Jing Yi Zhong Fa Fa [2019] No. 437
To all departments,
To fully implement the requirements of the CPC Central Committee, Beijing Municipal Committee of CPC, the Supreme Court and the Municipal High Court to optimize the business environment in the legal aspect, improve insolvency trials, improve the level of professionalism and standardization of bankruptcy and reorganization trials, ensure the advancement of marketization and legalization in bankruptcy and reorganization procedures, and help continue to optimize the business environment in the capital, Beijing Bankruptcy Court, in light of the actual work, has hereby formulated the Standards of Beijing Bankruptcy Court for Handling Insolvency Reorganization Cases (Trial), which was deliberated on and adopted by our 11th Judicial Committee in 2019. The Standards are issued hereby for your observation.
Beijing No. 1 Intermediate People's Court
December 30, 2019
Standards of Beijing Bankruptcy Court for Handling Insolvency Reorganization Cases (Trial)
Chapter I General Provisions
Article 1 To correctly apply the law, regulate the trial of insolvency reorganization cases, protect the legitimate rights and interests of creditors, debtors and other participants in insolvency reorganization, safeguard the order of the socialist market economy and the public interest, give full play to the functions of the insolvency reorganization system, and continuously optimize the doing business environment, these Standards are formulated in accordance with the Enterprise Bankruptcy Law of the People's Republic of China, the Company Law of the People's Republic of China, the Civil Procedure Law of the People's Republic of China and other laws and relevant judicial interpretations, and based on the actual situation of insolvency reorganization trials in Beijing.
Article 2 Beijing Bankruptcy Court shall make full use of the insolvency reorganization system to actively rescue the distressed enterprises with reorganization value and possibility.
Article 3 Insolvency reorganization cases shall be heard based on the principle of law, fairness and efficiency, and respect the business rules and the autonomy of market entities, and give full play to the philosophy of judicial activism and the spirit of innovation.
Article 4 Beijing Bankruptcy Court has jurisdiction over the case of insolvency reorganization of an enterprise legal person in this city where the debtor has its domicile.
The case of substantial merger and reorganization of affiliated enterprises, in which the core control enterprise of the affiliated enterprise has its domicile in Beijing, shall be under the jurisdiction of Beijing Bankruptcy Court. If the core control enterprise is unclear but the main property of the affiliated enterprises is located in Beijing, the case shall be under the jurisdiction of Beijing Bankruptcy Court.
Any dispute over jurisdiction between the people's courts shall be reported to a joint higher people's court for designation of jurisdiction.
Chapter II Petition for Review
Section A Petition for Reorganization
Article 5 The debtor may be reorganized in accordance with the Enterprise Bankruptcy Law if it has any reason for reorganization under any of the following circumstances:
1. The debtor is unable to pay off debts falling due and its assets are insufficient to pay off all debts;
2. The debtor is unable to pay off debts falling due and obviously lacks liquidity;
3. The debtor is highly likely to lose its liquidity.
Article 6 Where the debtor is unable to pay off debts falling due, its creditors may file a petition for reorganization with a people's court.
If the debtor has reasons for reorganization, it may file a petition for reorganization with a people's court.
If a listed company has reasons for reorganization, the stockholders holding more than one tenth of the shares of the listed company may file a petition for reorganization of the listed company with a people's court.
Article 7 After the acceptance of the winding up petition and before the adjudication of bankruptcy, the creditor, the debtor or the contributors whose contributions account for more than one tenth of the registered capital of the debtor may file a petition for reorganization with a people's court.
Article 8 If any financial institution such as a commercial bank, a securities company or an insurance company has a reason for reorganization, the financial institution or the financial regulator under the State Council may file a petition for reorganization of the financial institution with a people's court.
Article 9 Where creditors file a petition for reorganization with a people's court, they shall submit the following documents:
1. Petition for insolvency reorganization, which shall specify the basic information of the applicant and the respondent, the facts and reasons for the petition, etc.;
2. Proofs of subject qualification of the applicant and the respondent;
3. Facts about the occurrence of the claims, and evidence of claims' nature, amount and whether or not the claims are secured;
4. Evidence that the debtor is unable to pay off debts falling due;
5. Description of the debtor's reorganization value and possibility;
6. Report on the possibility of reorganization of the listed company, notification materials submitted by the provincial people's government of the place where the listed company has its domicile to the securities regulator, opinions of the securities regulator, pre-plan for maintaining stability issued by the people's government of the place where the listed company has its domicile, and evidence that the creditors have informed the listed company of the petition, in case of petition for reorganization of a listed company;
7. Other materials related to the facts and reasons for the petition.
Article 10 Where the debtor files a petition for reorganization with a people's court, it shall submit the following documents:
1. Petition for insolvency reorganization, which shall specify the basic information of the applicant, the facts and reasons for the petition, etc.;
2. Proof of the debtor's subject qualification and the debtor's annual report of the latest year;
3. Approval documents of the petition for reorganization issued by a debtor's authority such as the shareholders' meeting or shareholders' assembly a. If the debtor is a foreign-invested enterprise, it may submit a document stating the board's approval of the petition for reorganization in accordance with the laws and regulations and the articles of association of the enterprise.
If the debtor is a wholly state-owned proprietorship or a wholly state-owned corporation, it shall submit a document specifying the consent of the organization that performs the duties as a contributor for the debtor to the petition for reorganization;
4. List and contact information of the debtor's legal representative or principals, as well as list and contact information of the debtor's directors, supervisors, executives and heads of other administrative departments;
5. Description of property status;
6. List of debts, specifying each creditor's name, domicile, contact information, amount of debts, nature of debts, date of establishment of debts and circumstances of demanding debts;
7. List of claims, specifying each debtor's name, domicile, contact information, amount of claims, nature of claims, date of establishment of claims and the situation of demanding;
8. Relevant financial and accounting reports;
9. Relevant litigations, arbitrations and enfoncements;
10. Staffing situation and staff resettlement plan, which shall set forth debtor's plan of legal compensation for the employees whose labor contracts with the debtor have been terminated. If the debtor is a state-owned enterprise, the staff resettlement plan shall specify the basic conditions of the employees to be resettled, as well as the obstacles and solutions of the resettlement, and the debtor shall also provide the document required to submit the plan to the organization that performs the duties as a contributor for the debtor for record;
11. Payment of salaries, social insurance expenses and housing provident funds for employees and executives;
12. Proof of the reorganization value and possibility;
13. Report on the possibility of reorganization of the listed company, notification materials submitted by the provincial people's government of the place where the listed company has its domicile to the securities regulator, opinions of the securities regulator, and pre-plan for maintaining stability issued by the people's government of the place where the listed company has its domicile, in case of petition for reorganization of a listed company;
14. Other materials related to the facts and reasons for the petition.
Article 11 Where a contributor of a debtor files a petition for reorganization, the materials shall be submitted to the people's court with reference to the circumstances in which the debtor applies for reorganization.
Article 12 Commercial banks, securities companies, insurance companies and other financial institutions or their contributors who files for reorganization of the financial institution, in addition to submitting materials in accordance with Articles 10 and 11 of the Standards, it shall also submit to the approval opinions of the financial regulator under the State Council.
Section B Review of Reorganization Identification
Article 13 If there is evidence to prove that the debtor is under any of the following circumstances, the debtor shall be deemed to be "highly likely to lose its liquidity" as mentioned in Paragraph 3, Article 5:
1. The debtor is insolvent and can hardly continue its business;
2. The debtor will be continuously unable to pay off the debts due to the repayment of large amounts of due debts, compulsory execution and other reasons;
3. Due to market, policy, personnel and other reasons, the debtor's operation is about to face difficulties and cannot be overcome without reorganization;
4. Other reasonable possibility that the debtor is highly likely to lose its liquidity.
Article 14 During the review of the petition, the people's court shall, based on the available documents and the existing circumstance, identify whether the debtor has the reason for reorganization, and preliminarily determine whether the debtor has certain reorganization value and possibility.
