Attorney Lee Bong-Sun has been reappointed as the member of the Land Appraisal Review and Verification Committee of the Korea Real Estate Board. Mr. Lee has been serving as the legal counsel of the Korea Real Estate Board since February 2021.

On August 9, 2024, Attorney Baek Kwang-Hyeon gave a lecture on "Recent Trends of Franchise Business and Checklist for Prevention of Franchise Business Disputes" for the 72nd Franchise Business Expo hosted by World Expo Co., Ltd. at COEX, located in Gangnam-gu, Seoul.   During the lecture, Mr. Baek explained of the recent trends in franchise business as well as actual franchise business dispute cases and matters to note before starting franchise business.   ㅇ Related News Article: Customized seminar for franchise startups scheduled to be held from 8th (Thursday) at COEX – Shina Ilbo (shinailbo.co.kr)

From August 9, 2024, Attorney Baek Kwang-Hyeon will be joining "The Moneyist" of Hankyung.com as one of their columnists. The Moneyist is ran by Hankyung.com, and articles are contributed by experts in various areas, including personal finance, life, culture, etc. and internet users are invited to share their comments. It is known to be one of the best places in Korea for multi-way communication. Mr. Baek will contribute his column titled, “Baek Kwang-Hyeon’s Fair Play” once every two weeks, dealing with fair trade-related topics. These articles are expected to convey both expertise and interest to the readers.   ㅇ Related Link: Baek Kwang-Hyeon | The Korea Economic Daily (hankyung.com)

Attorney Jung Young-Hun is scheduled to give a lecture on "Copyright Issues in the Age of AI" at a seminar to be hosted by the Korea Animation Industry Association (KAIA) on August 29, 2024.

Attorney Cho Woong-Kyu gave a presentation on “Legal Restrictions on and Improvement Measures for Family Business Succession” at the Expert Advisory Council Meeting on Promotion of Mid and Small-Sized Business Succession, hosted by the Korea Small Business Institute (KOSI) on August 8, 2024.

Attorney Cho Woong-Kyu has been appointed as a standing director of the Korea Economic Law Association.

1. Case Overview a. Party Represented by Barun Law We represented the plaintiff who was an investor investing approximately KRW 2.5 billion in a developer of a real estate development project. The defendant was a newly established company created by the shareholders of the original developer, which had transferred the real estate development rights to the defendant. b. Background of the Case The plaintiff invested KRW 2.5 billion in a real estate development company, and the entire investment was used to purchase land for the project. However, the shareholders of the original development company secretly established the defendant company with a similar name, transferring the sole asset of the original company—the development rights—to the new company. This was attempted to leave the original company insolvent and sever the plaintiff’s claims from the development rights, effectively rendering the plaintiff's claims worthless while allowing the shareholders to monopolize the profits. Upon completion of the real estate development, the plaintiff sought the return of the investment and profits from the defendant, believing the defendant had assumed the original company’s debts. However, the defendant denied having assumed any liability towards the plaintiff and claimed that the plaintiff's claims were only against the now-insolvent original company. As a result, the plaintiff filed a lawsuit against the defendant, seeking the return of the investment on grounds of disregarding corporate personality and fraudulent conveyance. However, the lower court dismissed the plaintiff’s claims, ruling that there was no intent to evade debts or engage in fraudulent activities. c. Litigation Details In the appeal, newly being engaged by the plaintiff, we maintained the original arguments of disregarding corporate personality and fraudulent conveyance while adding a new cause of action based on Article 42 of the Commercial Act, which holds the transferee responsible for continuing the business under the same trade name. We meticulously analyzed the objective facts, demonstrating that the original company had established the defendant to monopolize the development profits and evade debts, thereby establishing the unfairness of the situation through logic and legal arguments. In particular, we argued that the original company and the newly established defendant were essentially the same entity, functioning as a special-purpose company (SPC) created by the same shareholders. We clarified that the original company’s shareholders had established the defendant specifically to evade debts and that the original company had become a mere shell used as a tool by the defendant until the successful completion of the real estate development, after which it was dissolved. Our clear articulation of the requirements for disregarding corporate personality and the relevant facts, particularly considering the characteristics of real estate development projects and project financing, led to a successful outcome in the appellate court. The Seoul High Court reversed the lower court’s decision, ruling that the transfer of development rights to the defendant was intended to evade debts, allowing the defendant to be held liable (Seoul High Court Decision 2023Na2033734, dated April 3, 2024). The Supreme Court later affirmed this ruling without further proceedings (Supreme Court Decision 2024Da239548, dated July 11, 2024). 2. Our Argument and Role We thoroughly analyzed and organized the complex facts discussed in the first trial, applying the theory of disregarding corporate personality to the special-purpose company (SPC) involved in the real estate development project. This strategy led to a complete reversal of the first-instance ruling, resulting in a decision fully in favor of the plaintiff, allowing for the recovery of the KRW 2.5 billion investment from the defendant. 3. Significance of the Ruling The doctrine of disregarding corporate personality, which denies the legal personality of a corporation to hold another entity liable, is a highly exceptional legal principle. This ruling is significant as it clarifies the circumstances and requirements under which this doctrine may apply. Moreover, the ruling sets a precedent that the doctrine can apply to special-purpose companies (SPCs) established to mitigate risks in real estate development projects. It highlights the importance of thoroughly analyzing and clearly severing any liabilities between the original development company and the SPC to avoid the application of this doctrine in future real estate development projects financed through project financing. □ Attorneys in charge: Ko Young-Han, Kwon Oh-Jun and Kwak Hee-Jae

