STX Offshore & Shipbuilding’s restructuring efforts impeded by lawsuits

The South Korean shipbuilder is facing 25 civil lawsuits filed by former employees, investors and business partners, demanding a total of KRW102bn ($91.6m), according to The Korea Times.

STX admited that its 1,070 unionized workers filed a lawsuit demanding KRW11bn in back wages and bonuses from the past few years. Another 50 former employees have asked for KRW2.2bn in back wages.

A group of 500 individual equity investors also filed a class-action suit against STX, seeking KRW11.9bn in compensation after they incurred losses from buying the company shares based on its misleading financial statements, the news report said.

STX’s eight business partners recently went to court to seek overdue payments amounting to KRW15bn, while two foreign shipowners are demanding KRW48.7bn in compensation for botched shipbuilding orders at the yard.

STX filed for a court-led restructuring in May this year with the court granting the receivership in June. The financially distressed shipbuilder has been under the control of its creditors since April 2013, and has failed to regain financial stability despite receiving more than KRW4trn in aid from its creditors over the years.