2026.07.02
On July 11, 2025, the People’s Court of Yancheng Economic and Technological Development Zone, Jiangsu Province (Yancheng ETDZ Court) ruled to accept the reorganization of Yancheng Zhongnan Century City Real Estate Investment Co., Ltd. (Zhongnan Century City). JunHe’s Shanghai office was appointed by the court as the administrator in the case. On June 24, 2026, Yancheng ETDZ Court approved Zhongnan Century City’s reorganization plan, marking a significant milestone in this case that was handled by JunHe.
Zhongnan Century City is engaged in real estate development, property management and the operation of commercial complexes and other businesses. Its Dayoujing commercial complex is located next to the Yancheng Olympic Sports Center, a venue for the Jiangsu Football City League (JSCL or popularly known as the Su Super League), and is surrounded by residential communities and universities. With over a decade of operation, the complex has strong market recognition and a sound brand reputation in Yancheng and surrounding regions. Past data shows that the complex has recorded annual sales of more than RMB 1.4 billion, peak daily footfall of over 120,000 visitors and, at one point, a net operating income (NOI) margin exceeding 50%. Against a backdrop of macroeconomic headwinds and a downturn in the real estate sector, the company became burdened with substantial debt, mounting liquidity pressure and frequent litigation. As a result of these pressures, the company's financial condition deteriorated and its principal assets faced temporary impairment. Given the commercial complex’s longstanding importance to the regional economy, this became a key concern for the local government, the company’s creditors and the wider community. Ensuring its stable and sustainable operation during financial distress and avoiding disruption to the local consumption ecosystem were major concerns.
Following its appointment by the court, JunHe promptly formed a project team specializing in bankruptcy, real estate and other relevant areas. The team met the administrator’s duties efficiently, including but not limited to taking control of the company and supervising its debtor-in-possession management whilst stabilizing the company’s core management team. Based on a combination of compliance reviews and market-oriented commercial assessments, JunHe issued notices to the commercial complex’s tenants and suppliers electing to continue adhering to their contracts. These measures ensured the stable and orderly operation of the Dayoujing shopping mall throughout the reorganization. With strong support from the local government and the concerted efforts of the retained employees and suppliers that had renewed their contracts, footfall during public holidays increased throughout the reorganization. The mall leveraged the substantial visitor traffic generated by JSCL matches, thereby preserving the value of the business as a going concern.
In terms of the critical task of recruiting a reorganization investor, two public recruitment notices were issued under the supervision and guidance of the Court and the local government. With the participation of the major creditors, the company’s capital contributors, the local government and other parties, an eligible investor was selected through a formal reorganization investor selection meeting. At the creditors’ meeting, the draft reorganization plan received overwhelming approval from each voting group, including the creditor and the equity holder groups.
With the support of the local government and the court, JunHe, as the administrator, drew fully on its extensive experience in bankruptcy reorganization, corporate governance and the disposal of non-performing assets. Grounded in law and informed by commercial considerations, JunHe maintained control over the proceedings. The team balanced the rights and interests of the creditors, tenants, suppliers, consumers and other stakeholders throughout the process. At various critical times—such as preserving the value of the core assets, conducting a market-oriented selection of the investor, reconciling competing interests and maintaining social stability—JunHe demonstrated strong legal expertise and keen commercial judgment. These efforts produced a mutually beneficial outcome in which the value of the debtor’s assets was not only preserved but enhanced. The creditors achieved a relatively high recovery rate and the project’s ability to continue as a going concern was successfully maintained, thereby integrating the legal, economic and social objectives of the reorganization plan.
This project was spearheaded by JunHe partners LIU, Zhengdong and DONG, Ming and undertaken by counsels LIU, Xin and LIU, Xiaosen.
