As corporate rehabilitation proceedings for JoongAng Group affiliates advance, damage across the film and broadcasting sectors has become a reality, prompting the industry to call for measures to prevent chain damage.
The Solidarity of Film Professionals issued a statement Wednesday, saying, "As Megabox JoongAng's unpaid settlement funds accrued through the 14th of last month were classified as rehabilitation claims, payment of settlement funds owed to production, import and distribution companies out of ticket sales already paid by audiences has stopped."
The coalition stressed, "If the settlement funds are tied up for a long period, small and mid-sized production, import and distribution companies, as well as independent and art film distributors, could suffer a direct blow to their business continuity," adding, "Separate protective measures should be reviewed for small and mid-sized film businesses within the rehabilitation proceedings."
It further argued, "The theater industry is an ecosystem connecting numerous creators, production companies, distributors, investors and theaters," and "institutional supplements are needed to ensure the rehabilitation proceedings do not spread beyond the problem of a specific company into damage across the entire industry."
Earlier, the broadcasting sector also complained of damage and urged countermeasures. In a statement released last Friday, the Korea TV & Radio Actors Union said, "Since JTBC's application for corporate rehabilitation, damage to broadcast actors has reached a serious level," adding, "Production of numerous content projects has been suspended, and payment of appearance fees has also been delayed for a long time."
The union referred to delays in appearance fee payments for JTBC entertainment programs such as "Knowing Bros" and "Please Take Care of My Refrigerator," as well as disruptions in the payment of rebroadcast fees based on actors' neighboring rights, expressing concern that "if rehabilitation proceedings begin, actors' appearance fees are highly likely to be classified as subordinate claims."
It then urged, "JTBC must devise a plan to prioritize repayment of actors' appearance fees on par with wages, and present measures to minimize damage."
Meanwhile, JTBC failed to repay 20.6 billion won in securitized borrowings at maturity on the 12th of last month, and two days later, on the 14th, JoongAng Group applied for corporate rehabilitation proceedings for JoongAng Holdings, Contentree JoongAng, JoongAng P&I and Megabox JoongAng. Subsequently, on the 15th of last month, JTBC also applied for corporate rehabilitation, requesting the application of the Autonomous Restructuring Support (ARS) program.
On the 30th of last month, the court approved JTBC's ARS application and deferred a decision on whether to commence rehabilitation proceedings, while it decided to commence corporate rehabilitation proceedings for the remaining affiliates, including JoongAng Holdings, Contentree JoongAng, JoongAng P&I and Megabox JoongAng.
