Ministry reviews MegaboxJoongAng rehabilitation impact

South Korea's Ministry of Culture, Sports and Tourism said it held an emergency meeting with the Korean Film Council on July 10 to review conditions in the film sector and discuss responses with companies related to MegaboxJoongAng's rehabilitation procedure.

The ministry said Culture Minister Choi Hwi-young, Korean Film Council chair Han Sang-jun, distribution-sector representatives and operators of consigned theaters connected to Megabox's management attended. According to the ministry, they discussed support measures at the government level.

Choi said, 'As a government that has concentrated its policy capacity on the recovery of the film industry, we are closely watching the recent situation.' He added, 'With the awareness that there is no future for Korean cinema if the field collapses, we will actively look for available policy tools so the impact on the industry can be minimized.'

The ministry said distribution companies and consigned-theater representatives raised concerns about management effects and industry spillover effects following Megabox's start of the rehabilitation procedure. It said they asked the government to take an active role in minimizing repercussions for the film industry.

According to the ministry, Megabox applied for a corporate rehabilitation procedure at the Seoul Rehabilitation Court on June 14 after a liquidity crisis at its parent JoongAng Group. The court issued a preservation order and a comprehensive prohibition order the next day, June 15.

The ministry said the government has operated a 'film industry impact and difficulties reception center' since June 25 to receive industry opinions. It said it plans to hold a briefing for related companies on the rehabilitation procedure soon and also support specialized legal counseling for filing creditor claims.