Article 15 The people's court can determine whether the debtor has reorganization value and possibility by reviewing documents, conducting investigation and inquiry, organizing hearings, or soliciting opinions from Professional social agency or professional individuals or any third party with mastery of professional technical knowledge, understanding of industry market conditions, and business judgment capabilities. If pre-reorganization is conducted, the pre-reorganization administrator's pre-reorganization reported can be used as a reference by the court.
Article 16 If, in consideration of the reorganization cost, the debtor's value as a going concern is still greater than the liquidation value, the debtor can be deemed to have the reorganization value. The debtor may be deemed to have no reorganization value under any of the following circumstances:
1. It can be reasonably estimated that the debtor has lost the business value or the value as a going concern is very low according to the elements of market, resources, social public functions etc.;
2. The cost of reorganization is obviously too high;
3. After the reorganization, the debtor's industry belongs to the production capacity and industry that should be eliminated and dissolved according to the needs of the national industrial policy or the function of the capital location;
4. Other circumstances without reorganization value.
Article 17 The debtor shall generally be deemed to have no possibility of reorganization under any of the following circumstances:
1. The reorganization has insurmountable legal obstacles;
2. The business plan is obviously not commercially viable;
3. Other circumstances without reorganization possibility.
Section C Registration and Filing
Article 18 Beijing Bankruptcy Court is responsible for receiving the documents of the petition for reorganization and issuing written confirmation.
Article 19 Beijing Bankruptcy Court shall conduct formalities review of the petition documents for reorganization in accordance with the law. If it is considered to be in accordance with the law after review, "Po Shen" shall be used as the type of case to prepare the case number for registration and filing. If the petition formalities do not conform with the provisions of the law, the applicant shall be informed of the need to supplement or correct the necessary documents within the time limit, and the time taken in the supplementation or correction shall not be included in the period for reviewing the petition for reorganization.
Article 20 The people's court shall, within five days from the date of registration and filing, notify the reorganization applicant of the composition of the collegial panel. If the applicant is not the debtor, it shall notify the debtor of the petition for reorganization and the composition of the collegial panel within five days from the date of registration and filing.
Article 21 If the creditor files a petition for reorganization, the debtor that dissent from the petition may, within seven days from the date of receiving the notice from the people's court, file a written dissent with the people's court on the grounds of jurisdiction of the filing court, the applicant's eligibility, the debtor's subject qualification and the reasons for reorganization etc..
Article 22 Before the petition for reorganization is accepted, if the applicant requests to withdraw the petition, the people's court shall make a decision on whether to grant such application.
Article 23 During the review of the petition, the people's court may organize a hearing on the petition for reorganization. The people's court shall generally organize a hearing under any of the following circumstances:
1. Reorganization of listed companies or financial institutions;
2. Reorganization of affiliated enterprises;
3. Decision on whether pre-reorganization is necessary;
4.Difficult to determine whether there are reasons for, or any reorganization possibility or organization value;
5. Debtor reorganization involves national interest or public interest.
Article 24 The hearing is generally attended by the following persons:
1. The applicant;
2. The legal representative, financial officer and other management personnel of the respondent;
3. Provisional administrator of pre-reorganization;
4.Investors for reorganization;
5. Other persons whom the people's court deems necessary to attend the hearing.
With the permission of the people's court, the relevant regulator governing the debtor, individuals or organizations capable of providing professional advice, creditors, contributors, actual controllers and other stakeholders may attend the hearing.
Article 25 Minutes of the hearing shall be made and signed by the judges and attendees.
Article 26 The hearing period is not included in the period of reviewing the petition for reorganization.
Chapter III Pre-reorganization
Article 27 The "pre-reorganization" referred to herein means a process that the court appoints a provisional administrator to perform the duties specified in Article 36, the debtor voluntarily undertakes the obligations specified in Article 38, and the provisional administrator organizes the debtor, creditors, contributors, reorganization investors and other stakeholders to formulate the pre-reorganization plan, after filing the case by "Po Shen" number and before accepting the petition for reorganization, in order to accurately identify the value and possibility of reorganization, reduce the cost of reorganization, and increase the success rate of reorganization.
Article 28 The "pre-reorganization plan" herein refers to an agreement reached in the pre-reorganization process between the debtor and the creditors, contributors, reorganization investors and other stakeholders, through voluntary and equal commercial negotiations concerning the classification, adjustment and pay off of the claims , the adjustment of contributors' rights and interests, the management and operation of the debtor, and other contents that are conducive to the debtor's reorganization. The pre-reorganization plan shall be formulated with reference to Paragraphs 1 and 2 of Article 97.
Article 29 During the review of the petition, if the debtor undertakes in writing to accept the investigation and supervision by the provisional administrator in the pre-reorganization process and perform the obligations related to the pre-reorganization, the people's court may decide to pre-reorganize the debtor.
Article 30 Where all pre-reorganization participants, including all creditors, have agreed to the pre-reorganization plan, and the applicant requests to withdraw the petition for reorganization and calls for out-of-court reorganization by all parties, the people's court shall, in general, rule for approval.
Article 31 The provisions of this section on pre-reorganization shall not apply during bankruptcy liquidation. If the creditors, debtor or its contributors intend to file a petition for reorganization during bankruptcy liquidation, the administrator may introduce the investors, organize the parties to negotiate and draw up an agreement related to the reorganization, or prepare the reorganization petition documents.
Article 32 If the people's court rules on pre-reorganization, it shall appoint a provisional administrator and make a written decision according to the procedures of appointing an administrator in the reorganization process. The written decision shall be served on the provisional administrator, the reorganization applicant and the debtor.
Article 33 The period of pre-reorganization shall be from the date when the people's court decides on pre-reorganization to the date when the provisional administrator submits the pre-reorganization report. The period of pre-reorganization is not included in the period for reviewing the petition for reorganization.
Article 34 Articles 58, Articles 59 and Articles 60 shall apply to the appointment of the provisional administrator in the pre-reorganization process.
Article 35 If, before the people's court appoints the provisional administrator randomly or by competition, the debtor, major creditors and reorganization investors have agreed to recommend an intermediary in the list of Beijing's enterprise bankruptcy administrators as the provisional administrator and such intermediary does not violate the provisions of Article 24 of the Enterprise Bankruptcy Law, the people's court may appoint the recommended intermediary as the provisional administrator.
In the case of reorganization of a financial institution prescribed in Paragraph 1, Article 134 of the Enterprise Bankruptcy Law, if the financial regulator under the State Council recommends a provisional administrator, the preceding paragraph may apply.
Article 36 During the pre-reorganization period, the provisional administrator shall perform the following duties:
1. Investigate thoroughly the debtor's basic situation, assets and liabilities, and involvement in litigation and execution;
2. Promptly notify all known executive courts to suspend all execution procedures of the debtor's property, if the execution case is transferred for review of bankruptcy reorganization;
3. Ascertain whether the debtor has reorganization value and possibility;
4. Supervise the debtor's performance of the obligations stipulated in Article 38 and report to the people's court in time;
5. Clarify the overall direction of reorganization, and organize the debtor, its contributors, creditors, (potential) reorganization investors and other stakeholders to negotiate and formulate the pre-reorganization plan;
6. Guide and assist the debtor in introducing reorganization investors as required;
7. Submit to the people's court a petition for the termination of the pre-reorganization process or a report on the pre-reorganization work as the circumstances may require.
