[비즈한국] Ballan, which is undergoing bankruptcy proceedings, has begun full-scale asset liquidation. Approximately 1,000 items of clothing and miscellaneous goods, including luxury brand products such as Burberry, Prada, and Louis Vuitton that were stored in warehouses, have been put up for sale all at once. What draws attention is the price. Despite the large volume of luxury items included, the total minimum bid price has been set at 20 million won.
Quantity and condition cannot be verified… Bidding closed on the 14th
Ballan, which was declared bankrupt by the court in February, has entered into full-scale asset liquidation procedures. According to Biz Hankook’s reporting, the bankruptcy trustee for Ballan recently put the inventory assets stored in Yeoju and Pocheon warehouses up for public auction. The items for sale total 1,044, including clothing, shoes, and hats.
As Ballan operated an online luxury platform, a significant number of luxury brand products were confirmed among the inventory for sale. The inventory list includes many famous overseas brands such as Burberry, Moncler, Prada, Bottega Veneta, Valentino, and Louis Vuitton. Sports brand products like Nike and New Balance were also listed for sale.
A notable part is the sale price of the inventory. The minimum bid price for all 1,000 or so inventory assets was set at 20 million won. Simply calculated, this comes to about 19,000 won per item. Considering that a significant number of luxury brand products are included, it appears to be at a relatively low level, which is interpreted as reflecting the bulk sale method and strict acquisition conditions.
This sale is a bulk transaction that requires the buyer to acquire all 1,044 items at once. Furthermore, the bankruptcy trustee specified in the public notice that ‘the actual condition, quantity, and items of the assets may differ from the inventory list.’ The winning bidder must assume the risks associated with the condition and actual quantity of the inventory and take over all 1,000 items. Additionally, the goods stored in the two separate warehouses in Yeoju and Pocheon must be removed in their entirety by September 30. There is also the burden of having to acquire and remove a large quantity of inventory within about two weeks after the successful bid.
The bidding under these conditions closed on the 14th, and the bids were opened on the 16th. The bankruptcy trustee did not disclose the specific winning bid price.
18.5 billion won in unsettled payments remain… Seven months into bankruptcy, no repayment to sellers yet
Ballan’s inventory sale is part of the asset disposal process following bankruptcy. Ballan entered corporate rehabilitation procedures in March of last year. However, the rehabilitation procedure was abolished after the rehabilitation plan was rejected at the stakeholders’ meeting, and the Seoul Rehabilitation Court declared Ballan bankrupt on February 24 of this year.
Established in 2015, Ballan was considered one of the ‘first-generation online luxury platforms’ alongside Mustit and Trenbe. It grew rapidly by riding the wave of increased online demand for luxury goods during the COVID-19 pandemic, and in 2022, its corporate value was estimated at around 300 billion won. However, business difficulties deepened as performance worsened due to a slowdown in consumption after the end of the pandemic and intensified competition in the industry.
As Ballan begins liquidating assets, a point of interest is how much the vendors who have not received their settlement payments will be able to recover in the future. Ballan has 1,198 creditors, with over 90% being commercial creditors such as the sellers on the platform. It is known that approximately 1,100 vendors are owed 18.5 billion won in unpaid sales proceeds from Ballan.
However, it appears there are not many assets that can be converted into actual cash compared to the scale of the debt. While Ballan presented a total book asset value of around 1.7 billion won, it is known that the assets expected to be actually liquefiable during the bankruptcy process are only about 200 million won. Even if additional funds are secured through future asset sales and litigation, the amount that vendors can recover is highly likely to be limited.
Separately, there is the issue of returning approximately 3.5 billion won. Just before filing for rehabilitation, Ballan repaid about 3.5 billion won in debt to certain lending firms in April of last year. Other creditors raised issues, claiming that the company gave preferential repayment to specific creditors, reducing the share available for everyone else.
In response, Ballan exercised the right of avoidance to reverse the payment. The right of avoidance is a system where a company facing rehabilitation or bankruptcy can cancel transactions and reclaim company property if the company disposed of its assets or repaid debts in a way that favored only certain creditors. Ballan had previously stated during its rehabilitation process that it would recover this amount and use it as a source of funds to repay creditors, including vendors.
Although the court issued a recommendation for reconciliation in December last year to the effect that the lending firms should return approximately 3.5 billion won to Ballan, the lending firms raised an objection. Subsequently, the Seoul Rehabilitation Court ruled in January of this year that the claim for avoidance filed by Ballan should be fully accepted, ordering the 3.5 billion won to be returned, but it is known that the amount has not yet been returned.
Vendors have not received their unpaid settlement payments to date. One seller stated, “I haven't received a single penny of my settlement money. If the rehabilitation process had continued, I might have been repaid at least some, but since the bankruptcy, I haven’t received anything at all,” adding, “I know some sellers have filed criminal complaints, but it hasn't been easy due to reasons like lack of evidence. Many sellers have now effectively given up on getting their unpaid money back.”
The seller added, “Since the Ballan crisis, trust in the overall luxury platform industry has fallen significantly. As sellers who were listed on other luxury platforms have also left one after another, the number of vendors has decreased, leading to a general contraction in the industry.”