Court extends Homeplus' rehabilitation process after appeal

A bankruptcy court on Tuesday canceled an earlier decision to end Homeplus' rehabilitation proceedings, extending the process after the troubled discount chain lodged an appeal.

The Seoul Bankruptcy Court said it would extend the proceedings until Sept.

4 after Homeplus submitted the appeal Monday against the court decision to terminate the process on July 3.

The court had originally decided to scrap the proceedings after the retailer failed to secure at least 200 billion won ($134 million) required for the restructuring.

The appeal came after the retailer's largest creditor, Meritz Financial Group, agreed last week to provide financing in exchange for a full payment guarantee from private equity firm MBK Partners, the retailer's sole owner.

"The original termination decision was based on a lack of feasibility to carry out the rehabilitation plan due to a shortage of funds, but as operating funds have been secured, the immediate appeal has been recognized," the court said.

The distressed retailer temporarily closed its outlets starting July 13 due to a lack of operating capital and diffic ...