SEOUL, KOREA - A judge at the Incheon District Court said on May 29 that the criminal court has approved a request for forceful collection made by the Prosecutors' Office for assets held by the family of Yoo Byung-eun, the former chairman of Semo Group, the parent company of Chonghaejin Marine that was responsible for the sinking of the Ferry Sewol that killed more than 300 passengers including high school students.

 

The Prosecutors' Office had made the request a day before in order to preserve the assets worth 240 billion won to pay for compensation for the victims and punitive damage payments. There may be more assets hidden under borrowed names, but the prosecutors' office said it took the measure first for assets under the names of his immediate family members. Forceful collection for preservation purposes is equivalent to provisional seizure in the civil law.

 

Earlier, major creditor banks of the affiliate companies under the direct control of Yoo began recalling loans from major Semo affiliates including Chonhaeji, Ahae, and Jongseok Chemical. For example, Korea Development Bank recently notified to Chonhaeji and Ahae that acceleration clauses have been triggered and the bank would soon begin collecting the debt. 

 

The loans to be paid back by Chonhaeji and Ahae to Korea Development Bank are 34.9 billion won and 7.3 billion won, respectively. Once a bank declares an acceleration clause trigger, the information is shared by all other banks, which would force the borrower to pay back all loans outstanding.

 

Once the companies declare bankruptcy, it is highly likely they would end up being liquidated without going through a workout program because more than 70 percent of creditor bank votes would be needed to undergo such a program.