Article 37 During the pre-reorganization period, the provisional administrator shall perform its duties diligently and faithfully according to law and report to the people's court. Each pre-reorganization participants can submit its dissent to the court if it considers that the provisional administrator violates the law, performs its duties unjustly, or has other being incompetent situations.
The debtor and creditors may submit the written application to the court of replacement of the provisional administrator, to which the provisional administrator can make corresponding explanation. The people's court shall decide whether to permit the replacement application.
Article 38 During the pre-reorganization period, the debtor shall perform the following obligations:
1. Properly keep the property, seals, account books, documents and other materials, and cooperate with the people's court in adopting property preservation measures in accordance with Paragraph 1, Article 39 of the Standards;
2. Make proper decisions on operational affairs and internal management affairs, in the case of continuing the debtor's operation;
3. Cooperate with the provisional administrator's investigation, report to the provisional administrator the acts and matters that may have a significant impact on the property in a timely manner, and accept the supervision of the provisional administrator;
4. Truthfully disclose information that may affect the decision of stakeholders on the pre-reorganization plan, interpret the pre-reorganization plan and answer the relevant inquires;
5. Stop paying off debts, except where the repayment benefits the property of the debtor or is made through litigation, arbitration or execution procedures;
6. Negotiate with contributors, creditors, (potential) reorganization investors and other stakeholders to formulate the pre-reorganization plan;
7. Other obligations to be performed according to the law.
Article 39 During the pre-reorganization period, the people's court can, on the basis of the requests of the provisional administrator, the debtor or the creditors, order to adopt preservation measures against all or part of the debtor's property if the act of any stakeholder or other reasons may impede the reorganization process.
In the case of an application filed by a creditor, the people's court can require the creditor to provide security，otherwise the application shall be overruled by the court.
If there is an error in the application, the applicant shall compensate the debtor for the losses incurred by the property preservation.
Article 40 In the cases of reorganization of large enterprises involving many creditors, the provisional administrator can organize the creditors to establish a provisional creditors' committee in accordance with the relevant provisions of the Enterprise Bankruptcy Law on creditors' meeting, in order to facilitate the solicitation of opinions, disclosure of information and other work related with the pre-reorganization. When necessary, the provisional administrator can file to the people's court for an investigative hearing during the pre-reorganization period.
Article 41 Where the pre-reorganization plan involves the adjustment of contributors' rights and interests, the contributors shall undertake the obligations to truthfully disclose any litigation involved in such rights and interests, and the debtor and the contributors shall undertake the obligation to truthfully disclose the pledge, the preservation and any other encumbrance involved in the rights and interests of their contributions.
Article 42 If the information disclosed by a pre-reorganization participant in the pre-reorganization process is disclosed by other participants or the provisional administrator which is in violation of legal provisions or the confidentiality obligation agreed by the parties, the other participants or the provisional administrator shall be liable for compensating the loss caused by such violation according to the law.
Article 43 During the pre-reorganization period, if the provisional administrator finds any of the following circumstances through investigation, it shall file a termination application of the pre-reorganization process to the people's court in a timely manner, in which stipulates the facts and reasons. The people's court can decide to terminate the pre-reorganization process after review, and make a ruling on whether to accept the petition for reorganization within the statutory time limit:
1. The debtor has no ground for reorganization;
2. The debtor has no reorganization value;
3. There is no possibility of reorganization for the debtor;
4. The debtor is under the circumstances prescribed in Articles 31, Articles 32 and Articles 33 of the Enterprise Bankruptcy Law, and other circumstances that may seriously damage the interests of the creditors;
5. The debtor refuses to perform the obligations stipulated in Article 38 hereof, resulting in the failure to realize the purpose of pre-reorganization;
6. The debtor is unable to pay the necessary fees for pre-reorganization and no one can make payment for the debtor.
Article 44 Except as provided in Article 43, the provisional administrator shall submit the pre-reorganization report to the people's court after the pre-reorganization is completed. The report shall state the provisional administrator's performance during the pre-reorganization period and shall include at least the following contents:
1. The provisional administrator's investigation of the debtor and analysis of the causes for the debtor's distress;
2. The analysis and judgment of the reorganization value and possibility of the debtor. The provisional administrator shall propose the major risks of reorganization failure and the relevant countermeasures, provided it believes that the debtor has reorganization value and possibility;
3. The contents and negotiation of the pre-reorganization plan, or the reasons for failing to formulate the pre-reorganization plan.
Article 45 The people's court shall, after receiving the pre-reorganization report, make a ruling on whether to accept the petition for reorganization within the statutory time limit.
Article 46 After the petition for reorganization is accepted, the debtor or the administrator shall generally draw up a reorganization draft plan based on the pre-reorganization plan and submit it to the people's court and the creditors' meeting.
Article 47 If the pre-reorganization plan is consistent with the reorganization draft plan prepared in the reorganization process, the consent of the contributors and creditors to the pre-reorganization plan shall be deemed as voted consent to the reorganization draft plan, except the following situations:
1. If the reorganization draft plan modifies the contents of the pre-reorganization plan, which thus adversely affecting relevant right holders, such affected right holders shall have the right to revote on the reorganization draft plan;
2. If the debtor conceals important information or discloses false information before the pre-reorganization plan is voted on, or major changes take place after the pre-reorganization plan is voted on, which may affect the voting of the right holders, the right holders shall have the right to revote on the reorganization draft plan.
The provisional administrator shall inform the contributors and creditors of the contents of the preceding paragraph before they express their approval or dissent to the pre-reorganization plan.
Article 48 After the petition for reorganization is accepted, the people's court can designate the provisional administrator as the administrator of the reorganization case. The court shall re-designate an administrator where the provisional administrator is under the circumstances specified in Article 33 and Articles 34 of the Provisions of the Supreme People's Court on the Appointment of Administrator for the Trial of Enterprise Insolvency Cases, or where there is other evidence to prove that the provisional administrator is unable to perform its duties in accordance with the law or perform impartially or under other incompetent circumstances for its duties.
Article 49 During the pre-reorganization period, the provisional administrator may entrust a third-party professional organization or individual as stipulated in Article 15 to assist in the analysis of the debtor's reorganization value, the possibility of reorganization and the feasibility of the pre-reorganization plan. Such organization or individual may participate in the negotiation on the pre-reorganization plan. If the expenses need to be paid, it shall be borne by the provisional administrator and pre-reorganization participants through negotiations. If the negotiations fail, the provisional administrator shall bear the expenses.
The provisional administrator may entrust the third party specified in the preceding paragraph to introduce the reorganization investors. If the expenses need to be paid, they shall be borne by the reorganization investors.
Article 50 During the pre-reorganization period, the necessary expenses for the provisional administrator's performance shall be borne by the provisional administrator and pre-reorganization participants through negotiation. If the negotiation fails, the debtor shall pay the expenses at any time. If the debtor fails to pay the expenses in a timely manner or the property of the debtor is insufficient to pay the expenses, and such expenses are paid by the provisional administrator or any other person for the debtor before the acceptance of the reorganization petition, the same expenses may be included in the insolvency expenses and reviewed by the creditors' meeting upon claim by the relevant right holders after the acceptance of the reorganization petition.
Article 51 During the pre-reorganization period, the provisional administrator shall not collect pre-reorganization remuneration.
