[Exclusive] The Aftermath of 'Jeon Jae-kook's Company' BookPlus Bankruptcy: Subsidiary 'The Book Center' Auction Fails

[비즈한국] It has been confirmed that the auction for the sale of The Book Center, a former subsidiary of BookPlus, has failed. BookPlus is a book wholesale and retail company established in 1998 by Jeon Jae-kook, the eldest son of the late Chun Doo-hwan. As BookPlus went bankrupt last year, The Book Center was also put up for auction, but it appears to be attracting little interest, possibly due to the shrinking reading population.

BookPlus established a separate legal entity, 'The Book Center,' in 2024 through the physical spin-off of its third-party logistics business division. Third-party logistics involves outsourcing all or part of logistics operations to specialized companies. The Book Center is a logistics company specializing in books.

Lee Soon-ja, spouse of the late Chun Doo-hwan, and their son Jeon Jae-kook are seen moving to pay their respects at the funeral hall of Severance Hospital in Seodaemun-gu, Seoul, where the mortuary of Yoon Ki-jung, Professor Emeritus at Yonsei University and father of former President Yoon Suk Yeol, was set up in 2023. Photo=Joint Press Corps

The spin-off of The Book Center appears to have reflected the intentions of Jeon Jae-kook. Although Jeon was initially the largest shareholder of BookPlus, he dropped to the third-largest shareholder in 2019 after a portion of his stake was seized and sold at public auction. As of the end of 2024, the shareholders of BookPlus consisted of: Mr. Yoo (32.42%), Libro (26.07%), and Jeon Jae-kook (19.71%). However, since Jeon is the largest shareholder of Libro, he was effectively in a position to act as the largest shareholder of BookPlus as well. Given the ownership structure, it is highly likely that the spin-off of The Book Center would have been difficult had Jeon opposed it.

When BookPlus faced a liquidity crisis last year, it announced that it would sell The Book Center to repay its debts. However, the position of BookPlus was not accepted, and the Seoul Bankruptcy Court declared BookPlus bankrupt in March of last year. A company declared bankrupt must liquidate its assets to repay its creditors.

Since The Book Center was spun off, BookPlus held 100% of its shares. Therefore, according to the court's decision, BookPlus must sell The Book Center and use the proceeds to repay its debts. Bizhankook's investigation revealed that BookPlus put The Book Center up for auction in December last year. The sale involved 100% of The Book Center's shares, with a minimum bid price of 1 billion won.

Prospective buyers for The Book Center can propose a price of 1 billion won or more, which is the minimum bid price. The bidder who offers the highest amount wins the acquisition of The Book Center. In the event of a tie in the bid amount, the winner is decided by a lottery.

Bizhankook's coverage confirmed that the auction for The Book Center failed. According to the BookPlus audit report, assets totaling 2.5 billion won were transferred to The Book Center at the time of the spin-off, while transferred liabilities amounted to approximately 700 million won. This means The Book Center had a net asset value of over 1.7 billion won. Despite this, there was not even a single bidder willing to acquire The Book Center for 1 billion won.

Considering the decline in the reading population, the outlook for The Book Center is not bright. The Book Center's parent company, BookPlus, suffered losses for years before eventually going bankrupt, and Interpark Songin Books, a large book wholesaler, also went bankrupt in 2021. Unless the minimum bid price for The Book Center is lowered, it is unlikely that a sale will be easy in the future.