Gun-Ho drove to Seoul to meet with the bank branch manager in Gangnam.
“I have 40 billion won in my account. Please transfer all of them to the GH company bank account.”
“Are you going to purchase the building with the company’s name?”
“I think that would be better.”
“Once you make a sales and purchase contract for the building, please let me know right away. I will contact the branch manager of the Capital.”
“Thank you.”
Once he walked out of the bank in Gangnam, Gun-Ho headed to his office in the same area— GH Development. He felt that his office of GH Development was small after he spent many days in a large office in Jiksan Town. The workers of GH Media came to the office from their office next door to say hello to Gun-Ho.
“How are you all?”
“We are printing the third and the fourth edition of the Japanese book— the person who wakes up in the morning. The book is selling really well.”
“That’s good to hear.”
“The business management book that you recommended and Professor Jien Wang’s book are doing okay. One Japanese book is doing great while the other two are not good.”
“The sales income from the book that you are publishing 3rd and 4th edition will recover the loss we incurred from other books?”
“We are not just recovering our loss from that book, but it will bring enough income to sustain GH Media at least for a year. You will get the investment return from it too, sir.”
“Haha. Everyone did a good job. You can go back to your office and keep up with your great work. I am here for an important meeting with GH Development.”
Manager Kang and Ms. Ji-Young Jeong felt nervous when Gun-Ho said he had important things to talk about with GH Development. Once all of the workers of GH Media were dismissed, Gun-Ho asked Manager Kang and Ji-Young to sit at a table. Manager Kang and Ji-Young felt more difficult to be with Gun-Ho than before.
Gun-Ho continued to talk while smiling and he wanted to ease his workers of GH Development.
“Let’s have some tea while we are having our meeting.”
Ji-Young quickly brought green tea.
“I have the bank book of our major bank with me for the GH Development while the bank book for the company operation expenses is here with you.”
Manager Kang and Ji-Young were all ears.
“I just deposited 40 billion won into the GH Development bank account.”
“40 billion won!?”
Manager Kang and Ji-Young were frightened when they heard the amount of 40 billion won. They had never seen that kind of money in their entire lives.
“I brought the account balance sheet with me. Manager Kang, please take this with you and increase the capital stock of GH Development as such.”
“Huh? Did you just say 40 billion won, sir?”
“We will acquire a 19-floor building in Sinsa Town. Its appraised value is 230 billion won and I am currently negotiating the price with the seller. We will buy the building under the GH Development’s name with this 40 billion won, and we will loan the remaining balance from a bank. For now, increase GH Development’s capital stock for an additional 40 billion won after you talk with the certified legal consultant.”
“Yes, sir.”
Manager Kang and Ji-Young found themselves shaking.
“Let’s sell our OneRoomTels.”
“Selling the OneRoomTels?”
“Yes, and deposit the sales proceeds into our company’s major bank account.”
“Yes, sir.”
“Okay, that’s all I needed to talk about with you today. I am leaving for Jiksan Town in Cheonan City now.”
When Gun-Ho had acquired Mulpasaneop, he bought the company with their debts as well. Since Gun-Ho had enough cash in his bank account, he could have bought the company and paid off their debts, but he chose not to.
“It’s not bad to have some debt for a company because the government treats the loan interest as a business expense.”
GH Mobile paid off all of Mulpasaneop’s small debts but they still had large debts from raw material suppliers. Gun-Ho convinced these companies that GH Mobile would gradually pay the debts while still doing business with them. The creditor companies understood the situation since they were aware that Mulpasaneop was once under court receivership.
However, one of the creditor companies suddenly filed a lawsuit against GH Mobile and it was Seongil Polymer. It was a company which usually bought raw materials from a large company and sold them to other businesses, it was more like a sales agency company.
The internal officer brought the lawsuit document for an unpaid bill filed by Seongil Polymer and the provisional seizure of the new factory in Jiksan Town.
“How much do we owe to Seongil Polymer?”
“It’s 300 million won.”
“Have you called them to talk about this?”
“I have, and I asked them why they filed a lawsuit against us given our current relationship. They said they are currently experiencing financial difficulty with the business.”
“This is getting serious since they seized our new factory.”
“The sales director has a close relationship with the president of Seongil Polymer and he talked with him too. Our sales director told him that we are gradually paying off the debt and we are still doing business together, and he doesn’t understand why Seongil Polymer filed a lawsuit in this situation.”
“What was his response?”
