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Balaan files for corporate rehabilitation after failing to pay sellers for week

Published: 31 Mar. 2025, 13:56

YOON SO-YEON
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Balaan English website [SCREEN CAPTURE]

The embattled luxury retail platform Balaan has filed for corporate rehabilitation after accumulating up to 13 billion won ($8.9 million) in debt to its sellers and will “swiftly” seek a buyer.

Balaan suspended all new purchases on Friday afternoon, having reportedly failed to pay out its sellers for the past week. The rehabilitation procedure, which is analogous to debt restructuring and the United States' Chapter 11, will allow the company to “safely pay the partners' bonds and reevaluate the sustainability of the Balaan platform,” Balaan CEO Choi Hyung-rok said Monday.

Customers are unable to purchase any products listed on the platform as of press time, with all payment options, including credit card and Balaan Pay, the platform’s proprietary payment service, nonoperational. Balaan's payment page reads that “all payment options are unavailable” and that it was “working to resume services as soon as possible,” without providing further explanation or a recovery timeline.

“We raised a portion of the investment that we had planned, but it took longer than expected to get an additional amount, which led to a short-term liquidity crunch,” Choi said.

“There has been no damage done to the consumers and the amount of unpaid digital bonds are smaller than Balaan's [average] monthly transaction volume. Starting this month, we have been cutting down on various expenses, such as coupons, to turn a profit.”

Balaan will accelerate the sales of its shares as it pursues an offer, according to Choi. He will seek a mergers and acquisitions adviser within this week and later search for a buyer.

“We aim to attract external investors and significantly improve our cash flow to rapidly enhance the stability and growth potential of our business before the approval of the rehabilitation plan,” Choi said. “We hope to pay our partners' bonds with the new investor.”

The filing was submitted to the Seoul Bankruptcy Court in southern Seoul.

BY YOON SO-YEON [[email protected]]