Shin & Kim successfully appealed and obtained a reversal of a court approval of a liquidation program put forward by the Nasan Group that would have denied KRW 62.5 billion in claims by SG ABS Specialty Company, a subsidiary of Seoul Guarantee Insurance Co., Ltd. Nasan’s liquidation program, if left unchallenged, would have excluded Seoul Guarantee Insurance’s liquidation voting rights in an effort to satisfy separate M&A debts of KRW 350 billion.

Shin & Kim immediately appealed the court’s decision and filed related lawsuits to protect Seoul Guarantee Insurance’s financial interests as Nasan’s largest creditor.

In September 2007, the Seoul High Court sustained Shin & Kim’s appeal and ordered Nasan to adjust its liquidation program to satisfy the claims of SG ABS Specialty. As a result, Shin & Kim was able to get all of Seoul Guarantee Insurance’s creditor rights restored despite the efforts of Nasan and the initial decision of the trial court.

Shin & Kim’s successful appeal is particularly noteworthy because, in general, once a court in Korea approves a proposed liquidation program, the odds of it being overturned on appeal are highly unlikely, even when it contains unreasonable or even unlawful aspects. In this case, however, the Seoul High Court fully acknowledged the creditor claims of Seoul Guarantee Insurance and reversed the prior authorization.

This decision establishes an important precedent that the rights of creditors should not be dishonored by a court in the process of a liquidation action.