Deals & Cases

General Civil Disputes 2023-07-18
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DR & AJU Successfully Represents Woori Bank in Litigation for a Claim for Commitment against Sambu Construction

In June 2011, Woori Bank and Sambu Construction signed a security trust agreement for about 350 shares of Nam Woo Tourism Co., Ltd. that Sambu Construction held. According to the terms of the agreement, expenses related to trust property management, such as tax, and commission for share split and share purchase, shall be funded from the trust property, and if deemed necessary by Woori Bank, shall be claimed from a beneficiary or Company A. Meanwhile, the Seoul Rehabilitation Court issued Sambu Construction a decision on the commencement of the rehabilitation procedure (“commencement”) in 2015. The rehabilitation plan of Sambu Construction was approved in February 2016, and the court decided on the conclusion of the rehabilitation procedure in October 2017.

The head of the Yeoksam Tax Office designated Woori Bank as the secondary taxpayer of Nam Woo Tourism under the aforementioned security trust agreement.  After adding surcharges to the outstanding tax amount, the tax authority issued Woori Bank a payment notice for a total of approximately KRW 2.4 billion, including corporate taxes for the 2011 fiscal year, limited to the amount obtained by multiplying the percentage of shares of the company with the outstanding tax amount. After fully paying the taxes, Woori Bank filed a lawsuit against Sambu Construction, claiming that according to the trust agreement, Sambu Construction had an obligation to pay all taxes incurred by entrusting the shares for holding and management.

The main issue of the trial was whether the claim for payment, including the corporate tax of Woori Bank, corresponded to a rehabilitation claim or priority claim in the event that Woori Bank bears secondary tax liability after the rehabilitation procedure of Sambu Construction and whether it corresponds to the “other claims after the commencement.” DR & AJU successfully led the argument on behalf of Woori Bank, stating that the bank's claims for the agreed-upon amount of taxes fall under the category of "other claims after the commencement" as stipulated in Article 181(1) of the Debtor Rehabilitation and Bankruptcy Act. As a result, the court issued a verdict ordering Sambu Construction to pay Woori Bank approximately KRW 2.4 billion.

DR & AJU represented Woori Bank in the entire litigation process from the first instance to the third instance, and achieved results in favor of Woori Bank. On July 14, 2022, the Supreme Court issued a final decision rejecting the appeal.  Since this case was handled and progressed for over two years, starting from 2020, DR & AJU successfully defended Woori Bank and won all three trials, receiving the utmost trust from Woori Bank.