Homeplus's future in doubt as court terminates rehabilitation process

The Seoul Bankruptcy Court terminated Homeplus's corporate rehabilitation proceedings on Friday, concluding that the retailer's restructuring plan is not viable.

Under the plan, Homeplus proposed to restructure its business around 67 core stores to improve profitability. However, it failed to present a concrete plan to secure the minimum 200 billion won ($130 million) needed to carry out the restructuring.

The court had previously extended the deadline for approving the rehabilitation plan from March 4 to May 4, and later extended it again until Friday.

Under the law, a rehabilitation plan must generally be approved within one year after the rehabilitation proceedings begin. However, the deadline may be extended by up to six months in exceptional circumstances. Homeplus entered court-led rehabilitation on March 4 last year, and the court still had the legal option of extending the deadline until September.

However, the court has concluded that another extension would serve no practical purpose and decided to terminate the rehabilitation process.

The decision also lifted a comprehensive court order that blocked creditors from pursuing enforcement actions, provisional seizures and foreclosure proceedings against the company.

BY JUNG SI-NAE [lee.taehee2@joongang.co.kr]