Questioning Begins for JoongAng Group Executives Over Liquidity Problems... "We Will Follow the Court's Decision" [Comprehensive]

[Financial News] Court proceedings for JoongAng Group affiliates facing liquidity problems have officially begun. Hong Jeong-do, vice chairman of JoongAng Group, said little, stating that he would follow the court's decision.
The Rehabilitation Division 2 of the Seoul Bankruptcy Court, presided over by Judge Jung Joon-young, is holding hearings on the representatives of JTBC, Megabox Joongang, and ContentreeJoongAng on the 23rd, following earlier hearings for JoongAng Holdings and Central P&I. Hong Jeong-do and CEO Kim Jin-gyu entered the courtroom around 9:54 a.m. in their capacity as representatives of Central P&I and JoongAng Holdings, avoiding reporters.
They reportedly gave the bench a detailed explanation of the companies' current assets and liabilities, while also stressing how they plan to settle debts going forward. They also said they would work to minimize losses over concerns that broadcasting rights contracts for the Olympic Games and the FIFA World Cup could be automatically terminated in the event of liquidation or bankruptcy. However, there was no mention of any personal contributions from the group owner's family.
After the hearing, Hong was asked by reporters whether he saw a possibility of liquidation rather than rehabilitation. He replied, "I will faithfully follow the court's judgment." He then left without answering further questions, including whether he had anything to say to creditors of the affiliates or what issues he had explained to the court.
Before the hearing, JTBC CEO Jeon Jin-bae also met reporters and briefly said he would explain JTBC's management situation in detail to the court in connection with the rehabilitation proceedings.
The representatives of each company plan to persuade the court by presenting the specific scale of their debts along with debt restructuring measures. The court is expected to review their explanations before deciding whether to begin rehabilitation proceedings. Under the Debtor Rehabilitation and Bankruptcy Act, the court must decide whether to open proceedings within one month of the debtor's application.
Earlier, JTBC declared default on the 12th after failing to repay 20.6 billion won in securitized borrowings at maturity. Two days later, on the 14th, JoongAng Holdings, ContentreeJoongAng, Central P&I, and Megabox Joongang filed for rehabilitation proceedings. JTBC filed an additional rehabilitation petition the following day.
The court has already issued a protective order and a comprehensive stay order freezing the assets and claims of the companies involved.
A protective order prevents the company from disposing of assets and repaying specific creditors in a preferential manner. A comprehensive stay order, by contrast, freezes claims so creditors cannot secure the company's key assets through compulsory execution, provisional seizure, or auction before rehabilitation proceedings begin. Domestic credit rating agencies then downgraded JTBC's credit ratings immediately after the default declaration.
On the 14th, JTBC submitted a request to postpone the start of rehabilitation proceedings and expressed its wish to enter the Autonomous Restructuring Support (ARS) program. ARS is a system in which the court suspends the compulsory commencement of rehabilitation proceedings and supports companies and creditors in negotiating restructuring voluntarily. If the court approves the ARS program, the start of rehabilitation proceedings can be delayed for up to three months. The postponement period can also be extended further if negotiations make progress.
[email protected] Reporter Jeong Kyung-soo Reporter