Nolbu, a leading Korean food franchise in South Korea, has filed for corporate rehabilitation proceedings with the court to normalize its management, resulting in a temporary suspension of creditors' exercise of rights.

Founded in 1987 as a bosam (pork wraps) specialty restaurant by former CEO Kim Sun-jin, Nolbu has led the domestic Korean food franchise market and grown steadily. In 2011, Morgan Stanley Private Equity acquired the company for 111.4 billion won, and in 2021, ENB Holdings expanded its management control. During its peak, the company surpassed 1,000 franchise locations and recorded annual revenue of 120 billion won, propelled by popular menu items such as bosam and budae-jjigae (sausage stew), reaching the top of the industry.

However, the company suffered a sharp decline due to intensifying competition in the restaurant industry and the aftermath of COVID-19. Nolbu recorded operating losses for six consecutive years from 2017 to 2022. Although it successfully returned to profitability in 2023, it recently slipped back into the red, and management deterioration continued.

According to last year's audit report, Nolbu's operating loss for 2023 was tallied at 8.69486265 billion won. This represents an approximately 14.8-fold increase compared to the previous year's figure of 584.80942 million won. Other data estimated the operating loss at approximately 8.7 billion won.

Following this continued poor performance, Nolbu applied for the initiation of corporate rehabilitation proceedings at the Seoul Rehabilitation Court on the 31st of last month. Accordingly, on the 4th of this month, Rehabilitation Division 15 (Presiding Judge Kim Yun-seon) issued a comprehensive stay order against Nolbu.

With this order in place, all rehabilitation creditors and rehabilitation secured creditors are prohibited from exercising their rights based on claims and security interests, including compulsory execution, provisional attachment, provisional injunction, and auction, until a final decision is made on whether to initiate rehabilitation proceedings.

The hearing date for the representative's questioning is scheduled to take place on the 11th at 4:30 p.m. The bench plans to intensively verify the specific scale of Nolbu's debt, the circumstances of the rehabilitation application, and future debt adjustment measures during the hearing.