Homeplus heads toward liquidation as court pulls plug on rehabilitation

Homeplus, Korea’s second-largest hypermarket chain, is heading toward liquidation after a court terminated its rehabilitation proceedings, ruling that the cash-strapped retailer had no viable path to carrying out its turnaround plan, according to industry officials, Friday. The Seoul Bankruptcy Court dismissed Homeplus’ revised restructuring proposal — which called for sweeping cost cuts, including shuttering nearly half of its stores and reducing its workforce — after the company failed to secure the minimum 200 billion won ($130 million) in fresh funding needed to execute the plan. “The minimum funding required to implement the plan has yet to be secured,” the court said. “As the proposal is therefore not feasible, the rehabilitation proceedings will be terminated without further hearings.” Homeplus has 14 days to appeal. If the ruling stands, the company will be dissolved and creditors will be free to pursue legal remedies, such as asset seizures and foreclosure. Within hours of the decision, the troubled retailer again appealed to its largest creditor, Meritz Financia