“They said that they are not doing well financially and they haven’t paid their workers for a while, so they need the money right now.”
“Can we pay off their 300 million won now?”
“We can, but we will have to delay our worker’s payment. Even though we are doing better, we still don’t have enough funds yet.”
“Hmm.”
“We can’t borrow additional money from a bank either. Our loan with a bank reached the maximum amount they allow. The only way I can think of is getting hard money for quick temporary use, but it’s very risky.”
“We just have to pay a bit higher interest rate for the hard money use, don’t we?”
“That’s not the only consequence we need to concern. Once we pay off Seongil Polymer’s debt, other creditor companies will ask the same. They will ask us to treat them equally with Seongil Polymer.”
“What if we just let it sit?”
“If the plaintiff wins, the court will make a payment order, then they will force us to pay.”
“Does it mean that they will seize our company’s machines or automobiles?”
“They will probably seize the accounts receivable such as the payment we are expecting to receive from our major customers—S Group or Mandong Company, rather than our equipment or cars. Moreover, since they already seized our factory, they can request to put it up for sale.”
“Because of 300 million won, our factory can be put up for sale which is worth 7 billion won.”
“That’s right. Considering the price of the land and construction cost of our new building, it will be worth at least 7 billion won. Many companies go bankrupt because of a small amount of money that they can’t pay at a certain time.”
“What do you suggest, Mr. Internal Auditor?”
“I will buy some time for now.”
“What’s your plan to do that?”
“I will file an objection to the court, and tell them that Seongil Polymer and our company—
GH Mobile already agreed on an installment payment plan for the existing debt, but now they are unreasonably asking us to pay the entire amount of debt by filing a lawsuit. That’s not fair.”
“If we do so, the judge will determine that there is something to dispute and he will order a trial.”
“Exactly. While we proceed with the trial and buy some time accordingly, we will keep trying to convince the president of Seongil Polymer.”
“I see. I will talk with Seongil Polymer’s president first.”
“That’s a good idea, sir. I think it will be more effective if you, as the owner president talk with him directly, rather than one of the directors meets him.”
“I see what you mean. I will visit Seongil Polymer with our manager in the purchasing team.”
“Since we need to file the objection with the court within two weeks, I will start preparing necessary documents.”
“Sounds good.”
Gun-Ho drove to Seoul to meet with the bank branch manager in Gangnam.
“I have 40 billion won in my account. Please transfer all of them to the GH company bank account.”
“Are you going to purchase the building with the company’s name?”
“I think that would be better.”
“Once you make a sales and purchase contract for the building, please let me know right away. I will contact the branch manager of the Capital.”
“Thank you.”
Once he walked out of the bank in Gangnam, Gun-Ho headed to his office in the same area— GH Development. He felt that his office of GH Development was small after he spent many days in a large office in Jiksan Town. The workers of GH Media came to the office from their office next door to say hello to Gun-Ho.
“How are you all?”
“We are printing the third and the fourth edition of the Japanese book— the person who wakes up in the morning. The book is selling really well.”
“That’s good to hear.”
“The business management book that you recommended and Professor Jien Wang’s book are doing okay. One Japanese book is doing great while the other two are not good.”
“The sales income from the book that you are publishing 3rd and 4th edition will recover the loss we incurred from other books?”
“We are not just recovering our loss from that book, but it will bring enough income to sustain GH Media at least for a year. You will get the investment return from it too, sir.”
“Haha. Everyone did a good job. You can go back to your office and keep up with your great work. I am here for an important meeting with GH Development.”
Manager Kang and Ms. Ji-Young Jeong felt nervous when Gun-Ho said he had important things to talk about with GH Development. Once all of the workers of GH Media were dismissed, Gun-Ho asked Manager Kang and Ji-Young to sit at a table. Manager Kang and Ji-Young felt more difficult to be with Gun-Ho than before.
Gun-Ho continued to talk while smiling and he wanted to ease his workers of GH Development.
“Let’s have some tea while we are having our meeting.”
Ji-Young quickly brought green tea.
“I have the bank book of our major bank with me for the GH Development while the bank book for the company operation expenses is here with you.”
Manager Kang and Ji-Young were all ears.
“I just deposited 40 billion won into the GH Development bank account.”
“40 billion won!?”
Manager Kang and Ji-Young were frightened when they heard the amount of 40 billion won. They had never seen that kind of money in their entire lives.
“I brought the account balance sheet with me. Manager Kang, please take this with you and increase the capital stock of GH Development as such.”
