Background
In February 2026, JTBC (part of the JoongAng Group) issued KRW 93 billion in unsecured corporate bonds (42nd series, rated BBB0). About four months later, in June 2026, it defaulted after failing to repay KRW 20.6 billion in electronic short-term bonds, and filed for rehabilitation proceedings three days after that. As a result, publicly offered bonds totaling KRW 245 billion lost the benefit of time, and individual investors who had bought these bonds and short-term notes suffered large-scale losses. Changchun represents these injured investors.
The Issue — Was the Issuer Already in Capital Impairment Before the Offering?
The central question is whether the issuer knew it was already in substantially complete capital impairment and concealed that fact while selling the bonds. As of the end of 2025, total equity stood at only KRW 19 billion (a capital impairment ratio of roughly 96.7%), and excluding approximately KRW 154.4 billion in hybrid securities that are perpetual in nature, real equity was approximately negative KRW 135.4 billion — that is, impaired. Critically, while the lead underwriter's due diligence report expressly flagged risks including capital impairment, the prospectus stated in substance that "there is no difficulty in repaying principal and interest" — a key circumstance supporting claims of mis-selling and defective disclosure.
How Changchun Helped
Changchun has formed a joint defense team with counsel for Bok-hyun Lee, former Governor of the Financial Supervisory Service, to represent the injured investors.
Urging a regulatory examination — We filed a written opinion with the Financial Supervisory Service calling for an expanded, across-the-board examination of the entire issuance and distribution chain (lead underwriter, distributing securities firms, credit rating agencies, discretionary investment managers and others).
Preserving evidence and consolidating complaints — We requested measures to preserve records against destruction of evidence, and consolidation of the individual complaints that had been filed separately.
Criminal and civil action — We are preparing follow-up action, including criminal complaints for defective disclosure and mis-selling as well as claims for damages.
Some 250 injured investors have filed with the Financial Supervisory Service, with confirmed losses of approximately KRW 32.5 billion; by our own count, roughly 450 individual investors are affected, with investments totaling approximately KRW 76 billion.
Public Interest
Because this matter goes to a core question of the capital markets — how individual investors are to be protected from mis-selling and defective disclosure of corporate bonds — it has drawn intensive coverage from numerous media outlets.
This matter is ongoing, and the procedures and outcome may change. Drawing on our expertise in financial and capital markets disputes, Changchun will see this through so that individual investors can recover the rights they are entitled to. (Outcomes may differ depending on the facts of each matter.)