Background
Our client is a regional housing cooperative developing an apartment project. In 2019 it hired a project management company to recruit members and handle related work, and the management fee was later set at approximately KRW 5.445 billion. Between April 2021 and April 2022, our client paid KRW 1.85 billion of that fee.
Creditors of the management company then began to seize the fee receivable. In February 2024 another creditor obtained a seizure and assignment order (a court order transferring a debtor's receivable directly to its creditor) for up to KRW 4 billion. In August 2024 the counterparty obtained a second assignment order for up to KRW 200 million and sued our client for KRW 200 million plus 12% annual delay damages.
What Was at Stake
An assignment order only takes effect over a receivable that actually exists when the order is served on the third-party debtor. The question was whether any management fee remained owing when the counterparty's order was served in August 2024.
How Changchun Helped
Law Firm Changchun argued on behalf of our client that nothing was left for the counterparty's order to capture, and the court accepted these points:
Paid portion: KRW 1.85 billion of the approximately KRW 5.445 billion fee had been paid and was extinguished in April 2022.
Earlier transfer: The remaining KRW 3.595 billion passed entirely to the earlier creditor when its order was served in February 2024.
Later order void: The counterparty's order therefore attached to a receivable that no longer existed and was void.
Outcome
In February 2026 the first-instance court dismissed the claim in full and ordered the counterparty to bear the litigation costs.
When several creditors seize the same receivable, a clear record of prior payments and the order in which each seizure was served can protect a debtor from paying twice. (Outcomes depend on the facts of each case.)