Where the people's court rules to accept the petition for reorganization after the pre-reorganization process is completed, the people's court shall, after the administrator's remuneration has been reviewed by the creditors' meeting, determine or adjust the remuneration plan in accordance with Article 9 of the Provisions of the Supreme People's Court on Determining the Remuneration of Administrators in the Trial of Enterprise Insolvency Cases and based on the provisional administrator's actual performance of duties and the performance effect during the pre-reorganization period. The administrator's remuneration plan shall be included in the reorganization draft plan.
If the people's court decides to re-appoint an administrator when accepting the petition for reorganization, the pre-reorganization remuneration shall be determined by the people's court. The pre-reorganization remuneration falls in the category of insolvency expenses stipulated in Article 41 of the Enterprise Bankruptcy Law.
If, after the conclusion of the pre-reorganization process, the people's court decides not to accept the petition for reorganization, or if, in the pre-reorganization process, the people's court decides to permit the applicant to withdraw the petition, the provisional administrator's remuneration shall be determined according to the prior or subsequent negotiation between the provisional administrator and the pre-reorganization participants.
Chapter IV Period of Reorganization
Section A Ruling on Reorganization
Article 52 If the creditors file a petition for reorganization, the people's court shall, within 10 days from the date of expiration of the debtor's dissent, rule whether to accept the petition.
Except for the circumstances specified in the preceding paragraph, the people's court shall, within 15 days from the date of receiving the petition for reorganization, rule whether to accept it or not.
If the time limit prescribed in the preceding two paragraphs needs to be extended under special circumstances, it may be extended by 15 days upon approval by the people's court at a higher level. During the petition review period, the time cost by the applicant to supplement or correct the documents, the time cost by the people's court to organize the hearing and designate the administrator, and the period of pre-reorganization shall not be included in the time limit for ruling whether to accept the petition as provided in the preceding two paragraphs.
Article 53 The debtor and each stakeholder can conduct out-of-court reorganization through voluntary negotiations. The court can make ruling of accepting the reorganization petition if the court considers that the agreement reached out-of-court regarding the reorganization which is prior to the acceptance of the insolvency petition conforms to the provisions of the law and Article 97 of the Standards after such agreement being duly reviewed by the court.
Article 54 The people's court shall overrule the reorganization petition if it considers the petition is under any of the following circumstances after the petition being duly reviewed:
1. The applicant is not qualified to file a petition for insolvency, or the debtor is not qualified as the subject of insolvency;
2. The petition for reorganization has not been approved or permitted by relevant authorities according to the law;
(3) The debtor has no reason for reorganization;
(4) The debtor obviously has no reorganization value;
(5) There is obviously no reorganization possibility.
Article 55 If the people's court rules not to accept the petition for reorganization, it shall, within five days from the date of ruling, serve the ruling on the applicant and explain the reasons. If the applicant dissents from the ruling, it may file an appeal to the people's court at a higher level within 10 days from the date of the ruling is served.
Article 56 The people's court shall rule to accept the petition for reorganization according to the law and serve the ruling on the applicant within five days from the date of ruling, otherwise provided in Article 54. If the applicant is not the debtor, the people's court shall also serve the ruling on the debtor within five days from the date of ruling.
Article 57 If the people's court rules to accept the petition for reorganization, it shall designate an administrator at the same time.
Article 58 The administrator is generally designated in the list of administrators randomly. After the hierarchical management of administrators is completed in Beijing, the administrator shall be designated randomly among the administrators of Level I in general. As for simple reorganization cases, the administrator may also be designated randomly among the administrators of Level II.
Article 59 For any reorganization case involved with significant influence, complicated legal relations or large number of stakeholders, the administrator can be appointed through an open competition.
Article 60 The people's court shall designate the administrator from the list of administrators, except that an administrative liquidation group has been established by a financial institution in accordance with relevant laws and regulations before the acceptance of the reorganization petition, or that the people's court has designated a social intermediary agency to set up the liquidation group in the compulsory liquidation procedure of the company.
Article 61 For the pre-reorganization process, Article 48 shall apply to the designation of the administrator of reorganization case.
Article 62 If the court rules to accept the reorganization petition after the acceptance of the winding up petition and before the insolvency declaration, the administrator during the insolvency liquidation period may act as the administrator during the reorganization period.
Article 63 The period of reorganization is from the date when the people's court decides to accept the petition for reorganization to the termination of the reorganization process.
Article 64 If the applicant is not the debtor, the administrator shall notify the debtor to submit to the people's court, within 15 days from the date of service of the acceptance ruling of the reorganization petition, a statement of property status, a list of debts, a list of claims, relevant financial and accounting reports, as well as the payment of employees' salaries and the payment of social insurance expenses.
Article 65 After the petition for reorganization is accepted, if the applicant requests to withdraw the petition, the people's court shall not grant permission.
Article 66 Where the people's court accepts the reorganization petition against the debtor from the creditors, the court can overrule the petition if it finds that the debtor is not in conformity with the circumstances stipulated in Article 5 after being reviewed, If the applicant is dissent from such ruling, it can file an appeal to the people's court at a higher level within 10 days from the date of service of the ruling.
Section B Operation and Management during Reorganization Period
Article 67 If the people's court rules to reorganize the debtor, the administrator shall perform its general duties of property investigation, review of claims, proposal and organization of creditors' meeting, and participation in litigation on behalf of the debtor and any other general duties in insolvency cases.
Article 68 During the reorganization period, if the debtor applies for self-administration of property and business affairs under the supervision of the administrator, the administrator shall submit written opinions to the people's court concerning whether the debtor has a relatively well established internal governance structure and mechanism, whether the debtor has practical measures in place for self-administration, and whether the debtor is possible to have the acts prescribed in Articles 31, 32 and 33 of the Enterprise Bankruptcy Law and other acts that seriously damage the interests of creditors.
Article 69 The people's court can approve its application of self-administration from the debtor if the following conditions are met:
1. The debtor's internal governance mechanism is still functioning normally;
2. The debtor's self-administration is conducive to the debtor's continuity of business;
3. The administrator's supervision plan and the debtor's self-administration plan are feasible;
4. The debtor does not conceal, transfer property or otherwise fail to cooperate with the reorganization;
5. The debtor does not commit any other acts that seriously harm the interests of creditors.
The people's court that approves or overrules the debtor's application for self-administration shall issue a written decision.
Article 70 If the people's court approves the debtor's self-administration and the administrator has already taken over the property and business affairs of the debtor, the administrator shall hand over the property and business affairs to the debtor in a timely manner. With regard to market operation and enterprise governance, the authority and executing agency of the debtor shall continue to exercise their duties and undertake their obligations, except for the following circumstances:
1. The debtor and the administrator has divided their duties with the prior approval of the people's court;
2. The duties shall be performed by the people's court, creditors' meeting, creditors' committee or the administrator provided in law or considered by the people's court
3.Other rights that the people's court considers are inappropriate to be exercised by the debtor practicing self-administration.
The plan of division of administration stipulated in the first subparagraph of the preceding paragraph shall not handover to the debtor the duties of property investigation, review of claims, proposal of a creditors' meeting, exercise of the right to revoke bankruptcy and the right of claiming for confirmation of the invalidity of the act, recovery of contributions of contributors, and claims on the accountabilities of directors, supervisors or executives.
Article 71 If the debtor practices self-administration, the administrator shall perform the following duties in addition to the general duties prescribed in Article 67:
1. Request to change the plan of the debtor's self-administration and submit to the people's court for approval;
2. Supervise the debtor's operation and management, and supervise the debtor to prevent from major property risks;
3. Provide favorable conditions for the negotiation and preparation for the reorganization draft plan;
4. Guide and urge the debtor to prepare and submit the reorganization draft plan according to the law;
5. Other duties that shall be performed by the administrator provided in law, agreed by the parties or considered by the people's court.
