attention is also focused on the judgment regarding former President Roh Tae-woo's "300 billion won slush fund." It is important whether the funds actually flowed into SK and whether they influenced the group's growth. The second trial previously ruled, based on a memo by Mrs. Kim Ok-sook, that SK grew by receiving the "300 billion won slush fund from Roh Tae-woo," although the timing and method of the fund transfer were not specified.

Chairman Choi initially filed for divorce mediation with Director Noh in July 2017 but failed to reach an agreement by February 2018 and proceeded to a formal lawsuit. During this process, in December 2019, Director Noh filed a countersuit demanding property division. The Family Division 2 of the Seoul High Court, which handled the second trial, in May viewed the combined assets of both parties as about 4 trillion won and significantly increased the property division amount to 1.3808 trillion won, which is 35%, ordering Chairman Choi to pay this amount to Director Noh along with 2 billion won in consolation money. Chairman Choi appealed to the Supreme Court.