Pizza Hut Korea filed for court receivership after being ordered to pay billions of won in damages following a lawsuit by franchise owners. (Image courtesy of Kobiz Media)
SEOUL, Nov. 11 (Korea Bizwire) – Pizza Hut Korea Ltd., the South Korean operator of the namesake American pizza franchise, on Monday received approval from a court to proceed with an autonomous restructuring support (ARS) plan, putting on hold court-mandated rehabilitation proceedings after losing a lawsuit brought by store owners.
The Seoul Bankruptcy Court said it approved the ARS rehabilitation plan requested by Pizza Hut Korea earlier in the day.
An ARS program is a system where a company negotiates debt repayment plans autonomously with its creditors. The court has given one month for related negotiations to take place.
If an agreement is reached, a voluntary agreement will be finalized, allowing the company to avoid court-mandated rehabilitation procedures.
Last week, Pizza Hut Korea filed for corporate rehabilitation due to financial difficulties stemming from losing a lawsuit brought by store owners. The company reportedly needs to return 21 billion won (US$15 million) in franchise fees to 94 store owners.
(Yonhap)