Article 72 If the people's court approves the debtor's self-administration, the administrator shall formulate a specific supervision system. It is not necessary for the administrator to open an administrator account, but engraving an administrator seal is still required.
The people's court can, on the basis of the debtor's application and the administrator's review opinion, approve the division of management between the debtor and the administrator.
If the debtor does not apply for self-administration, or if the application for self-administration is not approved, the administrator shall be responsible for the property management and business affairs during the reorganization period.
Article 73 If the administrator is responsible for the property management and business operation during the reorganization period, the original authority of the debtor will no longer exercise its duties.
Article 74 Where the administrator intends to perform the following acts after the first creditors' meeting, a property management or realization plan shall be prepared in advance and submitted to the creditors' meeting for discussion and voting:
1. Transfer of the interests in land, premise and other immovable property;
2. Transfer of exploration right，mining right，intellectual property rights and other property rights;
3. Transfer of all inventory or business;
4. Loan;
5. Setting property guarantee;
6. Transfer of claims and securities;
7. Performance of a contract which has not been fully performed by either the debtor or the other party;
8. Waiver of rights;
9. Retrieval of collateral;
10. Other disposal of property that has a significant impact on the interests of creditors.
If the creditors' meeting does not vote for the debtor's property management or realization plan, the people's court shall make a ruling.
Before the first creditors' meeting is summoned, the administrator shall obtain the prior permission of the people's court if it is necessary to carry out the provisions prescribed in the first paragraph of this article.
Article 75 The administrator or the debtor practicing self-administration shall report to the creditors' committee in writing in advance before performing the act of disposal prescribed in Paragraph 1 of Article 74. If a creditor committee is not established, a written report shall be submitted to the people's court in advance. The creditors' committee and the people's court are entitled to request the administrator and relevant personnel of the debtor to provide explanations or relevant documents of their duties.
If the creditors' committee considers that the act of disposition is not in conformity with the property management or realization plan, it is entitled to demand the debtor or administrator who has performed the act to correct. If the debtor or administrator refuses to correct, the creditors' committee may request the people's court to make a decision.
If the people's court considers that the act of disposition is not in conformity with the property management or realization plan, it shall order to stop the act of disposition, and the debtor or administrator who has performed the act shall correct it, or submit it to the creditors' meeting for approval by a new vote, or implement it again after the people's court makes a ruling.
Article 76 If the administrator discovers that the debtor practicing self-administration has committed an act that seriously damaged the interests of creditors or other circumstances that are not suitable for self-administration involved in, it shall file a petition with the people's court for a decision to terminate the debtor's self-administration. If the people's court decides to terminate the debtor's self-administration, it shall notify the administrator to take over the property and business affairs of the debtor.
Where the debtor is found to be involved in any of the circumstances mentioned in the preceding paragraph, but the administrator does not file a petition, the creditors and other stakeholders may file a petition with the people's court.
Article 77 Before the first creditors' meeting is summoned, the administrator or the debtor practicing self-administration shall decide to continue or cease the business of the debtor abide by the principle conducive to the realization of the reorganization purpose, and submit an analytical report to the people's court for approval.
Article 78 After the first creditors' meeting is held, the creditors' meeting shall decide to continue or stop the business of the debtor.
Article 79 The administrator or the debtor practicing self-administration may, with the permission of the people's court, hire necessary employees. If the employment expenses are included in the insolvency expenses, it shall be submitted to the creditors' meeting for review.
Article 80 Where the administrator is responsible for the management of the debtor's property and business affairs, it may, with the permission of the people's court, appoint the debtor's operating and administrative personnel to take charge of the business affairs. Where a law firm or an accounting firm employs other social intermediary agencies or individuals of the same professional area to assist in the performance of the administrator's duties, the necessary expenses shall be paid from its remuneration. If a insolvency liquidation firm employs other social intermediary agencies or individuals to assist in the performance of the administrator's duties, the necessary expenses shall be paid from its remuneration.
Article 81 When the people's court determines or adjusts the remuneration plan for the administrator, the remuneration of the administrator responsible for the management of the debtor's property and business affairs shall be higher than that where the debtor practices self-administration.
Article 82 During the period of reorganization, the contributors of the debtor shall not request the distribution of investment income. The administrator shall supervise that the debtor practicing self-administration shall not distribute the investment income.
Article 83 During the reorganization period, if any director, supervisor or executive of the debtor applies for the transfer of equity to a third party other than other directors, supervisors or executives, the administrator shall submit written review opinions and reasons to the people's court for approval. No transfer may be made without the consent of the people's court.
Article 84 The administrator or the debtor practicing self-administration shall determine in a timely manner during the reorganization period whether the debtor's property with a security interest is necessary for the reorganization.
Article 85 If the administrator or the debtor practicing self-administration considers that the security is necessary for the reorganization of the debtor, the exercise of the security right shall be suspended. However, if the secured creditor believes that there is a possibility of damage to or a marked reduction in the value of the security, which is sufficient to prejudice its rights, it may file a petition with the people's court for the resumption of the exercise of the security right. The administrator may organize the stakeholders to negotiate with the secured creditor to suspend the realization of the security right.
If the secured creditor requests to resume the exercise of the security right in accordance with the preceding paragraph, the people's court shall make a ruling within 30 days from the date of receiving the petition.
Article 86 Where the administrator or the debtor practicing self-administration has evidence proves that the security is necessary for reorganization and that there are no circumstances that would jeopardize the security right, or where the administrator or the debtor practicing self-administration has provided security or compensation worth of the reduced value, notwithstanding the existence of circumstances that jeopardize the security right, the people's court shall, within 30 days from the date of receiving the petition for the resumption of the exercise of the security right, rule not to approve it. If the secured creditor refuses to accept the ruling, it may, within 10 days from the date of receiving the ruling, file a reconsideration with the people's court that made the ruling.
Article 87 Where the administrator or the debtor practicing self-administration considers that the security is not necessary for the reorganization of the debtor, or the people's court rules to approve the resumption of the exercise of the security right, the administrator or the debtor shall promptly prepare the property realization plan and submit it to the creditors' meeting for voting, and promptly implement the resolution of the creditors' meeting or the ruling of the people's court. The proceeds from the disposal of the security shall, after the payment of relevant expenses, have priority in paying off the claims of the secured creditor.
The administrator or the debtor practicing self-administration shall follow the principle of maximizing the property value of the debtor and fully hear the opinions of the secured creditor when formulating the realization plan.
Article 88 Where the right holder of the property lawfully possessed by the debtor claims it back during the period of reorganization, such claim shall comply with the conditions agreed upon in advance.
If the property claimed by the right holder is necessary for the reorganization, the administrator may organize the stakeholders to negotiate with the right holder to retain the property and give reasonable compensation.
Article 89 During the period of reorganization, the administrator or the debtor practicing self-administration may, in accordance with Article 74 of this Standards, get loans for the purpose of continuity of business or other purposes benefiting the property of the debtor. The people's court shall support the lender's claim for repayment according to the loan contract with reference to Paragraph 4, Article 42 of the Enterprise Bankruptcy Law on common benefits debts. The administrator or the debtor shall report to the creditors' committee or the people's court in a timely manner in accordance with Article 75 before paying off the common benefits debts.
Article 90 Where the administrator or the debtor practicing self-administration get loans for the purpose of business continuity, the loan may be secured.
Article 91 The administrator, debtor, creditors and other reorganization stakeholders can recommend or introduce reorganization investors through negotiation. The people's court, the administrator or the debtor practicing self-administration can also decide to publicly recruit reorganization investors as required.