We (specifically, attorneys Choi Jin-Sook, Choi Jae-Woong, Kim So-Youn, Song Ye-Na and Lee Seong-Jun) successfully completed the advisory for the sale of special bonds worth approximately KRW 522.6 billion for Woori Bank. We prepared and reviewed the Loan Sale and Purchase Agreement (LSPA) and the transfer and acquisition contracts for the sale of secured and unsecured bonds, with a total bond amount of approximately KRW 522.6 billion (based on bond principal) for 6,473 borrowers out of Woori Bank's non-performing loans (NPLs). In addition, we reviewed the relevant regulations under the Loan Business Act, Personal Debtor Protection Act, Asset-Backed Securitization Act, and Debt Collection Act, providing advisory services on legal issues arising at each stage of the bond sale. The sale of bonds by financial institutions, unlike general bond transfers under civil law, must comply with the procedures and methods set forth in the debt collection and loan sale guidelines under the guidance of the Financial Services Commission (FSC). It is also necessary to examine whether the buyer, target bonds, and resale are restricted under the FSC’s agreements with banks, savings banks, etc., such as the Individual Delinquent Debt Purchase Fund Agreement and the Restart Fund Support Agreement. We carefully reviewed the FSC’s press releases, sale guidelines, etc., and confirmed with relevant institutions to ensure that the transaction could proceed within the scope of the FSC’s guidance and agreements. Amidst the prolonged economic downturn, where non-performing loans (NPLs) at financial institutions are increasing, it is expected that banks will actively sort and sell NPLs under the asset soundness management policy. We, in line with the expansion of the NPL sale market, is actively participating as a legal advisor in NPL sale projects of the five major commercial banks and is providing top-tier legal services based on professional and practical expertise in NPL sales. □ Attorneys in charge: Choi Jin-Sook, Choi Jae-Woong, Kim So-Youn, Song Ye-Na and Lee Seong-Jun

