Notice of the Supreme People's Court on Issuing the Minutes of the National Court Bankruptcy Trials Conference

· Area of Law： Enterprises

· Level of Authority： Documents of Judicial Interpretation Nature

· Date issued：03-04-2018

· Effective Date：03-04-2018

· Status： Effective

· Issuing Authority： Supreme People's Court

Notice of the Supreme People's Court on Issuing the Minutes of the National Court Bankruptcy Trials Conference

(No. 53 [2018] of the Supreme People's Court)
The higher people's courts of all provinces, autonomous regions, and municipalities directly under the Central Government; the Military Court of the People's Liberation Army; and the Production and Construction Corps Branch of the Higher People's Court of Xinjiang Uygur Autonomous:
The Minutes of the National Court Bankruptcy Trials Conference are hereby issued to you for your compliance and implementation.
Supreme People's Court
March 4, 2018
Minutes of the National Court Bankruptcy Trials Conference
For the purposes of implementing the requirements stated in the Report at 19th CPC National Congress for implementing new development concepts and establishing a modern economic system, closely centering on the theme of quality development, serving and guaranteeing the supply-side structural reform, maximizing the positive role of the bankruptcy trials of people's courts in improving the relief and withdrawal mechanism for participants in the socialist market economy, and providing more powerful judicial guarantees for securing a decisive victory in building a moderately prosperous society in all aspects, the Supreme People's Court convened the National Court Bankruptcy Trial Work Conference in Shenzhen, Guangdong province on December 25, 2017. The representatives of the higher people's courts of all provinces, autonomous regions and municipalities directly under the Central Government and municipal intermediate people's courts attended the conference. The representatives reached a consensus on the major issues involved in the bankruptcy trials of people's courts upon conscientious discussion. The minutes are hereby taken as follows:
I. General requirements for bankruptcy trials
As it is believed at the conference, people's courts shall adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics in a New Era, profoundly recognize the significance of the bankruptcy laws for securing a decisive victory in building a moderately prosperous society in all aspects, take more powerful measures to conduct bankruptcy trails, and provide more intense judicial guarantee for sustained and sound economic and social development. For now, the general requirements for bankruptcy trials are as follows:
First, using the bankruptcy trial function to boost the building of the modern economic system. People's courts shall achieve resource reallocation through the bankruptcy work, make effective use of the favorable opportunities for interests, business management, assets, technology, and other material adjustment in enterprise bankruptcy, dispose of different enterprises by category, and effectively mobilize, allocate and coordinate science and technology, capital, labor force, human resources, and other factors of production, so as to promote the real economy and industry system in becoming more quality and efficient.
Second, paying particular attention to serving the building of a new economic system and improving the market participants relief and withdrawal mechanism. The legal means of reorganization and compromise shall be maximized to achieve the effective relief for market participants and help enterprises improve quality and efficiency; and the means of liquidation shall be used to procure enterprises and capacity losing business value to withdraw from the market in a timely manner so as to achieve survival of the fittest and improve the relief and withdrawal mechanism for socialist market participants.
Third, improving the bankruptcy trials working mechanisms and releasing the maximum value of bankruptcy trials. The four bankruptcy trials working mechanisms including identification of enterprises going bankrupt and to be reorganized, coordination between the government and courts, exchange of case information, and lawful and orderly interest balance shall be further improved, and the sound conduct of bankruptcy trials shall be promoted, so as to manifest the system value and social responsibility of bankruptcy trails.
Fourth, improving the orderly link between execution and bankruptcy work to promote the resolution of "difficulties in execution." Bankruptcy trials shall be taken as an important link in connection with case docketing, trial and execution and relatively independent thereof, the function of bankruptcy trials to resolve existing execution cases shall be maximized, the obstructions hindering the shift from execution to bankruptcy shall be removed, and an effective path to resolve "difficulties in execution" shall be explored in terms of judicial working mechanisms.
II. The building of professional bankruptcy trials
Professional trials are the critical link for the bankruptcy trials to make substantial progress. The courts at all levels shall vigorously strengthen the building of professional bankruptcy trials and endeavor to make adjudicative bodies professional, adjudicative teams professional, adjudicative procedures standard, adjudicative rules standard, and performance evaluation scientific.
1. Advancing the building of professional bankruptcy adjudicative bodies. The intermediate people's courts in sub-provincial cities and provincial capital cities shall establish liquidation and bankruptcy tribunals without delay according to the Work Plan for Establishing Liquidation and Bankruptcy Tribunals in Intermediate People's Courts (No. 209 [2016], Supreme People's Court) issued by the Supreme People's Court. Other courts at all levels may decide to establish liquidation and bankruptcy tribunals or special collegial panels to meet the need of the local actual work and foster professional judges familiar with liquidation and bankruptcy trials to meet the demand of bankruptcy trials.
