[UPDATE] Summary of the Toscana lawsuit situation

Junsu took out a loan of 15 billion won of which approximately 9 billion won was used to pay off a pre-existing loan, and approximately 5.9 billion won was directly deposited into Cheonji Construction’s (hereby Cheonji) account for equipment expenses from the bank as per banking regulations. Hence, the 5.9 billion won was always Junsu’s money which he has to return to the bank and whatever remained after the equipment expenses should have been returned by Cheonji to Kim Junsu.

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How the cash from the loan flowed: Approximately 5.9 billion won of the 15 billion loan went to Cheonji.
Of the 5.9 billion won, approximately 5 billion should’ve been returned to Kim Junsu.

In order to record the cash inflow in their accounting ledgers, Cheonji asked Toscana to write a promissory note for them which Toscana agreed to and a promissory note was written on August 4th, 2014. However, Toscana’s side became worried that the note would be used maliciously so a document with the promissory note (same content as the one previously written) AND a confirmation document that states “there is no repayment value associated with the promissory note and is only for accounting purposes” was written up, signed and sealed by both Toscana and Cheonji one day after on August 5th, 2014. Basically, the promissory note has been nullified by the confirmation document.

Note: Kim Junsu did not participate in any of these meetings between Toscana and Cheonji and he is not involved in the operation of Toscana Hotel. His brother and father are in charge of operation.

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Left: Promissory note + confirmation document provided by Toscana Hotel
Right: Promissory note ONLY provided by Cheonji Construction

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Confirmation document signed and sealed by Cheonji Construction’s CEO on August 5th

The problem comes when Toscana realizes they’ve been charged double the actual cost of construction, amounting to approximately 10 billion won so Toscana prepared to sue for compensation of damages. However, Cheonji got wind of Toscana’s plan to sue and smeared Kim Junsu through Jeju Domin Ilbo, which was the first media outlet that reported on the conflict and is under the same corporate umbrella as Cheonji.

Even though the 5.9 billion won is Kim Junsu’s money, Cheonji distorted the situation by saying that Kim Junsu borrowed 5.9 billion won from Cheonji. Why did Cheonji’s CEO sign the confirmation document that states there is no repayment value to the promissory note then?

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Reporter: “Why did you sign and seal the confirmation document which states there is no repayment value to the promissory note?”

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Cheonji CEO: “At the time, they asked me to sign and seal it so I did.”

This is 5.9 billion won we are talking about, approximately $5.9 million USD. If you lent somebody $5.9 million in a business transaction and that person came to you saying “can you sign this document which states that I don’t have to pay back that $5.9 million I borrowed from you?” Anybody would say heck no, let alone an experienced construction company CEO.

Aside from the 800 million won that was actually used for equipment, the remaining 5 billion won should have been returned to Junsu but Cheonji is claiming that that amount is what they lent to Kim Junsu. In essence, Cheonji is trying to extort Kim Junsu out of the money that Kim Junsu took out as a loan in his name. Cheonji was previously granted provisional seizure of Toscana property by Jeju District Court. However, that provisional seizure has now been removed and the case will go to court.

TLDR;

Kim Junsu took out a 15 billion won loan of which 5.9 billion won was directly deposited into Cheonji accounts for equipment. The remaining should’ve been returned but Cheonji is claiming this amount is a loan they gave to Kim Junsu and are trying to extort Kim Junsu out of money that was always rightfully his. When asked why they signed a document which states Toscana doesn’t owe a penny of the 5.9 billion to Cheonji, Cheonji CEO said “They asked me to so I did”. The provisional seizure of property previously applied on Toscana has been removed.

More info can be found on previous translations here and here

Video credit: KIM JUNSU 소풍
Summary by: ohmyjunsu of intoxication

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3 thoughts on “[UPDATE] Summary of the Toscana lawsuit situation

  1. Felicia says:

    the numbers don’t add up?

    “15 billion won of which approximately 9 billion won was used to pay off a pre-existing loan, and approximately 5.9 billion won was directly deposited into Cheonji Construction’s ) account for equipment expenses from the bank as per banking regulations”

    was the 9 billion won a pre-existing loan that in relation to Cheonji, and was also given to Cheonji (by means of deposit or paid to 3rd parties on behalf of Cheonji)? Else it was only 5.9 that is in question here which was supposed to be used for equipment.

    “Aside from the 8 billion won that was actually used for equipment, the remaining 5 billion won should have been returned to Junsu ”

    1. Why is 5 billion stated as should be returned to Junsu? Nowhere in the article explains this?
    2. 8 billion that was used for equipment – this is already beyond the 5.9bil that was banked in for that purpose. How does this add up to 8+5 = 13bil being disputed here? huh?

    “Kim Junsu took out a 15 billion won loan of which 5.8 billion won was directly deposited into Cheonji accounts for equipment. The remaining should’ve been returned but Cheonji is claiming this amount is a loan they gave to Kim Junsu and are trying to extort Kim Junsu out of money that was always rightfully his”

    1. 5.8 or 5.9 was banked in now?
    2. what remaining should be returned?? remaining of 5.9 if equipment costs less? but the issue was that Cheonji already spent more than agreed hence Toscana wanting to sue. Still don’t get the whole they owe Junsu 5bil unless it’s supposed to be all 15bil was deposited to Cheonji and out of 15 10 was used up already.

    • The other 9 billion was used to pay off a pre-existing bank loan. Like the post says, more info can be found in the two link.

      “approximately 5.8” is what SBS put on their diagram but Junsu’s dad stated in the interview that it was 5.9 billion, so I used 5.9 billion.

      8 billion has been changed to 800 million. Thanks.

  2. Kass says:

    Thank you so much for this, I’ve seen many posts but some didn’t make sense to me and I was thinking the same ‘so they came to you and said can you sign this document which states that I don’t have to pay you back 5.9m ?’ Priceless.

    Please keep updating this post as soon as you know other information. I will keep supporting him and sharing this post.

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