1. Case Overview a. Party Represented by Barun Law We represented the plaintiff ("Mr. A"), who applied for a road connection permit for a planned construction site to build five units of row houses. b. Background of the Case In October 2018, Mr. A first applied for a road connection permit to the competent Regional Land Management Office (who is the defendant in this case), but the application was rejected because the site was within a prohibited road connection area. Mr. A also lost a prior administrative lawsuit challenging this decision. Subsequently, Mr. A changed the location of the application site to avoid being within a prohibited area and reduced the road occupation area, then re-applied for the road connection permit in April 2020. However, the Regional Land Management Office refused to accept the application for the changed location as well, stating that the new location still fell under the restrictions of Article 7 of the Road Connection Rules. This article pertains to sections where bus stops, side roads, or other community convenience facilities are installed and cannot be relocated, or where relocating them could pose a risk to pedestrian safety. c. Litigation Details The first instance court ruled that the road structure regulations explanation issued by the Ministry of Land, Infrastructure, and Transport was merely an administrative rule and did not have binding effect on the public or the court. The court also stated that the technical judgment of the administrative authority regarding the scope of the “bus stop section” under Article 7 of the Road Connection Rules should be respected to the maximum extent. Although there was an expert assessment indicating that the additional traffic generated would not hinder traffic safety, the first instance court ruled that it was difficult to consider the traffic volume near the application site as low, and it could not exclude the possibility that vehicles exiting the site might attempt illegal U-turns. 2. Judgment Seoul High Court (Chuncheon) Decision 2023Nu431, dated July 17, 2024 3. Grounds for Judgment The appellate court acknowledged that while the standards for the “bus stop section” stated in the road structure regulations explanation are administrative rules, the standards presented in the explanation issued by the Ministry of Land, Infrastructure, and Transport, which is the overseeing department for roads, should be respected unless there are special circumstances. Accordingly, applying the road structure regulations explanation to the current status of the application site, it was determined that the site does not fall within the bus stop section. The appellate court also found that even if the road is connected to the application site, it would primarily serve the residents of the five-unit row houses, so it would not significantly increase the possibility of traffic accidents. In addition, if the road is not connected, the application site would become a landlocked area with no access to a public road, which would impose excessive disadvantages. The court also noted that the curbstone on the site had already been removed, effectively allowing vehicles to use it as a road, and therefore, it overturned the first instance judgment and canceled the Regional Land Management Office's refusal decision. 4. Our Arguments and Role We emphasized that while administrative rules do not have binding external force, when the matter falls within the discretionary authority of the administrative body that established the rules, it is desirable for the court to respect them as much as possible (Supreme Court Decision 2017Du43319, dated January 10, 2019). We also stressed that the contents of the road structure regulations explanation issued by the Ministry of Land, Infrastructure, and Transport should be respected in this case. Further, we submitted numerous on-site videos of the area near the application site to reinforce the existing expert assessment that road connection would not pose any danger to traffic near the site. We also argued that the refusal to permit the road connection essentially had the effect of blocking future construction possibilities on the application site, thus being detrimental to the client. 5. Significance of the Judgment This case is significant as it fully considers the function of administrative rules in ensuring predictability and legal stability for interested parties and meticulously examines the traffic situation near the application site as well as the disadvantages imposed on the plaintiff by the refusal decision. □ Attorneys in charge: Park Sung-Ho, Min Kyung-Chan and Lee Ji-Min