2. Reasonably allocating adjudicative tasks. The adjudicative tasks of the courts at all levels shall be reasonably allocated based on the number of bankruptcy cases, difficulties of cases, adjudicative teams, and other conditions. For bankruptcy cases featuring complicated creditor-debtor relations and difficulties in trials, higher people's courts may explore and implement the jurisdiction rules with centralized jurisdiction of intermediate people's courts as the principle and the jurisdiction of basic people's courts as the exception; and for bankruptcy cases featuring simple creditor-debtor relations and easiness of trials, basic people's courts may have jurisdiction and efficiently close cases through quick adjudicative procedures.
3. Establishing a scientific performance evaluation system. The performance evaluation system for liquidation and bankruptcy trials shall be improved as soon as possible, performance evaluation standards shall be determined on the basis of fully respecting judicial patterns, and simple comparison between, equal treatment, and equal evaluation of resolution of liquidation bankruptcy cases and that of ordinary cases shall be avoided.
III. Improvement of the trustee system
Trustees are the major promoters of bankruptcy and the specific implementors of bankruptcy matters. The capability and quality of trustees not only affect the quality of bankruptcy trials but also relate to the destiny and future development of bankrupt enterprises. The trustee rules shall be improved at a faster pace, the professional quality and practicing capability of trustees shall be vigorously enhanced, and the guarantees and effective supervision of the discharge of duties by trustees shall be tightened, so as to provide powerful guarantees through the rules for ameliorating enterprises' operations and optimizing industry structure.
4. Improving the structure of the trustee team. The people's courts shall guide intermediary agencies in the trustee lists in recruiting persons with professional techniques and knowledge and capable of enterprise operation to the trustee team by appropriate means, promote a more reasonable structure of the trustee team, and maximize the important role of trustees in diagnosing enterprises, consolidating resources, and other aspects.
5. Exploring cross-regional practicing by trustees. In addition to selecting trustees on local lists, the courts in all regions may explore election of trustees on the lists of trustees of other provinces and municipalities so as to ensure the selection of the best trustees for significant bankruptcy cases. If two or more qualified intermediary agencies make a request for jointly serving as the trustee in the same bankruptcy case, the people's court may grant permission if, as reviewed, the requirements of voluntary consultation, complementary advantages, and rights consistent with obligations are met, and it is necessary.
6. Implementing rating administration of trustees. Higher people's courts, or intermediate people's courts preparing a list of trustees of their own motion, may comprehensively take into account the professional level, work experience, practicing integrity, performance, diligence, and other factors of trustees, reasonably rate trustees, and subject trustees to rating administration and regular evaluation. For a bankruptcy case featuring a small quantity of property of the debtor and a simple debtor-creditor relationship, a trustee may be appointed from trustees of corresponding ratings by queuing, lot, lottery, or any other random means.
7. Establishing a working mechanism for competitive appointment of trustees. For bankruptcy cases, a competitive mechanism may be introduced to appoint trustees and improve the quality of bankruptcy administration. For listed company bankruptcy cases, bankruptcy cases having a material impact locally, or bankruptcy cases featuring complicated debtor-creditor relationships and affecting a relative large number of creditors, employees and interested persons, trustees shall be generally selected and appointed through competitive means.
8. Reasonably dividing the scope of functions of courts and trustees. People's courts shall provide support and guarantees for trustees to discharge their duties according to the law and abstain from substituting themselves for trustees to make decisions. Trustees shall administer and dispose of the property of the debtors according to the law and prudentially decide the internal management matters of the debtors and shall not transfer part or all of their duties to others.
9. Further implementing the duties of trustees. Over the course of reorganization administered by a debtor, the people's court shall supervise the trustee to develop specific rules for supervising the debtor. During the supervision period as specified in the reorganization plan, the trustee shall represent the debtor in any legal proceedings and arbitrary activities instituted before the supervision period and pending decision. After reorganization or compromise is converted into liquidation bankruptcy, the trustee shall continue to discharge the duties as a trustee in the liquidation bankruptcy.
10. Using the role of remuneration in stimulating and binding trustees. People's courts may determine the means of payment of the remuneration to trustees according to the different circumstances of bankruptcy cases and use the positive role of remuneration of trustees in stimulating and binding them in the aspect of diligent discharge of duties. The remuneration of trustees shall be paid in installments in principle according to the progress of trial of bankruptcy cases and the discharge of duties by trustees. For bankruptcy cases that are simple and it takes relatively short time to solve, remuneration may be paid in a lump sum to trustees at the end of the bankruptcy.
