New approaches in enterprise bankruptcy procedure

In 2016, China’s GDP exceeded RMB70 trillion (US$10.1 trillion), with GDP growth shifting down from high-speed to moderately high-speed. Although the domestic economy is exhibiting a slower but stable performance with good momentum for growth, it nonetheless faces some pronounced contradictions and problems. In particular, growth in the manufacturing and real estate industries is facing difficulties. Through repeated practical exploration, the techniques set out below, employed in enterprise bankruptcies, can assist enterprises and entrepreneurs in escaping from a precarious situation.

BUSINESS TRANSFER AND RESTRUCTURING PLAN

A certain company in Zhejiang – established in 2004 and specializing in the production of chemical reagents, nickel salts and copper salts, and combining research, development, sales and services in one entity – possessed cutting-edge technical strengths, superior production facilities, a sound testing system, scientific management means, and high-quality human talent. The company held a Hazardous Waste Operating Permit and a Zhejiang Provincial Pollutant Discharge Permit, the former having great value for the company’s operations.

In March 2014, the Zhejiang company became caught up in an inter enterprise mutual debt security crisis, ultimately resulting in insolvency and a clear inability to repay its debts. Following further investigation it was found that, although the company was insolvent, its operations were normal, and, in particular, its Hazardous Waste Operating Permit was a scarce resource in the industry.

Ni Zhigang is a senior partner with Hiways Law Firm. He can be contacted on +86 21 5877 3177 or by email at nizhigang@hiwayslaw.com