1. Case Overview a. Background of the Case At the time of the incident, the defendant was 14 years old and the victim was 12 years old. The defendant and the victim were seniors and juniors at school. The victim, through her legal representative, accused the defendant of forcibly molesting her, raping her while she was incapable of resisting, and threatening her to take naked photos of herself and send them to SNS messengers. The prosecutor found the allegations credible and charged the defendant with violation of the Special Act on the Punishment of Sexual Offenses (rape of a minor under the age of 1), violation of the Special Act on the Punishment of Sexual Offenses (forcible molestation of a minor under the age of 13), and violation of the Act on the Sexual Protection of Children and Adolescents (production and distribution of sexually exploitative material). b. Progress of the Litigation We represented the defendant from the first trial. The court of first instance ruled that, with respect to the violation of the Special Act on the Punishment of Sexual Offenses (rape of a minor under the age of 13) and the violation of the Special Act on the Punishment of Sexual Offenses (forcible molestation of a minor under the age of 13), it could not be proved beyond reasonable doubt that the defendant committed adultery with the victim by exerting tangible force to suppress the victim’s rebellion or to make it significantly difficult for the victim to rebel, and it is difficult to prove that the defendant forcibly molested the victim against her will by means of intimidation, and therefore, while finding the defendant not guilty of the respective charges above, the court ex officio found that the facts of the case charged included the offenses of constructive rape and constructive forcible molestation of a minor. Consequently, the court found the defendant guilty of the crimes of constructive rape of a minor, constructive forcible molestation of a minor, and violation of the Act on the Sexual Protection of Children and Adolescents (production and distribution), and sentenced him to one year and six months in prison and three years of probation. The prosecutor and the defendant both appealed. 2. Judgment Seoul High Court Decision 2024No654, dated July 18, 2024 3. Grounds for Judgment 1) Regarding forcible molestation and rape of a minor under the age of 13, the appeal court rejected the prosecutor’s arguments in this regard, finding that the trial court’s decision to acquit the defendant of each of these counts was justified, and that it was insufficient to prove beyond reasonable doubt that the defendant knew that the victim was under the age of 13 on the date of each of these counts, stating that the defendant, who was 14 years old, could not be found guilty of the offense of forcible rape or forcible molestation of a minor under the age of 13 by merely concluding that the defendant knew that the victim was 12 years old on each of the above dates, which had not passed his birthday, the court accepted the defendant’s appeal, set aside the first trial judgment, and acquitted him of each of these counts. 2) Regarding the production and attempted production of sexual exploitation work of children and adolescents, the appeal court rejected the defendant’s argument that the first instance court’s decision to find him guilty of each of these counts was justified, but decided to remand the case to the juvenile department in accordance with Article 50 of the Juvenile Act, as it is desirable to correct his behavior through appropriate education and edification courses that take into account the characteristics of juveniles so that he can grow into a healthy member of society rather than imposing criminal punishment on him. 4. Our Arguments and Role From the first trial, we actively collected evidence on the movement of the defendant and the victim on the day of the incident, the location of the incident, etc. by visiting the scene where the incident occurred, and impeached the credibility of the victim’s statement by carefully analyzing the SNS conversations between the defendant and the victim before and after the incident, and argued that there was no evidence that the defendant forcibly molested the victim or raped her by taking advantage of her irresistible state. On appeal, the court noted that the so-called 'counting age', which is the age at which a child turns one year old immediately after birth and increases by one year every year, was used instead of the "full age" at the time of the incident, and that the defendant had recognized the victim as 13 years old based on the "counting age" in light of their social media conversations, Even if the acts of molestation or adultery are admitted, the defendant did not intend to molest or commit adultery with a victim under the age of 13, so the crimes of forcible molestation of a minor and forcible rape of a minor under Article 305(1) of the Criminal Code could not be established. The defendant also preliminarily argued that the sentence of the first trial court, which was one year and six months’ imprisonment and three years’ probation, was excessively severe and unjustified in light of the fact that the defendant was a 14-year-old boy who had not yet established his sexual ideas or values, had no history of criminal punishment or disciplinary sanctions, and had no problems in school. We requested the court for the defendant that the maximum leniency allowed by law be granted so that he could grow into a proper adult with the discipline of his parents and the education of his school and contribute to our society. □ Attorneys in charge: Park Sung-Ho and Lee Chan-Woong

1. Case Overview a. Party Represented by Barun Law The party represented by Barun was a public corporation, K (which is the respondent in this case, "K Corporation"), established under relevant laws to support and promote activities related to intangible cultural heritage, including performances and exhibitions. b. Background of the Case and Litigation The claimant filed a petition with the Seoul Regional Labor Relations Commission, arguing that "the transfer order in this case was issued solely because of my gender, without any recognized business necessity. The transfer caused changes in working conditions, such as relocation of the workplace and weekend work for at least one day, which resulted in personal disadvantages. Furthermore, there was no sincere consultation, making this an unfair personnel order" 2. Judgment On June 4, 2024, the Seoul Regional Labor Relations Commission ruled that “the transfer order in this case was recognized as necessary for business, the alleged disadvantages to the employee’s life were within the range that the employee should generally tolerate, and the employer consulted with the employee. Therefore, it is a legitimate personnel order,” dismissing the employee’s petition for relief. (This decision has finally confirmed). 3. Our Arguments and Role Based on the extensive experience in winning numerous cases where the legality of an employer’s exercise of personnel rights was contested, we, representing K Corporaiton, actively argued and demonstrated that: the need for the transfer in this case was recognized as the corporation required additional personnel to handle the OOO ceremonial duties; the decision to transfer was made after comprehensively considering the employee’s job skills and the appropriate allocation of labor; although the transfer involved changes in the workplace and weekend work, there was no change in salary, and the employee’s commute distance was even shortened, making the disadvantages not beyond what the employee should normally tolerate; and before the transfer decision, a interview on preferred duties and a consultation meeting were conducted, demonstrating that the process included adequate consultation. We effectively argued and proved that the transfer was a legitimate personnel order. 4. Significance of the Judgment The most critical factor for an employer to consider when exercising personnel authority is the business necessity, which should be approached from the perspective of rational organization and operation by the employer. Additionally, when selecting the employee subject to the personnel change, the employer must ensure rationality, typically evaluated based on the replaceability of other employees. Moreover, to ensure procedural fairness, the employer must thoroughly consider the personal circumstances of the employee to alleviate any disadvantages in their life. The employer should also provide a sufficient explanation to the employee, creating an opportunity for the employee to accept the decision or for the employee’s requests to be reflected. This judgment, confirming the legality or limits of an employer’s personnel order (or transfer, reassignment) through a thorough review based on legal principles, can serve as an important precedent in other cases. □ Attorneys in charge: Moon Ki-Joo and Jeong I-Yeong