Article 92 Investors who intend to participate in the reorganization shall submit specific reorganization plans. After the reorganization investor is finally selected, its commitments made in the reorganization plan will be binding. The reorganization plan shall include the solution after reorganization failure.
Chapter V Formulation and Approval of Reorganization Plan
Section A Formulation and Voting of Reorganization draft plan
Article 93 If the debtor manages its property and business affairs on its own, the debtor shall make the reorganization draft plan, and the administrator shall provide necessary guidance and assistance in addition to the performance of its supervision duties. In the process of formulation of the reorganization draft plan, if the administrator considers the draft to be illegal or not feasible, it shall give suggestions on modification to the debtor.
If the administrator is responsible for the management of property and business affairs, the reorganization draft plan shall be prepared by the administrator.
Article 94 The administrator or the debtor practicing self-administration shall submit the reorganization draft plan to the people's court and the creditors' meeting within six months from the date of the acceptance of reorganization.
When the time limit prescribed in the preceding paragraph expires, the people's court can, at the request of the debtor or the administrator, order an extension period of three months provided the request is justified.
If the debtor practicing self-administration fails to submit the reorganization draft plan within the last month before the expiration of the time limit specified in the preceding two paragraphs, the administrator shall have the right to submit the reorganization draft plan within the statutory time limit and submit it to the people's court and the creditors' meeting.
If the people's court considers the reorganization draft plan submitted by the debtor practicing self-administration to be illegal or obviously not feasible, or if the voting group fails to adopt the reorganization draft plan, the administrator shall have the right to submit the reorganization draft plan within the statutory time limit.
Article 95 When making the reorganization draft plan, the administrator or the debtor shall fully negotiate with the creditors, contributors, reorganization investors and other stakeholders, and fully consider the opinions of the executives, actual controllers, employee representatives or the labor union. If necessary, it may invite relevant organizations or entrust external professional institutions or individuals to express their opinions on specific matters.
Article 96 When the reorganization draft plan prepared by the debtor is submitted, the administrator shall submit its analytical opinions to the people's court on its legitimacy and feasibility of the reorganization draft plan and whether the legitimate rights and interests of stakeholders are infringed.
Article 97 The reorganization draft plan shall include the followings:
1. The debtor's assets and liabilities;
2. The debtor's business plan;
3. Classification of claims;
4. Plan for the adjustment of claims;
5. Plan for the repayment of claims;
6. Period for the implementation of the reorganization plan;
7. Period for supervising the implementation of the reorganization plan;
8. Significant uncertainties relating to the implementation of the reorganization plan;
9. Other plans conducive to debtor reorganization.
Subparagraph 4 of the preceding paragraph shall clearly identify the voting group whose rights and interests have not been adjusted or affected under the reorganization draft plan. Subparagraph 5 shall include a comparative analysis of the repayment of claims in the scenarios of reorganization and liquidation. The period specified in Subparagraph 7 shall not be shorter than the period specified in Subparagraph 6. If there are reorganization investors, the reorganization draft plan shall state specific arrangements for the investment funds and related responsibilities in case of reorganization failure. The reorganization draft plan shall also specify the burden of litigation costs for reorganization cases.
If the reorganization draft plan involves the adjustment of the rights and interests of the contributors, the contributors participating in the voting shall be obliged to truthfully disclose any litigation related to their contribution rights and interests as well as any encumbrance such as pledge and preservation on their contribution rights and interests. If other information that can affect the reasonable decision of creditors and contributors during the voting is not included in the reorganization draft plan, the administrator and the debtor shall give full explanations before the voting and answer the relevant questions at the creditors' meeting.
Article 98 The comparison and analysis of the repayment of claims in the scenarios of reorganization and liquidation shall also take into account the losses incurred to the creditors due to delayed repayment.
Article 99 Creditors of the following categories of claims shall participate in the creditors' meeting for discussion of the reorganization draft plan and shall be divided into groups for voting on the reorganization draft plan:
1. Claims that have security rights over specific property of the debtor;
2. Labor claims and medical and disability subsidies and pension expenses owed to employees by the debtor, the basic pension insurance and basic medical insurance contributions to be credited to the individual accounts of employees, and compensations that shall be paid to the employees as prescribed by laws and administrative regulations;
3. Taxes owed by the debtor;
4. General claims.
Claims of compensation for personal damage caused by the debtor's infringement may be included in the voting group set forth in Subparagraph 2 of the preceding paragraph for voting, except for the punitive damages involved therein.
Article 100 If the reorganization draft plan sets separately a higher pay off rate for the small-amount claims in the category of general claims, or if there are other necessary circumstances, the people's court can decide to set up a small-amount claims group among the general claims group.
If the reorganization draft plan specifies the repayment of all general claims in different proportions according to the amount of claims, the people's court generally will not set up a separate small-amount claims group.
Article 101 If the claims are of a nature different from that stipulated in Article 99 in accordance with the law, the people's court can, according to the actual situation, set up a corresponding voting group.
Article 102 The reorganization plan shall not include deductions or exemptions of social insurance payments owed by the debtor other than those prescribed in Subparagraph 2, the first paragraph, Article 99.
Article 103 If the creditor fails to declare the claims within the time limit, but manages to do so before the reorganization draft plan is submitted to the creditor's meeting for voting, the administrator shall review the declaration and submit it to the creditor's meeting for verification. If the claims are verified without any objection before the people's court rules that the reorganization process is terminated, the administrator shall submit in time the declaration to the people's court for ruling and confirmation.
Article 104 Representatives of the debtor's contributors can attend and participate in the discussion of the creditors' meeting regarding the reorganization draft plan.
If the reorganization draft plan involves the adjustment of contributors' rights and interests, a contributors' group shall be set up to vote on the matter. The adjustment of contributors' rights and interests may include the requirement for contributors to transfer their equity or increase capital, or the adjustment of contributors' representation in the board of directors.
Article 105 If the creditor transfers the claims during the reorganization period, it shall notify the administrator. The transferee may, in its own name, exercise the rights of the original creditor in the reorganization process from the date of notifying the administrator of the transfer, provided that the views already expressed by the original creditor shall remain valid. In the case where the creditor transfers its claims to multiple transferees in order to control the voting result, the people's court shall determine its voting right according to the status of the claims before the transfer.
Article 106 For the creditors with security rights over specific property, if its priority of compensation for claims cannot pay off after assessment , the creditor may vote in another group on the amount of the remaining claims.
If it is uncertain whether the value of the secured property is sufficient to pay off the secured claims before voting, the creditor may only vote on the full amount of the claims in the secured claims group, except for those who may exercise voting rights in other groups with the amount of claims temporarily determined by the people's court.
Article 107 The people's court shall convene a creditors' meeting within 30 days from the date of receiving the reorganization draft plan, which will vote on the reorganization draft plan. The administrator shall notify all the parties to attend the meeting 15 days in advance.
Before the creditors' meeting prescribed in the preceding paragraph is convened, the people's court shall, in general, first rule to confirm the claims without objection.
If an individual creditor fails to vote on time due to justifiable reasons, the administrator may grant it an extension period of voting which generally shall not exceed 30 days.
Article 108 The creditors' meeting intended to discuss the reorganization draft plan can be held on site or online. If the meeting is held off-site, the right to be informed of all the entitled attendees shall be guaranteed. The collegial panel hearing the reorganization case or the presiding judge appointed by the collegial panel shall attend the creditors' meeting.
Article 109 In addition to voting on-site on the reorganization draft plan, the administrator may inform creditors of relevant matters in advance, and arrange voting by means of communication, online voting and other off-site methods. In cases where off-site voting is adopted, the administrator shall, within three days after the creditors' meeting is held, inform the voters of the voting results by correspondence, email, announcement, etc.
