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Hong Jeong-do, Vice Chairman of JoongAng Group, bows deeply in apology during a press conference held at the JoongAng Ilbo building in Mapo-gu, Seoul, on June 15, regarding the corporate rehabilitation filings of JTBC and other group affiliates triggered by a severe liquidity crisis. / Photo courtesy of Yonhap News Agency

The Seoul Bankruptcy Court has frozen the assets and liabilities of five JoongAng Group affiliates, including general programming cable network JTBC, following their recent filings for corporate rehabilitation.

According to legal circles on June 16, the Rehabilitation Division 2 of the Seoul Bankruptcy Court, presided over by Chief Judge Jung Joon-young, issued preservation orders and comprehensive stay orders on June 15 for JoongAng Holdings, the holding company of JoongAng Group, as well as JTBC, ContentreeJoongAng, MegaboxJoongAng, and JoongAng P&I.

A preservation order restricts a debtor from disposing of assets or concealing capital prior to the court's official restructuring decision. A comprehensive stay order legally bars creditors from enforcing mandatory executions, provisional attachments, or foreclosures against the debtor's estate.

The financial gridlock began on June 12 when JTBC declared a technical default after failing to roll over or repay 20.6 billion won in asset-backed securitized loans at maturity. Financial analysts attribute the network's liquidity crunch to a sharp contraction in the traditional television advertising market, driven by a rapid structural shift toward over-the-top (OTT) streaming platforms.

Following the default, JoongAng Holdings, ContentreeJoongAng, JoongAng P&I, and MegaboxJoongAng filed for corporate restructuring on June 14, with JTBC officially tendering its own rehabilitation petition the following day on June 15.

The court is anticipated to schedule closed-door representative interrogations shortly. Under the Debtor Rehabilitation and Bankruptcy Act, the presiding bench must conduct a thorough judicial examination of the debtor's corporate executives or designated representatives before officially greenlighting the commencement of court receivership.

Meanwhile, domestic credit rating agencies have moved in tandem to slash the credit ratings and investment outlooks of major JoongAng Group corporate bonds and commercial papers.

                                                                                                         Son Seung-hyun