11. Rules for expenses for employment of other persons by trustees. The expenses necessary for a trustee to employ a manager of the enterprise with the permission of the people's court, or, if necessary, any other social intermediary agency or person to conduct material action, arbitration, execution, audit, or any other work of a strong professional nature shall be listed as bankruptcy expenses with the consent of the creditors' meeting.
12. Boosting the establishment of comprehensive guarantee rules for bankruptcy expenses. The courts in all regions shall, by vigorously winning the support of the finance authorities, deducting a certain proportion of money from the remuneration of trustees in other bankruptcy cases, or any other means, boost the establishment of guarantee funds for bankruptcy expenses and establish a permanent mechanism to guarantee bankruptcy expenses, so as to solve the problem that the insufficiency of the property of the debtor to cover bankruptcy expenses affects the institution of bankruptcy.
13. Supporting and guiding the establishment of trustees' associations. People's courts shall support, guide and promote social intermediary agencies and individuals on the lists of trustees within their respective jurisdictions in establishing trustees' associations so as to strengthen the management of and restrictions on trustees, maintain the lawful rights and interests of trustees, gradually form well-regulated, stable and self-regulation industry organizations, and ensure that the trustee team is vigorous and develops in a well-regulated and orderly manner.
IV. Reorganization bankruptcy
As it is believed at the meeting, the reorganization rules reflect the relief function of the bankruptcy laws in a consolidated manner and represent the development trends of modern bankruptcy laws, and hence the people's courts at all levels across the country shall attach great importance to the reorganization work, properly try enterprise reorganization cases, save enterprises in trouble in a market-oriented and law-based means, and continue to improve the relief mechanism for socialist market participants.
14. Identification and review of enterprises to be reorganized. The targets of reorganization bankruptcy shall be enterprises in trouble having the value and possibility of saving; and zombie enterprises shall be removed from the market decisively through liquidation bankruptcy. If a people's court is able to determine that a debtor conspicuously lacks reorganization value and possibility of saving, taking into account the assets conditions, technology, production and sales, industry prospects, and other factors, when reviewing an application for reorganization, it shall decide not to grant acceptance.
15. The hearing procedure for reorganization cases. For a case featuring complicated debtor-creditor relationships and a large size of debt, or involving reorganization of a listed company, the people's court may organize the applicant and the respondent for a hearing when reviewing an application for reorganization. Creditors, capital contributors, investors in the reorganization, and other interested persons may attend the hearing with the permission of the people's court. The time period for the hearing shall not be included in the time limit for review of the application for reorganization.
16. Development of reorganization plans, communication and coordination. People's courts shall heighten the communication with trustees and debtors, direct them to analyze the reasons for the plight of the debtors, prepare draft reorganization plans in a target-specific manner, procure enterprises to regain profitability, and raise the rates of successful reorganization. The people's courts shall establish a communication and coordination mechanism together with the government and assist trustees and debtors in resolving the difficulties and problems in preparing the draft reorganization plans.
17. Review and approval of reorganization plans. Reorganization is not limited to waiver of debt and financial adjustment, and the priority of reorganization is to maintain the operational value of enterprises. A people's court shall, when reviewing a reorganization plan, review whether the operation plan contained is feasible in addition to compliance review. If the operation plan that the enterprise regains profitability in the reorganization plan is feasible, with lawful voting procedures, without prejudice to the repayment interests of any dissident in all voting groups, the people's court shall, within 30 days from the day of receiving the application, decide to approve the reorganization plan.
18. Conditions for forced approval of draft reorganization plans. People's courts shall prudentially apply paragraph 2 of Article 87 of the Enterprise Bankruptcy Law and may not abuse the power of forced approval. If the forced approval of a draft reorganization plan is necessary, the draft reorganization plan shall comply with the provisions of paragraph 2 of Article 87 of the Enterprise Bankruptcy Law and, if creditors are divided into more than one group, also be adopted by at least one group, and the repayment interests available to any dissident in each voting group are not less than those available in liquidation bankruptcy.
19. Conditions and procedures for modification of reorganization plans during their implementation. A debtor shall strictly implement the reorganization plan, but if the adjustment of national policies, amendment or change of laws, or any other special condition appears and causes the impossibility of the implementation of the reorganization plan, the debtor or the trustee may apply for modification of the reorganization plan for once. If the creditors' meeting resolves to consent to modifying the reorganization plan, it shall, within ten days from the day of adoption of the resolution, refer it to the people's court for approval. If the creditors' meeting resolves not to give its consent, or the people's court disapproves the application for modification, the people's court may, at request of the trustee or interested person, decide to terminate the implementation of the reorganization plan and announce the debtor bankrupt.