“Huh? Did you just say 40 billion won, sir?”
“We will acquire a 19-floor building in Sinsa Town. Its appraised value is 230 billion won and I am currently negotiating the price with the seller. We will buy the building under the GH Development’s name with this 40 billion won, and we will loan the remaining balance from a bank. For now, increase GH Development’s capital stock for an additional 40 billion won after you talk with the certified legal consultant.”
“Yes, sir.”
Manager Kang and Ji-Young found themselves shaking.
“Let’s sell our OneRoomTels.”
“Selling the OneRoomTels?”
“Yes, and deposit the sales proceeds into our company’s major bank account.”
“Yes, sir.”
“Okay, that’s all I needed to talk about with you today. I am leaving for Jiksan Town in Cheonan City now.”
When Gun-Ho had acquired Mulpasaneop, he bought the company with their debts as well. Since Gun-Ho had enough cash in his bank account, he could have bought the company and paid off their debts, but he chose not to.
“It’s not bad to have some debt for a company because the government treats the loan interest as a business expense.”
GH Mobile paid off all of Mulpasaneop’s small debts but they still had large debts from raw material suppliers. Gun-Ho convinced these companies that GH Mobile would gradually pay the debts while still doing business with them. The creditor companies understood the situation since they were aware that Mulpasaneop was once under court receivership.
However, one of the creditor companies suddenly filed a lawsuit against GH Mobile and it was Seongil Polymer. It was a company which usually bought raw materials from a large company and sold them to other businesses, it was more like a sales agency company.
The internal officer brought the lawsuit document for an unpaid bill filed by Seongil Polymer and the provisional seizure of the new factory in Jiksan Town.
“How much do we owe to Seongil Polymer?”
“It’s 300 million won.”
“Have you called them to talk about this?”
“I have, and I asked them why they filed a lawsuit against us given our current relationship. They said they are currently experiencing financial difficulty with the business.”
“This is getting serious since they seized our new factory.”
“The sales director has a close relationship with the president of Seongil Polymer and he talked with him too. Our sales director told him that we are gradually paying off the debt and we are still doing business together, and he doesn’t understand why Seongil Polymer filed a lawsuit in this situation.”
“What was his response?”
“They said that they are not doing well financially and they haven’t paid their workers for a while, so they need the money right now.”
“Can we pay off their 300 million won now?”
“We can, but we will have to delay our worker’s payment. Even though we are doing better, we still don’t have enough funds yet.”
“Hmm.”
“We can’t borrow additional money from a bank either. Our loan with a bank reached the maximum amount they allow. The only way I can think of is getting hard money for quick temporary use, but it’s very risky.”
“We just have to pay a bit higher interest rate for the hard money use, don’t we?”
“That’s not the only consequence we need to concern. Once we pay off Seongil Polymer’s debt, other creditor companies will ask the same. They will ask us to treat them equally with Seongil Polymer.”
“What if we just let it sit?”
“If the plaintiff wins, the court will make a payment order, then they will force us to pay.”
“Does it mean that they will seize our company’s machines or automobiles?”
“They will probably seize the accounts receivable such as the payment we are expecting to receive from our major customers—S Group or Mandong Company, rather than our equipment or cars. Moreover, since they already seized our factory, they can request to put it up for sale.”
“Because of 300 million won, our factory can be put up for sale which is worth 7 billion won.”
“That’s right. Considering the price of the land and construction cost of our new building, it will be worth at least 7 billion won. Many companies go bankrupt because of a small amount of money that they can’t pay at a certain time.”
“What do you suggest, Mr. Internal Auditor?”
“I will buy some time for now.”
“What’s your plan to do that?”
“I will file an objection to the court, and tell them that Seongil Polymer and our company—
GH Mobile already agreed on an installment payment plan for the existing debt, but now they are unreasonably asking us to pay the entire amount of debt by filing a lawsuit. That’s not fair.”
“If we do so, the judge will determine that there is something to dispute and he will order a trial.”
“Exactly. While we proceed with the trial and buy some time accordingly, we will keep trying to convince the president of Seongil Polymer.”
“I see. I will talk with Seongil Polymer’s president first.”
“That’s a good idea, sir. I think it will be more effective if you, as the owner president talk with him directly, rather than one of the directors meets him.”
“I see what you mean. I will visit Seongil Polymer with our manager in the purchasing team.”
“Since we need to file the objection with the court within two weeks, I will start preparing necessary documents.”
“Sounds good.”
