1. The Client’s Crisis

The client was a corporation. Before the company was founded, its former representative director had frequently engaged in monetary transactions with a certain relative, and had also provided various economic benefits to that relative through the company. After a new representative director took office and refused to continue providing such benefits, that relative filed a lawsuit, claiming that because the former representative director had borrowed several hundred million won from him on the company’s behalf, the company was obligated to repay it. The company was suddenly in danger of having to bear responsibility for a personal monetary transaction in which it had never been involved.

2. Key Issues

The difficult issues to be resolved in this case were largely threefold. First, because the promissory note submitted by the opposing party listed the company name, it was necessary to clearly determine whether this transaction was a personal transaction by the former representative director or a corporate transaction entered into on behalf of the company. Second, because the opposing party also submitted books and other evidence to argue that the transaction was made in the company’s name, each piece of such evidence had to be impeached for credibility. Third, because the former representative director had provided economic benefits to that relative through the company while in office, those circumstances could be used as grounds to infer the company’s intent to borrow the funds.

3. Strategy

Attorney Ji-sang Yoon, the firm's managing partner, focused on proving that the monetary transactions between the former representative director and the relative were purely private dealings unrelated to the company.

He carefully reviewed the promissory note and ledger submitted by the opposing party and identified signs that the note had been fabricated hastily. He pointed out that the former representative director had merely included the company name to identify himself, and that the absence of the corporate seal showed that the transaction was not based on the corporation’s intent. At the same time, he specifically highlighted contradictions between the transaction details recorded in the ledger and the opposing party’s assertions, thereby undermining the credibility of the evidence as a whole.

4. Outcome and Recovery

The trial court accepted the position of the law firm of existence, finding that the monetary transaction alleged by the opposing party was nothing more than a transaction between individuals, and dismissed in full the claim seeking repayment of several hundred million won in loans against the company. The opposing party appealed, but the claim was also dismissed by the Seoul High Court. A further appeal to the Supreme Court was likewise dismissed, and in May 2024, the Supreme Court also dismissed the appeal, making the victory final and conclusive. The client company was able to completely escape unjust liability arising from the former representative director’s private dealings.

Attorney in charge: Managing Partner Ji-sang Yoon

This case has been partially de-identified within a scope that does not compromise the substance of the case in order to protect confidentiality.