20. Further votes casting and ruling of approval after the modification of reorganization plans. If the people's court decide to consent to modifying the reorganization plan, the debtor or the trustee shall offer a new reorganization plan within six months. The modified reorganization plan shall be referred to the creditor group and capital contributor group adversely affected by the modification of the reorganization plan for votes casting. The procedures for casting votes, applying to the people's court for approval, and the people's court deciding whether to grant approval shall be the same as those for the former reorganization plan.
21. Guarantees for normal production and operation of enterprises after reorganization. After reorganization of an enterprise, compared with the former enterprise, investors, equity structure, mode of corporate governance, and operation mode, among others, tend to undergo fundamental changes, and the people's court shall, by strengthening the communication and coordination with the government, assist the reorganized enterprise in repairing its credit records and accessing tax incentives according to the law so as to help the reorganized enterprise restore normal production and operation.
22. Exploring and promoting the transition from extrajudicial reorganization to judicial reorganization rules. Before an enterprise is reorganized, the creditors and the debtor, capital contributors, and other interested persons may prepare reorganization arrangements through extrajudicial commercial negotiations. After the institution of the reorganization, they may prepare a draft reorganization plan based on the reorganization arrangements and refer it to the people's court for lawful review and approval.
V. Liquidation bankruptcy
As it is believed at the conference, liquidation bankruptcy, as an integral part of the bankruptcy rules, plays a direct role in eliminating outdated capacity and optimizing market resource allocation. For debtors lacking the value and possibility of saving, the debtor-creditor relationships shall be comprehensively and promptly reviewed through liquidation bankruptcy, so as to re-allocate social resources, improve or raise the quality and level of effective social supply, and heighten the role of the Enterprise Bankruptcy Law in guiding the development of the market economy.
23. Conditions for declaration of bankruptcy. If no application for reorganization or compromise is intended at the first creditors' meeting after the people's court has accepted the application for liquidation bankruptcy, the trustee shall promptly apply to the people's court for declaration of bankruptcy after review and recognition of claims, necessary audit and assets valuation. If a debtor has statutory reasons for declaration of bankruptcy after the people's court has accepted the application for bankruptcy compromise or reorganization, the people's court shall declare the debtor bankrupt according to the law.
24. Procedures for declaration of bankruptcy and restrictions on conversion. Where a relevant party applies to the people's court for declaration of bankruptcy, the people's court shall, within seven days from the day of receiving the application, decide to declare bankruptcy and issue an announcement. After the debtor is declared bankrupt, reorganization or compromise may not be resorted to any longer.
25. Exercise of and restrictions on the rights of holders of security interests. In either liquidation bankruptcy or compromise bankruptcy, a creditor enjoying security interests in the particular property of the debtor may lay claim before the trustee to the exercise of the preference over satisfaction with respect to the disposition of the particular property by sale, in which case the trustee shall dispose by sale in a timely manner and may not refuse the claim on the ground that a resolution of the creditors' meeting is required, among others, unless the separate disposition of the security will diminish the value of other bankruptcy property and thus their disposition as an entirety is required.
26. Disposition of bankrupt property. Bankruptcy property shall be disposed of at its maximum value, taking into account disposition efficiency. People's courts shall vigorously explore more effective disposition means and channels of bankruptcy property and raise the rates of sale of bankruptcy property as much as possible. If the proceeds of the disposition by auction are estimated to be insufficient to cover the expenses for valuation and auction, or the auction is unsuccessful, sale or dispensation in kind may be adopted as resolved by the creditors' meeting. If the plan for sale or dispensation in kind is not adopted after votes have been cast twice at the creditors' meeting, the people's court shall decide the disposition.
27. Bankruptcy of enterprises and protection of the rights and interests of employees. In bankruptcy, labor relations shall be properly tackled according to the law, and the improvement of the unpaid remuneration guarantee mechanism for employees shall be promoted, so as to protect the subsistence right of employees. The claims of employees disbursed by a third party shall be paid in principle according to the nature of the claims; and in the case of disbursements made by the unpaid remuneration guarantee fund, payment shall be made in the order as provided for in paragraph 1(2) of Article 113 of the Enterprise Bankruptcy Law. The contributions to the housing provident fund payable by the debtor shall be paid according to the nature of remuneration of employees payable by the debtor.
