차입매수(Leveraged Buyout)와 배임죄

Leveraged Buyout and Breach of Trust

In legal perspective, mergers and acquisitions can be seen as a consolidation of characters. It is a process in which one of the two corporate bodies is absorbed and merged into the other one. In most cases, the corporate body who is acquiring the other usually covers the cost of merger and acquisition. This, on the other hand, puts her in the need of vast amount of financial resource. In order to acquire such resource, the company can use the assets of the company being acquired as collateral for the loans (Leveraged Buyout) allowing the company to takeover another company without committing a lot of capital In Sinhan LBO case, the court assessed the leveraged buyout as the breach of trust and gave a criminal penalty. However, in Hanil LBO case and Onse Communication LBO case, the court did not see the act of leveraged buyout as the breach of trust. The difference between Sinhan LBO case and the other two cases are as follows. In Sinhan LBO case, the company being acquired, S&K World Korea’s assets were used as collateral for the loans before the actual acquisitions took place. However, in the other two cases, there existed a contract between the companies as to provide the assets of the companies being acquired as collateral for the loans but the provision of security did not happen before the actual acquisitions took place. From this, two questions arise. First is how to define the subject of the damage occurred, and second is the standard for assessing the damage. There are three conflicting theories that try to answer these questions and of those three, the ‘company theory’ is the most reasonable answer. By applying this theory, the precedent’s stance can be easily understood. Moreover, it can be questioned whether it is justifiable to see the provision of security as damage. In the capitalist society, the trade of goods occurs through the means of money and this money functions as a unifying measure of value. Consequently, when an asset such as real property is provided as security, the value of that specific asset also decreases by that amount of security. Therefore, it is justifiable to see the provision of security as damage. The precedent refers to this as ‘a risk of property damage’. Furthermore, it can be questioned whether the damage can be acknowledged based on an unfair merger. In the field of accounting, mergers and acquisitions is seen as a purchase. The ｢Corporate Accounting Standards Book(1103rd)｣, lists detailed accounting standards for calculating the acquisition cost and acquisition value during a business merger. According to this standard, the company may be sold at a price that is lower or higher than its actual value but as long as it does not exceed the usual trade custom, it is difficult to see an unfair merger as damage.