The Seoul Bankruptcy Court decided to apply the so-called pre-packaged bankruptcy program (P-plan) to Lake Hills Suncheon, a local golf clubhouse, as the first case on the novel reorganization scheme that involves both court protection and creditors relief to facilitate a turnaround for a company with probable viability.
The bankruptcy court initiated the program on Monday to revive Lake Hills Suncheon, an affiliate of the country’s largest golf courses operator Lake Hills Co. The pre-packaged solution, a mixture of court and creditors relief program, allows a troubled company to get necessary funding from creditors once debts are eased through a court program, thus helping the firm to get back on its feet faster than a lengthy court receivership.
Lake Hills Suncheon filed for court-led reorganization program last month with a plan to sell the company to Golf Zone County at 70 billion won ($65 million) through a stalking-horse bidding process. As the company successfully had more than 70 percent of its creditors agree on the plan, the court decided to immediately initiate the P-plan by selecting a sales adviser as soon as possible. It would be able to wrap up the turnaround procedure as early as mid-May if the sale is completed without a hitch.
P-plan has been rarely adopted since it was first introduced to the country in August 2016 with an aim to simplify bankruptcy procedures and quicken corporate turnaround. Some troubled companies including book wholesaler Songin Books and solar module manufacturer Solar Park Korea applied for P-plan but the plan was turned down by the court due to lack of preparation or failure to receive creditors’ consent.
By Boo Jang-won and Choi Mira
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