2024-08-03 19:43:54
The court approved the application for the autonomous restructuring support (ARS) program of Timon and WeMakePrice, which caused a large-scale settlement delay. The ARS program is a system in which the company autonomously discusses repayment plans with creditors. The court gave the company and creditors one month to discuss. The ARS program was approved as Timon and WeMakePrice wanted, but many are concerned about whether the program will proceed properly due to difficulties in forming a creditors’ meeting and raising funds.
● I gained a month of time, but…
On this day, the Seoul Rehabilitation Court, Rehabilitation Division 2 (Presiding Judge Ahn Byung-wook) summoned the representatives of both companies one after another and conducted a closed-door hearing, and announced the approval results about an hour after the end. The court said, “In order to support voluntary restructuring between creditors (unsettled companies) and debtors (Tmon and WeMakePrice), we decided to postpone the decision on whether to initiate rehabilitation procedures until the 2nd of next month.” The postponement period can be extended by one month for up to three months.
With the program approved, a creditors’ meeting is expected to be held next week, and creditors and the two companies will have the opportunity to negotiate with the court’s support. The court plans to hold a rehabilitation procedure meeting on the 13th of this month, which will include creditors, the two companies, the government, and related organizations.
There is speculation within and outside the legal community and the distribution industry that the negotiation process will not be easy. Kim Gwang-joong, director of Haurim Law Firm and a corporate rehabilitation expert, said, “ARS is asking for a three-month extension of whether to initiate corporate rehabilitation in exchange for negotiations with creditors, but aren’t Tmon and WeMakePrice short on cash?” “They need money right away to pay the victims the money they owed and recover their losses, but it doesn’t seem easy at the moment when stores are leaving and it’s difficult to resume operations.”
There is an outlook that the formation of a creditors’ council, which is the first step of the program, will not be easy. The number of creditors is currently estimated at at least 60,000, so the formation may take time.
Timon and WeMakePrice plan to prepare self-rescue measures through financing and restructuring funds. A WeMakePrice official said, “We will prepare self-rescue measures and work toward minimizing the number of victims as much as possible.”
If negotiations are amicably reached through the ARS program, the corporate rehabilitation application will be withdrawn. If negotiations fail even after this, or if creditors holding more than two-thirds of the total debt oppose the ARS process, the court must decide again whether to initiate corporate rehabilitation.
● Concerns over ‘1 trillion won unsettled amount’ becoming a reality
According to the Financial Supervisory Service, the amount of unsettled sales proceeds from Timon and WeMakePrice increased by about 60 billion won from the most recently announced figure of 213.4 billion won (last month 25th) to 274.5 billion won (last month 31st). It is increasing by 10 billion won per day. On this day, the financial authorities predicted that if transactions from June and July are included, the amount of unsettled proceeds could more than triple from the current amount and exceed 800 billion won.
Similar analysis came out in the market. Data platform company IGA Works Mobile Index estimated the total card payment amount of Tmon and WeMakePrice in June and July to be 1.1967 trillion won. The figure only estimates the card payment amount of the two companies, and the total transaction amount could be larger if other payment methods are included.
Meanwhile, the Korea Consumer Agency announced that the number of dispute mediation applications related to Timon and WeMakePrice was 3,340 as of 6 p.m. on the 2nd. Regarding this incident, the Consumer Agency warned of fraud attempts that involved imitating refund forms and inducing victims to enter their personal information, purchase history, etc., and then demanding money based on these forms, claiming that they were needed for compensation and refunds.
Reporter Kim Eun-ji [email protected]
Reporter Kim Tae-eon [email protected]
Sejong = Reporter Sosulhee [email protected]
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2024-08-03 19:43:54