Article 110 If more than half of the creditors in the same voting group present at the creditors' meeting agree on the reorganization draft plan, and their claims account for more than two-thirds of the total claims of the group, the reorganization draft plan shall be deemed as being adopted by this group.
Article 111 Creditors or contributors whose rights and interests have not been adjusted or affected shall not vote on the reorganization draft plan.
Article 112 The voting results of the contributors' group on the adjustment of the contributors' rights and interests shall be deemed as adopted if the following conditions are met:
1. Stockholders representing more than two-thirds of the voting rights of a limited liability company agree on the reorganization draft plan;
2. More than two-thirds of the voting rights of stockholders present at the meeting of a joint-stock limited company agree on the reorganization draft plan.
Article 113 The contributors' group meeting may be held jointly or separately with the creditors' meeting. If the board of stockholders, general meeting of stockholders or other authorities of the debtor have made a resolution on the adjustment of contributors' rights and interests in the reorganization draft plan, the contributors' group meeting for voting may not be held.
Section B Approval of the Reorganization Plan
Article 114 The reorganization draft plan, if adopted by all voting groups, shall be deemed to have been adopted.
If the rights and interests of all voting groups are not adjusted or affected, this situation is equivalent to that mentioned in the preceding paragraph.
Article 115 Within 10 days upon the adoption of the reorganization plan, the debtor or the administrator shall file a petition with the people's court for approval of the reorganization plan. The people's court shall rule to terminate the reorganization process within 30 days from the date of receiving the petition and make a public announcement if the court considers the following conditions are met after the petition being duly reviewed by the court:
1. The contents of the reorganization plan do not violate the provisions of law, and conform to the provisions of Paragraphs 1 and 2 of Article 97 of the Standards;
2. The convening and voting procedures of the creditors' meeting and the submission procedures of the reorganization draft plan comply with the provisions of the Standards;
3. The grouping of creditors and contributors complies with the provisions of the Standards;
4. The explanations of the reorganization draft plan and the disclosure of information in other ways by the administrator and the debtor practicing self-administration are not objective and insufficient that may damage the interests of voters;
5. The reorganization plan is feasible;
6. The reorganization plan can ensure that the opponents in each voting group can receive at least the liquidation value of their rights and interests when the reorganization draft plan is submitted for approval.
Article 116 If some voting group fails to adopt the reorganization draft plan, the administrator or the debtor practicing self-administration may negotiate with these voting groups, provided that the outcome of the negotiation does not prejudice the interests of the other voting groups.
Article 117 For voting group that fails to adopt the reorganization draft plan, the results of voting shall be reached only if the creditors or contributors that satisfied the conditions for the adoption of the reorganization draft plan agree to vote again and attend the meeting for a second vote. The voting shall be conducted in accordance with Article 109 of the Standards, and the conditions for the adoption of the vote shall be the same as those of the previous vote. However, if the creditors or contributors who expressly refuse to negotiate or vote again, and fail to attend the meeting for the second vote, it shall be deemed as their disapproval on the reorganization draft plan.
Article 118 For voting group that fails to adopt the reorganization draft plan, if the creditors or contributors that agree to vote again do not meet the conditions for the adoption of the reorganization draft plan, it shall be deems as the groups refuses to vote again.
Article 119 If the voting group that failing to adopt the reorganization draft plan refuses to vote again or fails to adopt one after the second vote, whereas the reorganization draft plan conforms to the provisions of Article 115 and meets the following conditions, the administrator or the debtor practicing self-administration may file a petition with the people's court for approval of the reorganization draft plan:
1. At least one voting group has adopted the reorganization draft plan except for voting groups whose rights and interests have not been adjusted or affected;
2. According to the reorganization draft plan, claims for security rights over specific property of the debtor will be fully paid off, the losses incurred as a result of the delay in repayment will be fairly compensated, and the security rights have not been materially impaired, or the voting group has already adopted the reorganization draft plan;
3. According to the reorganization draft plan, the claims listed in Subparagraphs 2 and 3 of the first paragraph of Article 99 will be fully repaid, or the reorganization draft plan has been adopted by the corresponding voting group;
4. According to the reorganization draft plan, the proportion of general claims to be repaid shall not be less than the proportion of settlement specified in the insolvency liquidation process when the reorganization draft plan is submitted for approval, or the voting group has already adopted the reorganization draft plan;
5. Adjustment of the rights and interests of the contributors is fair and just in the reorganization draft plan, or the contributors' group has already adopted the plan;
6. The reorganization draft plan treat members of the same voting group equally, except for cases where the creditor transfers the same claims to multiple transferees for the purpose of raising the proportion of repayment, and the reorganization draft plan limits the proportion of repayment to the transferees;
7. According to the reorganization draft plan, if the claims of a voting group that fails to adopt the plan are not fully repaid, then the claims of another voting group at a lower rank than the voting group shall not be repaid in accordance with the Enterprise Bankruptcy Law.
Article 120 The people's court can organize hearings and investigations on whether to approve the reorganization draft plan, with focus on hearing and reviewing whether the opposing opinions have factual and legal grounds.
Article 121 If, after review, the people's court considers that the reorganization draft plan complies with Article 119 of the Standards, it shall, within 30 days from the date of receipt of the petition, rule to terminate the reorganization process and make a public announcement.
Article 122 Under any of the following circumstances during the reorganization period, the people's court shall, upon the request of the administrator or stakeholders, rule to terminate the reorganization process and declare the bankruptcy of the debtor:
1. The debtor's business and property conditions continuously deteriorate and there is no possibility of redemption;
2. The debtor has committed frauds, maliciously reduced the debtor's property or has committed other acts that are obviously detrimental to the creditors;
3. The administrator is unable to perform its duties due to the acts of the debtor;
4. The reorganization draft plan has not been adopted and fails to comply with Article 119 of the Standards.
During the reorganization, if the administrator finds any of the circumstances listed in the preceding paragraph, it shall request the people's court to terminate the reorganization process.
Article 123 If any of the following circumstances occurs during the reorganization, the people's court shall rule to terminate the reorganization process and declare the debtor's bankruptcy:
1. The administrator or the debtor practicing self-administration cannot submit the reorganization draft plan in accordance with Article 94;
2. The reorganization draft plan has not been adopted and approved, or the adopted reorganization plan has not been approved.
Article 124 If the people's court rules to terminate the reorganization process in accordance with Articles 115, Articles 121, Articles 122 and Articles 123 of the Standards, it shall, within five days from the date of ruling, submit the ruling to the debtor's executive court. The execution process suspended due to the reorganization process shall be terminated.
Article 125 After the people's court rules to terminate the reorganization process and declares the debtor's bankruptcy, the administrator shall continue to perform its duties as an administrator according to the insolvency liquidation process. The administrator's remuneration shall be determined according to the total value of the unsecured property finally paid off by the debtor in the reorganization and liquidation process. However, if the administrator is unable to continue to perform its duties or is inappropriate to continue to serve as administrator, the people's court shall appoint a new administrator according to the law.
If the administrator is re-appointed in accordance with the preceding paragraph, the total remuneration of the administrator of the reorganization process and the administrator of the liquidation process shall be determined by the people's court according to the total value of the unsecured property finally paid off by the debtor in the reorganization and liquidation process. The remuneration distribution plan shall be submitted to the people's court for determination after negotiation between the administrators. If the negotiation fails, the people's court shall determine the remuneration distribution plan according to the actual situation and with reference to the provisions on the remuneration of the administrator.
