회사법이론에서 본 LBO거래의 가벌성

Abstract

An LBO is the purchase of a company or division of a company using significant debt, whereby the target company’s cash flows are used to support the loan payments. Debt can be in the form of traditional bank financing, bond offering, seller financing and loans from specialized funds. In relation to LBO transaction, debt holders are concerned about the large amounts of debt that are added to a company’s balance sheet when conducting an LBO. This debt is issued in order to purchase shares in the target company. Bondholders think that the additional debt burden increases the probability of default and can significantly deteriorate a company’s credit ratings. In Korea, however, the LBO transaction could not freely be used because of that the purchaser of target company by means of leveraged buyout is liable for breach of fiduciary duty. Under Korean law, a director breaching his or her fiduciary duty may be subject to both criminal and civil liabilities. In a series of recent rulings, the Supreme Court has held that the following basis exists for holding a purchaser by way of LBO liable for the crime of breach of fiduciary duty. : “Where a purchaser borrows funds form a financial institution for the acquisition of a target company and then procures the target company to provide its assets as security for the purchaser’s repayment obligations under the loan, the target company incurs the risk of lass of its assets if the purchaser does not repay the loan; in such circumstances, if the purchase has provided no consideration to the target company for providing the security, then the purchase or third party can be deemed to have made a financial gain equivalent to the value of the assets provided as security, while causing the target company to suffer an equivalent financial loss. The Korean courts view that even a company with one shareholder is a separate and independent entity from that shareholder, with interest that are not necessarily always in line with those of the single shareholder. This paper especially discuss the legal concepts relating the interest of corporate and financial loss incurred with corporate in the context of LBO transaction. Although the recent rulings of the Korean courts are strictly interpreted, the distinctive test between legal and illegal LBO should be provided more clearly. In countries with advanced capital markets, an LBO I used as a useful means of M&A. It should be allowed after complementing the legal system.