[Edaily Marketin Hur Jieun Reporter] If Homeplus enters bankruptcy proceedings, Meritz Financial Group, its largest creditor, is expected to begin the process of disposing of the 62 stores it holds as collateral in earnest. Meritz’s security interest is classified as a separate right and is thus distinct from the bankruptcy estate. This structure allows Meritz to recover its claims on a priority basis, independent of the court’s general distribution process.

The issue is that Meritz, the investigative committee, and the appraisal agencies have differing assessments of the value of these collateral properties. Since junior creditors will receive the value of the assets remaining after Meritz recovers its claims, fierce disputes over the collateral are expected to arise during the upcoming disposition process.

Meritz: “Homeplus Collateral Value Down from 4.8 Trillion to 1.5 Trillion”

According to the investment banking (IB) industry on the 14th, Meritz is valuing the Homeplus real estate held as collateral at around 1.5 trillion won. Meritz claims that while the appraised value of the real estate pledged as collateral when Homeplus borrowed 1.3 trillion won from Meritz in 2024 was around 4.8 trillion won, the collateral value subsequently plummeted to less than one-third of that amount during the corporate rehabilitation process.

In contrast, Samil Accounting Firm, which serves as the investigation committee for Homeplus’s restructuring proceedings, estimated the value of the collateral to be 2.8174 trillion won, even after adjusting it to liquidation value. The appraisal firm appointed by the court also estimated the value of Homeplus’s land alone at approximately 2.7 trillion won, showing a discrepancy of more than 1 trillion won compared to Meritz’s assessment.

This discrepancy is not merely a battle of numbers. If Meritz’s claim holds true, after selling the collateralized real estate to recover the debt (1.56 trillion won), there would be almost no assets remaining—or the assets might even fall short. In fact, Meritz anticipates that it will take several months or more for the proceeds from the store sales to come in, and therefore considers the likelihood of recovering funds in the short term to be low.

On the other hand, according to Samil Accounting Firm’s valuation, even after excluding Meritz’s share from the liquidation value of 2.8174 trillion won, more than 1 trillion won remains. This could serve as a practical source of funds—approximately 1.08 trillion won—for repaying employee wages, severance pay, and trade receivables, which are to be converted into foundation bonds. Depending on which valuation is correct, the actual recovery rate for foundation bondholders could be zero (0), or they could recover a significant portion of their claims.

Euljiro Committee: “Meritz Has Conservatively Valued Collateral”

The debate over collateral value is also coming to light during the actual sale process. Homeplus is currently in the process of selling non-core stores scheduled for closure—including the Daejeon Yuseong and Donggwangju locations—for 230 billion won. At a closed-door meeting chaired by the Euljiro Committee on the 9th, lawmakers from the Democratic Party of Korea proposed converting a portion of the proceeds from this sale into debt-in-possession (DIP) financing, raising suspicions that Meritz is valuing the collateral too conservatively.

Democratic Party lawmaker Min Byung-deok explained, “Although Meritz’s collateral appears sufficient to us, they maintain that the collateral is insufficient and that additional loans are completely impossible,” adding, “It seems they are taking a very conservative view of the collateral capacity.” He continued, “They are taking the stance that they will absolutely not budge if there is even the slightest possibility of loss to themselves.”

However, Meritz explained that these stores are assets secured by first-priority liens, and that the proceeds from their sale would constitute substitute collateral derived from the liquidation of assets held in a collateral trust, rather than general operating funds. Furthermore, Meritz argues that since these assets are encumbered with both its rights as the first-priority beneficiary and those of junior financial institutions, diverting them for emergency operating funds would require separate legal review and the consent of stakeholders.

It cannot be ruled out that this could escalate into litigation involving the bankruptcy trustee exercising the right of avoidance or claims of an unfairly low-priced sale, centered on whether Meritz sold the collateral real estate at fair market value. However, given the institutional nature of a secured creditor’s right to private disposition, it is unlikely that the sale can be reversed after it has taken place; consequently, disputes over the valuation are expected to continue for some time even before the disposition takes place.

A lawyer specializing in reorganization and bankruptcy explained, “Since Meritz is the first-priority secured creditor, it is in a position to control even the use of the sale proceeds based on its separate right, which is distinct from the bankruptcy estate,” adding, “This illustrates the reality that raising funds to protect estate creditors is structurally difficult without the cooperation of the secured creditor.”