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Seoul Bankruptcy Court / Reporter Son Seung-hyun

The Seoul Bankruptcy Court has initiated rehabilitation proceedings for five affiliates of JoongAng Group.

The Court's Rehabilitation Division 2, led by Chief Judge Jung Joon-young, commenced the interrogation of representatives from JoongAng Holdings at 10:00 AM on June 23. Individual hearings for the remaining affiliates are scheduled to follow sequentially, with JoongAng P&I at 11:00 AM, JTBC at 2:00 PM, Megabox JoongAng at 3:00 PM, and Contentree JoongAng at 4:00 PM.

During the questioning, corporate representatives are expected to brief the bench on their current debt structures and outline proposed debt restructuring plans. Based on these presentations, the court will evaluate whether to officially open rehabilitation proceedings. Under the Debtor Rehabilitation and Bankruptcy Act, the court is mandated to rule on the commencement of rehabilitation within one month from the initial filing date.

The liquidity crisis at JoongAng Group unraveled on June 12 when JTBC declared a default after failing to repay 20.6 billion won in matured securitized loans. Following the default, JoongAng Holdings, Contentree JoongAng, JoongAng P&I, and Megabox JoongAng filed for corporate rehabilitation on June 14, with JTBC submitting its own application the following day. Meanwhile, JoongAng Ilbo has applied for a creditor-led workout program.

The court has already issued property preservation orders and comprehensive stay orders to freeze the assets and claims of the involved entities. The preservation order prevents the debtors from disposing of corporate property or liquidating assets, while the comprehensive stay order blocks creditors from enforcing debt collection, provisional attachments, or injunctions against the companies.

Separately, JTBC filed an application on June 14 to defer the commencement of its rehabilitation proceedings, expressing its intent to pursue an Autonomous Restructuring Support (ARS) program. The ARS framework allows a distressed company and its creditors to voluntarily negotiate debt adjustments while the court postpones its final decision, enabling the official start of rehabilitation to be delayed for up to three months.

                                                                                                       Son Seung-hyun