2023.06.05
On March 1, 2021, China’s first local legislation regarding personal bankruptcy, the Personal Bankruptcy Regulations of the Shenzhen Special Economic Zone came into force. The legislative purpose of the Personal Bankruptcy Regulations of the Shenzhen Special Economic Zone is to “reasonably balance the rights and obligations of debtors, creditors and other interested parties, promote the economic regeneration of debtors in good faith, and improve the socialist market economic system”.
On February 17, 2023, the Shenzhen Intermediate People’s Court (“Shenzhen Intermediate Court”) accepted an application filed by a debtor, Mr. Xiong for personal bankruptcy and reorganization in accordance with the Personal Bankruptcy Regulations of the Shenzhen Special Economic Zone, and appointed JunHe’s Shenzhen office as his bankruptcy administrator. JunHe partner Ms. Shen Feng, led the team instructed by the administrator to be responsible for the case. The team of the administrator performed their duties diligently and faithfully in strict accordance with the Personal Bankruptcy Regulations of the Shenzhen Special Economic Zone. This included completing the investigation and verification of the basic status of the debtor and his related persons, notifying known creditors to file their claims and reviewing the status of the claims, investigating the status of the debtor’s property and producing a report on this, assisting the debtor in preparing a draft reorganization plan, and coordinating the convening of creditors’ meetings.
Under the guidance of the Shenzhen Intermediate Court and with the diligent and conscientious work of the team of the administrator, the creditors’ meeting finally approved with 100% affirmative votes the draft reorganization plan for the debtor, which requires the debtor to pay off the principal of all claims within four years and waives all interest on the claims. On May 8, 2023, the Shenzhen Intermediate Court ruled to approve Mr. Xiong’s reorganization plan and closed the personal bankruptcy and reorganization proceedings. The debtor obtained economic recovery through the personal bankruptcy proceedings.
This case fully reflects the value of the personal bankruptcy system in providing remedies for “honest and unfortunate” debtors. After the implementation of the personal bankruptcy system, an honest and unfortunate debtor may gain economic regeneration. The establishment and implementation of the personal bankruptcy system is of great importance to the economic regeneration of honest debtors and the improvement of the socialist market economy system.
This case was led by JunHe partner SHEN, Feng and undertaken by her bankruptcy team.
