Court closes Myongji Foundation rehabilitation, debt repayment ensues

K-campus

Published: 08 Jan. 2024, 18:29

Court closes Myongji Foundation rehabilitation, debt repayment ensues

Myongji University's student council members protest infront of the Myongji Education Foundation building in 2019, requesting the foundation announce measures to protect students if it goes bankrupt. However, the Seoul Bankruptcy Court ended the foundation's rehabilitation process, as it can carry out its plans to pay off debt. [PARK HYE-RI]

The Myongji Education Foundation, which is behind institutions such as Myongji University, ended its court-supervised rehabilitation process and will continue to pay off its debt.

Seoul Bankruptcy Court decided to close Myongji Education Foundation's corporate rehabilitation procedures in a ruling on Friday, stating that the foundation began its plans to repay debt and that there are no obstacles that will hinder it from continuing.

The decision comes a year and eight months after the foundation applied for corporate rehabilitation in April 2022.

The foundation's plan includes selling unused land in Myongji University's social science campus in Seodaemun District, western Seoul, along with other land and assets that Myongji Education Foundation owns.

As the foundation finishes its rehabilitation process and moves away from bankruptcy, students at Myongji Education Foundation-operated schools have less to worry about.

According to the Private School Act, if an educational foundation is dissolved due to bankruptcy, its affiliated schools are shut down. Schools are stopped from admitting new students, with enrolled students transferred to other schools.

Myongji Education Foundation runs the likes of Myongji University, Myongji College, Myongji Elementary, Middle and Highschool and Myongji Kindergarten.

Myongji Educational Foundation's financial struggles dates back to 2004.

The foundation planned to build a retirement community in the Myongji University campus in Yongin, Gyeonggi, with plans to build a golf course also advertised. Although a retirement complex was built, the foundation could not build a golf course as it was not able to obtain necessary construction permits from the city.

In 2013, the court ordered the foundation to compensate investors 19.2 billion won ($14.57 million) for false advertisement, which the foundation failed to pay.

Seoul Guarantee Insurance, the largest creditor of Myongji Educational Foundation, filed for the foundation's court receivership in 2020, as bankruptcy could affect students. Initially, the court did not approve the rehabilitation plan, deeming it unfeasible. However, the foundation refiled for court receivership, officially initiating the rehabilitation process in May 2022.

BY LEE TAE-HEE [lee.taehee2@joongang.co.kr]