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Asiana Airlines Headquarters Building. (Photo = Asiana Airlines) |
[Alpha Biz= Kim Jisun] Asiana Airlines has won its final lawsuit against HDC Hyundai Development Company (HDC) over the failed merger and acquisition (M&A) deal. The Supreme Court ruled that the 250 billion KRW deposit paid by HDC and Mirae Asset Securities would be retained by Asiana Airlines and Kumho Engineering & Construction.
On the 13th, the First Civil Division of the Supreme Court (Presiding Justice Shin Sook-hee) upheld the lower court's ruling in favor of Asiana Airlines and Kumho Engineering & Construction in their legal battle against HDC and Mirae Asset over the cancellation of a pledge and damages. The court dismissed the appeal, stating that there were no errors in the interpretation of contract termination and damages liability.
The core issue of the case was determining who was responsible for the failed acquisition—Asiana Airlines (the seller) or HDC (the buyer). In 2019, HDC and Mirae Asset agreed to acquire Asiana Airlines for 2.5 trillion KRW, paying a 250 billion KRW deposit (217.7 billion KRW to Asiana and 32.3 billion KRW to Kumho Engineering & Construction).
However, as the aviation industry suffered due to the COVID-19 pandemic the following year, HDC requested a re-evaluation of Asiana Airlines before proceeding with the acquisition. The creditors of Asiana, including the Korea Development Bank, rejected this request, questioning HDC’s commitment to the deal. Despite efforts to renegotiate the acquisition terms, HDC remained firm on its demand for a re-evaluation, ultimately leading to the deal's collapse in September 2020.
Asiana Airlines and Kumho Engineering & Construction subsequently filed a lawsuit, arguing that the 250 billion KRW deposit should be forfeited as a penalty for the failed deal. The lower courts ruled in favor of Asiana, determining that HDC bore responsibility for the collapse of the acquisition and was not entitled to reclaim the deposit. The appellate court upheld this decision in March last year, emphasizing that HDC sought to renegotiate the terms only after facing unexpected financial difficulties due to the pandemic.
With the Supreme Court's ruling, Asiana Airlines has definitively won the case, securing the 250 billion KRW deposit.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
