South Korean luxury retail platform Balaan filed for corporate rehabilitation proceedings on March 31 following a payment crisis. CEO Choi Hyung-rok announced in a public notice that the company had encountered a short-term liquidity crisis and had applied for corporate rehabilitation with the Seoul Bankruptcy Court.
Balaan failed to pay sales proceeds to its partner vendors as scheduled on March 24, and since March 28, all product purchases and payments have been suspended. The platform’s average monthly transaction volume is about 30 billion won ($21 million), with around 1,300 partner companies. The total unpaid settlement amount is reported to be in the hundreds of billions of won.
Initially, Balaan explained that the delay was due to “settlement errors” but ultimately filed for corporate rehabilitation. Choi said, “There has been no financial harm to consumers,” adding, “If the short-term liquidity issue is resolved through rehabilitation, we can quickly return to normal operations.” Balaan also plans to pursue mergers and acquisitions (M&A) alongside the rehabilitation process.
