CleanRap product. /CleanRap home page
Clean Ratch, a food packaging company famous for plastic wrap and sanitary gloves, has applied for a court receivership. A week after the management rights dispute lawsuit filed by the founder, the late Chairman Jeon Byeong-soo, and his second son against his eldest son Jeon Ki-young ended in the victory of the eldest son, Clean Lab Corporation, whose second son the CEO applied for corporate rehabilitation procedures.
According to investment banking (IB) industry and legal circles on the 17th, Clean Lab applied for corporate rehabilitation procedures to the Seoul Rehabilitation Court on the 4th. It will soon be decided whether Clean Lab’s corporate rehabilitation process should be initiated through procedures such as questioning the representative. The court, which issued a comprehensive injunction and decision on detention measures on the 9th, will hold an inquiry of the representative on the 22nd.
Not only did it achieve sales of 170 billion won last year alone, but it is also unusual to apply for corporate rehabilitation in a situation where assets exceed liabilities. As of last year, CleanRap’s total assets were 140 billion won and total liabilities were 94 billion. Current assets, which are assets that can be converted into cash in a short period of time, are equivalent to approximately 65 billion won. Cleanlak also said in its financial statements that it “holds sufficient demand deposits and receivables to cover expected operating expenses, including debt service.”
There are voices in the industry who say that the reason for CleanRap’s request for a court receiver was a management rights dispute. When a corporation enters a corporate rehabilitation process, shareholder rights are limited and a court-appointed administrator has the authority to manage and dispose of assets. According to the rehabilitation plan prepared by the administrator, shareholders’ stocks can be reduced or canceled and management rights can be secured by increasing capital to certain related persons. Typically, the manager is the CEO of the company. Currently, the CEO of CleanRap is the second son (17.33%), and the largest shareholder is the eldest son, who holds 76.36% of the shares.
The dispute over Clean Lab’s management rights began with a stock gift agreement stating that 210,000 shares of Clean Lab stock owned by the former chairman would be given to his eldest son. The former chairman claimed that his eldest son had threatened and attacked him and demanded the transfer of shares for the sake of succession of management rights. On the other hand, the eldest son refuted that he received the stocks legally by way of a gift.
The first trial ruled in favor of Chairman Jeon, saying, “The contract in which the CleanRap stocks owned by Chairman Jeon were gifted to Mr. Jeon, the eldest son, cannot be recognized and accordingly, return the stocks to the second son. .” Chairman Jeon won the first trial, and his second son, Mr. Jeon, was appointed CEO of Clean Lab in 2022. However, the verdict of the first trial was overturned in the second trial, and on the 28th of last month , the Supreme Court also held that the judgment of the second case was just. Chairman Jeon Byeong-soo died in 2020 while the lawsuit was pending.
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