Members' liability for co-op's debt: reversed on appeal

Background

A builder that had not been paid under contracts with an agricultural cooperative corporation sued our clients, members of the co-op, for about KRW 49.8 million jointly with the co-op. Our clients partly lost at first instance and appealed.

Our approach

We argued that because the co-op was a corporation established under the governing statute, its members were not responsible for its debts.

Issues and ruling

The appellate court held that a 2015 amendment limited members' liability to their paid-in contributions. Since the contracts were signed after the amendment took effect, the creditor could pursue only the co-op, not its members.

Outcome

The part of the first-instance judgment against our clients was set aside, the claim was dismissed in full, and the builder bears all costs.

This is the outcome of an individual case and does not guarantee the same result in similar matters. Some facts have been generalized to protect the parties involved.