[Edaily Reporter NA EUN-KYUNG ] Shin Dong-guk, Chairman of Hanyang Precision, won his first-instance trial in a 60 billion won breach-of-contract lawsuit filed by Song Young-sook, Chairwoman of #HanmiPharm Group; Lim Ju-hyun, Vice Chairman Hanmi Science(008930); and Killington Co., Ltd.

On the 1st, Civil Division 30 of the Seoul Central District Court dismissed the claim for liquidated damages filed against Chairman Shin by Chairman Song, Vice Chairman Im, and Killington. The court also ordered the plaintiffs to bear the litigation costs.

This lawsuit stemmed from internal conflicts within the so-called “four-party alliance,” which was formed during the HanmiPharm Group’s management control dispute. Chairman Shin, Chairman Song, Vice Chairman Lim, and Killington formed the alliance during the 2024 management control dispute and entered into a shareholders’ agreement centered on the joint exercise of voting rights for Hanmi Science shares. Subsequently, disagreements arose over an investment in the Banpo Senior Care project, causing a rift in the relationship between the two sides.

In June of last year, the Hanmi Science Board of Directors discussed whether to participate in the senior care project being developed on the site of the former Sheraton Palace Hotel in Banpo-dong, Seoul. At the first board meeting, all directors voted in favor of a conditional motion to consider participation, contingent upon cooperation from Seoul St. Mary’s Hospital. However, at the second board meeting held subsequently, disagreements arose over whether the hospital would participate in the project, leading to a 6-to-4 decision not to proceed with the project.

Regarding this matter, Chairman Song, Vice Chairman Lim, and the Killington side argued that Chairman Shin had reneged on the initial agreement, thereby violating the provision in the shareholders’ agreement regarding the joint exercise of voting rights. Consequently, they filed a claim against Chairman Shin seeking a total of 60 billion won in liquidated damages. On the other hand, Chairman Shin’s side countered that the decision made at the first board meeting was itself a conditional decision premised on the hospital’s cooperation, and that casting a dissenting vote at a subsequent board meeting after reviewing those conditions could not be considered a violation of the shareholders’ agreement. The two sides held three rounds of arguments through June, and the court concluded the proceedings without accepting any additional evidence.

This lawsuit also served as a catalyst for the breakup of the four-party alliance that had resolved the 2024 management control dispute at HanmiPharm Group. At the time, Chairman Song, Vice Chairman Lim, Chairman Shin, and La Défense Partners had formed an alliance during the management control dispute with the Lim Jong-yoon and Lim Jong-hoon brothers, but following a conflict over the senior care business, they have been engaged in a legal battle regarding the enforcement of the shareholders’ agreement.

The conflict escalated into mutual provisional attachments. Last year, Chairman Song, Vice Chairman Lim, and Killington obtained provisional attachments on Chairman Shin’s Hanmi Science shares and real estate based on claims for liquidated damages. Conversely, Chairman Shin filed a motion this year to place a provisional attachment on Vice Chairman Lim’s Hanmi Science shares—valued at 10 billion won—alleging that Vice Chairman Lim had violated the obligation to jointly exercise voting rights under the shareholders’ agreement; the court granted this motion last July. However, a provisional attachment is a procedure to preserve a claim pending a final judgment on the merits and does not imply that liability for breach of contract has been definitively established.

Chairman Shin’s side maintains that, separate from this ruling, the investment structure and decision-making process regarding the senior care business also need to be examined. According to Chairman Shin’s side, since Paul Capital Korea—which led the business investment—is connected to Killington, a major shareholder of Hanmi Science, and La Défense Partners, which acts as Killington’s executive agent, the potential for conflicts of interest should have been thoroughly examined during the business feasibility review and decision-making process. However, this does not mean that the court in this ruling determined there was a conflict of interest regarding the business in question.

Chairman Shin’s side stated, “The facts and legal principles were clear from the outset, and this was the expected outcome,” adding, “It is also necessary to examine whether the process by which shareholders with a vested interest in the business investment sought to hold the largest individual shareholder personally liable for a massive sum following the project’s collapse was appropriate.”

They continued, “Since we were confident in the facts and legal principles, there was no reason to escalate the dispute unnecessarily,” and added, “We will use this ruling as an opportunity to play a responsible role in further solidifying a system of responsible management centered on the board of directors and professional management.”