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Choi Hyung-rok, CEO of BALAAN, appeared at the Seoul Bankruptcy Court in Seocho-gu on April 3 to attend a court hearing regarding the company’s application for corporate rehabilitation. (Photo: Yonhap News) |
[Alpha Biz= Kim Jisun] SEOUL, April 4 — The Seoul Bankruptcy Court has officially approved the commencement of rehabilitation procedures for BALAAN, a South Korean luxury e-commerce platform, following the company’s voluntary court application due to liquidity issues.
The 15th Division of the Seoul Bankruptcy Court, presided over by Judge Kim Yoon-sun, stated on Thursday that BALAAN had faced mounting operating losses stemming from heavy marketing and fixed costs during its early growth stage. Additionally, industry-wide trust has been eroded by the fallout from peers such as Tmon and Wemakeprice, leading to a sharp decline in sales volume and revenue.
The court also noted that BALAAN had failed to secure the scale of investment it had initially anticipated to resolve its liquidity crisis.
BALAAN applied for rehabilitation on March 31, citing delayed funding and liquidity challenges. The company is currently pursuing an M&A prior to court approval of its rehabilitation plan, aiming to secure an early buyer to repay outstanding debts to partner vendors.
Notably, the court has not appointed an external administrator, allowing BALAAN’s CEO Choi Hyung-rok and existing executives to continue managing the company during the rehabilitation process. However, the court warned that if any illegal activities by management are discovered, a new administrator may be appointed.
Under the court’s timeline, BALAAN must submit its list of creditors by April 18, while creditors not listed must file claims by May 9. Claims will be reviewed until May 23.
Taesung Accounting Corporation has been appointed as the examiner and will assess the company’s assets and compare its liquidation value versus its going-concern value. The evaluation report is due by June 5, and BALAAN is required to submit its rehabilitation plan by June 27. The court will then determine whether to approve the plan or proceed with liquidation if rehabilitation is deemed unfeasible.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
