Background
Our client, a financial services company, obtained a judgment in December 2022 ordering an investment company to repay approximately KRW 385.05 million plus interest. The judgment became final, but the company did not pay.
The debtor company's ledgers showed that its CEO had drawn provisional advances from the company, with a balance in the KRW 400 million range every year. Our client obtained a court order seizing approximately KRW 200 million of the company's loan claim against the CEO and authorizing our client to collect it directly. It then sued the CEO for KRW 30.1 million as a partial claim.
What Was at Stake
The CEO argued that he had never actually borrowed from the company. In his account, the entries merely recorded how a KRW 500 million loan, used to fund the company's capital at incorporation, had been repaid.
How Changchun Helped
Changchun relied on the company's account ledgers to establish the loan claim, and the court accepted the plaintiff's position.
The CEO kept the books himself. Because the CEO prepared and managed the ledgers on the company's behalf, the court held that the company held the loan claim recorded there.
A sham capital contribution changes nothing. Even if the capital had been paid in with borrowed money and withdrawn right away, the company could still demand that the shareholder reimburse the capital it had effectively paid on his behalf.
Outcome
In September 2025, the first-instance court ordered the CEO to pay KRW 30.1 million plus 12% annual delay interest and to bear the litigation costs.
Even when a debtor company appears to have no assets, advances recorded on its books as owed by its CEO can be a collectible asset. (Outcomes depend on the facts of each case.)