1. Case Overview The Central Regional Tax Office executed a search and seizure warrant against a manpower supply company, suspecting the issuance and receipt of false tax invoices, tax evasion, etc. The investigation by the police and prosecution continued for four years after the company representative was reported. During the investigation, the prosecution additionally recognized embezzlement, which was not included in the initial report, and conducted a high-intensity investigation by repeatedly summoning the company representatives and employees. Subsequently, the prosecution requested arrest warrants for the two company representatives, citing reasons such as the severity of the crime, the likelihood of denying the charges, or the possibility of denial, and lack of remorse. 2. Key Issues In the manufacturing, production, and logistics sectors, there is high demand for manpower, but the supply is insufficient. The wage level set by the original contractor is low, and workers have low loyalty, making it impossible for the manpower supply company to independently recruit manpower at a level corresponding to the original contractor’s demand. For these reasons, it is common for several manpower supply companies to cooperate in recruiting manpower or collaborate through introductions, recommendations, and mediations among the companies. Given that the company was established to actually carry out manpower supply operations, and transactions of introductions, recommendations, and mediations existed among companies, it is difficult to conclusively determine that all the tax invoices exchanged in the process were false. While the judgment on this issue was pending, the prosecution newly recognized embezzlement by the two company representatives and requested arrest warrants during the four years of ongoing investigation. 3. Our Role and Implications We sufficiently clarified the following circumstances during the substantive examination of the arrest warrants, and the court took these into account and dismissed all requests for arrest warrants:  (i) There was no concern about destruction of evidence or flight, as shown by the sincere cooperation during the four-year investigation, and there is a legal aspect of dispute, but there is no dispute regarding the facts;  (ii) Requests for information disclosure (record inspection), and the appointment of legal counsel are constitutional and legal rights, and these cannot be considered as grounds for possible evidence destruction; and  (iii) There are some factual errors in the arrest warrant application, and there are legally significant issues in the initial report, so it is necessary to guarantee the right to defense. We explained the background of frequent tax cases in the manpower supply industry and the circumstances of the companies, persuading that this falls within the legitimate scope of the right to defense. The court accepted this, dismissing all arrest warrants, which will serve as important reference for similar cases in the related industry in the future. □ Attorneys in charge: Kang Tae-Hun, Chung Yang-Hun, Kim Yong-Hyun

The column, "Should I report any public official who gives lectures outside national or local government offices if such lectures exceed three times per month?" written by Attorney Kim Chu has been published in The Segye Ilbo.

The column, "The content industry should actively pursue ESG management" written by Attorney Park Sang-Oh has been published in Metro Seoul.

The column, "Hopes and concerns for the next Chief Justice of the Supreme Court" written by Attorney Chung In-Jin has been published in The Kyunghyang Shinmun.

The column, "Whether a fiduciary duty to a financial institution can be recognized under a project finance loan agreement" written by Attorney Woo Hyun-Soo has been published in DNews.

The column, "No-fault reimbursements should be considered to resolve the issue involving avoidance of essential medical case" written by Attorney Kim Kyung-Soo has been published in The Segye Ilbo.

The column, "Can a store’s interior and exterior design function as a trademark?" written by Attorney Jung Young-Hun has been published in Food Journal.