MBK Partners and Meritz Financial Group are locked in a dispute over Homeplus's rehabilitation procedure collapse, with conflicting claims on MBK Chairman Kim Byung-joo's personal guarantee status and asset capacity. The court has set a deadline of under 2 weeks for resolution. The dispute centers on whether Kim committed to a personal guarantee and whether MBK retains financial capacity to support Homeplus after claiming 4,000 billion won in prior support.
MBK and Meritz Dispute Personal Guarantee Terms
MBK Partners and Chairman Kim Byung-joo expressed willingness to provide personal joint guarantees, as stated in the Seoul Rehabilitation Court decision. The guarantee was conditional on Meritz providing a 2,000 billion won loan, with MBK and Kim offering to guarantee 1,000 billion won of that amount. Meritz did not agree to provide the 2,000 billion won loan. A Meritz official stated that guarantees are provided to creditors and that expressing intent in a court opinion does not constitute an executed guarantee.
Meritz's position requires MBK or Kim to provide 1,000 billion won independently, with Kim providing a personal guarantee on the remaining 1,000 billion won, which Meritz would then lend. MBK countered that Meritz is unwilling to contribute any funds and that creditors must make concessions in rehabilitation procedures to avoid bankruptcy. Meritz provided 1.3 trillion won in refinancing to Homeplus in May 2024 and has not provided new funds since. Meritz has recovered 256.1 billion won in principal and interest and fees totaling 256.1 billion won since the refinancing. Meritz holds collateral on 64 Homeplus stores valued at 1.56 trillion won. MBK claims that in liquidation, Meritz would exercise collateral rights to secure 500 billion won in profit beyond principal. Meritz countered that this calculation treats unrealized valuation as cash profit and that collateral value could fall below principal in liquidation.
Parties Clash Over Kim Byung-joo Asset Capacity Claims
In March, Kim Byung-joo and Vice Chairman Kim Gwang-il raised 1,000 billion won in debtor-in-possession (DIP) funding using collateral including Kim's Hannam-dong residence. In April, Kim provided a personal guarantee on Curious Partners' 600 billion won DIP funding and waived recourse rights, separately contributing 400 billion won in personal funds. MBK claims total support from MBK and Kim since rehabilitation commencement reaches 4,000 billion won. Curious Partners declared early termination of debt (EOD) on the 600 billion won provided to Homeplus on the 3rd, demanding immediate repayment and initiating cash repayment requests to guarantors Kim Byung-joo and Kim Gwang-il. MBK states additional support capacity is exhausted.
Meritz and creditor investors counter that 2,000 billion won of the 4,000 billion won support total consists of payment guarantees on existing borrowing interest, and that the 1,600 billion won DIP funding constitutes guarantees rather than cash, leaving actual cash contribution at 400 billion won. Meritz cites Kim's estimated personal assets at 14 to 15 trillion won (Forbes estimate: 14.6 trillion won), arguing that 2,000 billion won represents 1-2% of this total and that the controlling shareholder should contribute personal assets. Homeplus's legal controlling shareholder is a special purpose company (SPC) established by MBK, which appears on the shareholder registry. Kim is the de facto controller, but legal responsibility attribution remains unclear.
FAQ
What is the dispute between MBK Partners and Meritz Financial Group over Homeplus?
MBK Partners and Meritz Financial Group are disputing MBK Chairman Kim Byung-joo's personal guarantee status and MBK's financial capacity to support Homeplus. MBK claims Kim expressed willingness to guarantee 1,000 billion won conditional on Meritz providing a 2,000 billion won loan, while Meritz states no executed guarantee exists and demands MBK provide 1,000 billion won independently.
How much support has MBK Partners provided to Homeplus?
MBK Partners claims total support from MBK and Chairman Kim Byung-joo since rehabilitation commencement reaches 4,000 billion won, including DIP funding and personal guarantees. Meritz and creditor investors counter that actual cash contribution totals 400 billion won in personal funds, with the remainder consisting of payment guarantees and non-cash DIP guarantees.
What action did Curious Partners take regarding Homeplus funding?
Curious Partners declared early termination of debt (EOD) on 600 billion won in DIP funding provided to Homeplus on the 3rd, demanding immediate repayment and initiating cash repayment requests to guarantors Kim Byung-joo and Vice Chairman Kim Gwang-il.
