The Seoul Bankruptcy Court announced today, July 3, that it has decided to terminate the rehabilitation process for the struggling retailer Homeplus.

The court determined that there is no possibility of rehabilitation, as Homeplus failed to secure the minimum 200 billion won in operating funds required to properly implement its rehabilitation plan.

This court decision comes one year and four months after Homeplus entered corporate rehabilitation proceedings in March of last year.

The deadline for the rehabilitation process, originally set for March 4, was extended to May 4 and subsequently to July 3. However, as Homeplus ultimately failed to resolve its financial difficulties, the court decided to terminate the process.

Once the termination of the rehabilitation process is finalized, the comprehensive injunction that had been preventing creditors from carrying out compulsory execution, provisional seizure, and auctions will be lifted.

Following the lifting of this injunction, creditors will be able to exercise their rights against Homeplus individually.

This decision does not mean that Homeplus will go bankrupt immediately.

Homeplus can file an immediate appeal within 14 days, and if the court recognizes valid reasons, the rehabilitation process could potentially resume.

However, as the company would effectively need to secure the 200 billion won in minimum operating funds suggested by the court within two weeks, industry experts believe the possibility of the rehabilitation process resuming is very low.

If the termination is finalized and creditors begin individual debt collection, Homeplus will effectively enter bankruptcy proceedings.

If Homeplus, the second-largest player in the hypermarket industry, goes bankrupt, the most significant impact is expected to be on the labor market.

Currently, Homeplus has approximately 9,000 direct employees. The number of affected individuals is expected to be much higher when including indirectly employed personnel in logistics, cleaning, and security, as well as employees of partner companies and self-employed business owners operating within the stores.

Concerns are also being raised that thousands of suppliers may face difficulties in collecting payments.

In particular, there are fears that small and medium-sized partner companies with high dependency on Homeplus could fall into a chain reaction of financial distress.

Local commercial areas are also expected to face unavoidable damage. Life-oriented businesses operating inside and outside Homeplus stores, such as restaurants, cafes, hair salons, and pharmacies, are expected to suffer direct losses if store closures increase.

Reported by Kim Minjeong | Video by Ahn Jun-hyeok | Graphics by Yang Hye-min | Produced by SBS Digital News