Chapter VI Implementation and Supervision of Reorganization Plan
Article 126 The reorganization plan approved by the people's court shall be binding on the debtor and all the creditors. The adjustment of the rights and interests of the contributors stipulated in the reorganization plan shall be binding on all the contributors of the debtor.
Article 127 The debtor shall be responsible for the implementation of the reorganization plan and shall report the implementation of the reorganization plan and the financial status of the debtor to the administrator. The administrator shall be responsible for the supervision of the implementation of the reorganization plan, unless otherwise agreed in the reorganization plan.
If it is agreed in the reorganization plan that the plan shall be implemented by the administrator or other persons, but the administrator or other person fails to or cannot implement the plan, the Article 143 of the Standards shall apply.
Article 128 Since the date when the people's court rules to approve the reorganization plan, the administrator shall formulate a supervision plan, clarify the supervision method, matters and responsibilities, and report them to the people's court for the record during the supervision period stipulated in the reorganization plan. The administrator who has taken over the property and business affairs shall promptly and properly handover the property and business affairs to the debtor.
Article 129 If the creditor files claims after the expiration of the time limit, and its claims have not been confirmed by the people's court before the creditor's meeting held to vote on the reorganization draft plan, the creditor shall not exercise the right to claim the repayment of the debtor, file a new lawsuit for property payment, or file a petition for compulsory execution of the debtor's property during the implementation period of the reorganization plan, except for such claims has been reserved its proportion of the repayment provided in the reorganization plan.
The creditor mentioned in the preceding paragraph may, after the completion of implementation of the reorganization plan, exercise its rights in accordance with the repayment conditions for the same category of claims stipulated in the reorganization plan.
Article 130 The rights enjoyed by the creditors over the debtor's guarantor and other joint debtors shall not be affected by the reorganization plan.
Article 131 The debtor shall no longer be liable for debts that exempted or reduced according to the reorganization plan from the time the reorganization plan is implemented.
Article 132 During the implementation of the reorganization plan, if the contributors or creditors refuse to cooperate in handling the procedures for the alteration of the contribution rights and interests without justified reasons, the people's court can, upon the request of the administrator or stakeholders, issue a notice of assistance in execution to the concerned parties.
Article 133 During the implementation of the reorganization plan, the administrator and stakeholders may file a petition with the people's court for necessary assistance in the implementation of the reorganization plan. The people's court can, upon the petition, issue a notice of assistance in execution to the parties concerned, but shall not enforce the repayment plan in the reorganization plan.
Article 134 During the implementation of the reorganization plan, the provisions of Article 21 of the Enterprise Bankruptcy Law on centralized jurisdiction shall not apply to civil actions against the debtor arising out of the new facts or events after the termination of the reorganization process.
Article 135 During the implementation of the reorganization plan, the administrator shall no longer act on behalf of the debtor in respect of any civil action against the debtor arising from new facts or events after the termination of the reorganization process, except as expressly agreed in the reorganization plan.
The claims and debts mentioned in the preceding paragraph shall not be subject to the adjustment and restriction of the reorganization plan, except as otherwise agreed by the parties.
Article 136 During the implementation of the reorganization plan, if the original reorganization plan cannot be implemented due to the adjustment of national policies or the modification of laws and any other special circumstances that cannot be reasonably foreseen during the formulation of the reorganization plan, the administrator may call a creditors' meeting, or the debtor may file a petition with the people's court for convening a creditors' meeting to vote on whether to agree to change the reorganization plan.
Article 137 If the creditors' meeting agrees to change the reorganization plan, the administrator or the debtor shall, within 10 days from the date of the resolution's adoption, file a petition with the people's court for approval. The reorganization plan is only allowed to change for once. If the resolution of the creditors' meeting disagrees to change or the people's court does not approve the petition for change, Article 143 shall apply.
Article 138 If the people's court rules to approve the change of the reorganization plan, the debtor or the administrator shall submit a new reorganization plan within six months. During this period, if the debtor does not commit any act that seriously damages the interests of the creditors or no other circumstances unsuitable for its self-administration occurs, the debtor shall be self-responsible for the management of its property and business affairs, and prepare the changed reorganization plan. The administrator shall perform its duties according to the reorganization period.
The security provided for the implementation of the original reorganization plan shall remain valid within the scope and duration of the original security regardless of the rule of the people's court to approve the change, unless otherwise agreed by the parties.
Article 139 The changed reorganization plan shall be submitted to the creditor group and the contributor group adversely affected by the change of the reorganization plan for a vote. The repayment received by the creditors under the reorganization plan shall remain valid, but the portion of the claims that has been repaid does not count in terms of voting right. The procedures for voting, petition for approval by the people's court and for the ruling of the people's court on whether to approve or not are the same as those during the reorganization period.
If the changed reorganization plan which is approved by the people's court increases the burden of providing security for the implementation of the original reorganization plan, the security provider shall not be liable for the increased part, except otherwise agreed by the parties.
Article 140 Upon the petition filed by the administrator, the people's court can rule to extend the period of supervision over the implementation of the reorganization plan.
Article 141 Within 30 days prior to the expiration of the implementation of the reorganization plan, the debtor may apply for an extension period for implementation. Where the extension involves the postponement of repayment, the debtor shall give equal compensations to the concerned right holders. The administrator shall review the application and issue a special supervision report to the people's court. If the administrator considers that the extension is not out of the reason that the debtor's failure in implementing the reorganization plan, and that the reorganization plan can continue to be implemented, it shall file a petition with the people's court for an extension supervision period for the implementation of the reorganization plan. If, after review, the people's court considers that the petition does not violate the provisions of the law, it can rule to extend the period for the implementation of the reorganization plan and the period for the supervision over the implementation of the reorganization plan.
Article 142 Upon the expiration of the supervision period, the administrator shall submit the supervision report to the people's court. The administrator's supervisory duties shall be terminated from the date of submission of the supervision report.
The supervision report submitted by the administrator to the people's court shall be accessible to stakeholders of the reorganization plan. If the stakeholders have any objection to the supervision report, the administrator and the debtor shall response to the relevant inquiries.
Article 143 If the debtor is unable or fails to carry out the reorganization plan, the people's court shall, upon the request of the administrator or stakeholders, rule to terminate the implementation of the reorganization plan, declare the debtor's bankruptcy, and proceed in accordance with Article 125.
If the people's court rules to terminate the implementation of the reorganization plan, the creditors' commitment to claims adjustment made in the reorganization plan shall become invalid. The repayment received by the creditors for the implementation of the reorganization plan shall remain valid, and the non-repaid portion of the claims is regarded as the insolvency claims.
The creditors mentioned in the preceding paragraph shall continue to receive the distribution only if the repayment received by the other creditors in the same rank reaches the same proportion as that received by the creditors.
Article 144 If the people's court rules to terminate the implementation of the reorganization plan, the security provided for the implementation of the reorganization plan shall remain valid. The legal acts the debtor has committed between the ruling on reorganization and the ruling on termination of the implementation of the reorganization plan shall not be invalid due to the termination of the reorganization.
Article 145 Upon the completion of the implementation of the reorganization plan, the people's court can, upon the petition filed by the administrator and the debtor, rule to terminate the reorganization process.
Article 146 The provisions of the Enterprise Bankruptcy Law shall not apply to the disputes on claims and debts arising after the completion of the implementation of the reorganization plan.
Chapter VII Supplementary Provisions
Article 147 The Standards shall be interpreted by the Judicial Committee of Beijing No. 1 Intermediate People's Court.
Article 148 The Standards shall be implemented on the trial basis from the date of promulgation.