28. Principles and order of payment of bankruptcy claims. For claims whose order of payment is not explicitly provided by the law, the people's court may reasonably determine the order of payment according to the principles that claims for personal damages rank ahead of property claims, private law claims rank ahead of public law claims, and compensatory claims rank ahead of punitive claims. The personal damages for the tort on the part of the debtor may be paid in the order as provided in paragraph 1(1) of Article 113 of the Enterprise Bankruptcy Law, mutatis mutandis, except for the punitive compensation involved therein. The remainder of the bankruptcy property after the payment in the order as provided in Article 113 of the Enterprise Bankruptcy Law may be used in order to pay the civil punitive compensation, administrative fine, criminal fine, and other punitive claims incurred before the acceptance of bankruptcy.
29. Establishing a complexity and simplicity separation mechanism for the trial of bankruptcy cases. People's courts shall raise the efficiency of trial of bankruptcy cases and establish a complexity and simplicity separation mechanism for the trial of bankruptcy cases on the premise of ensuring no prejudice to the procedural and substantial rights of interested persons. For a bankruptcy case with determinate debtor-creditor relationships and with clear property conditions of the debtor, the progress in trial may be accelerated by shortening the time of procedures, simplifying process, and other means, but the minimum time limit as provided by the law may not be violated.
30. Termination of liquidation bankruptcy. People's courts shall terminate liquidation bankruptcy on the basis of ascertaining the property conditions of the debtor, specifying the plan for the dispensation of the property of the debtor, and ensuring that the bankruptcy claims are paid according to the law. If after the application for bankruptcy has been accepted, as found out in the investigation by the trustee, the property of the debtor is insufficient to pay the bankruptcy expenses, and no person makes payment on behalf or make disbursement, the people's court shall, at the application of the trustee, make a declaration of bankruptcy and decide to terminate liquidation bankruptcy.
31. The payment obligation of sureties and restrictions on their claims for reimbursement. Before the termination of bankruptcy, a surety who has fulfilled the suretyship towards the creditor may require the debtor to pay him/her the part in the bankruptcy payable to the creditor who has declared claim. A creditor shall, within six months after the termination of the bankruptcy, require a surety to fulfill his/her suretyship with respect to the unpaid part in the bankruptcy. A surety shall, upon fulfillment of his/her suretyship, no longer exercise the claim for reimbursement against the debtor after the compromise or reorganization.
VI. Bankruptcy of related enterprises
As it is believed at the conference, when trying cases of related enterprises in bankruptcy, people's courts shall take different means to decide the cases based on the specific relationship modes of related enterprises in bankruptcy. The related relationship featuring high-level confusion of legal personalities shall be disposed of through substantive consolidation to ensure the fair satisfaction of all creditors, and it shall also be avoided that the lawful rights and interests of relevant interest holders are damaged by inappropriate application of substantive consolidation.
32. Prudential application of substantive consolidation of related enterprises in bankruptcy. When trying enterprise bankruptcy cases, people's courts shall respect the independence of the legal personalities of enterprises and take several judgment of the reasons for the bankruptcy of related enterprises and application of single bankruptcy as the basic principle. When there is high-level confusion of legal personalities among related enterprises, and it costs too much to distinguish the property of related enterprises, with serious prejudice to the fair satisfaction interests of creditors, the substantive consolidation of related enterprises in bankruptcy may be applied in trials.
33. Review of applications for substantive consolidation. A people's court shall, on receipt of an application for substantive consolidation, promptly notify the related interested persons and organize a hearing, of which the time is not counted among the review time. Over the course of the review of the application for substantive consolidation, the people's court may comprehensively take into account the procedure for and duration of confusion of assets of related enterprises, interest relationship among all enterprises, the overall satisfaction interests of creditors, the possibility of reorganization of added enterprises, and other factors and decide within 30 days from the day of receiving the application whether to conduct the trial by substantive consolidation.
34. Relief for interested persons when a ruling of substantive consolidation is entered. A relevant interested person not satisfied with the ruling of substantive consolidation entered by the acceptance court may apply for reconsideration to the people's court at the next higher level of the acceptance court within 15 days of serving the written ruling.
35. Jurisdiction principle and resolution of conflicts in trials by substantive consolidation. If a case of related enterprises in bankruptcy is tried by substantive consolidation, the people's court in the place where the essential controlling enterprise among the related enterprises is located shall have jurisdiction. If the essential controlling enterprise is ambiguous, the people's court in the place where the major property of related enterprises is located shall have jurisdiction. If more than one court disputes jurisdiction, a common superior people's court shall be requested to appoint jurisdiction.
36. Legal consequences of trials by substantive consolidation. If a people's court decides to try a bankruptcy case by substantive consolidation, the claims and debt of all related enterprises shall be distinguished, and the property of all related enterprises, as the consolidated and unified bankruptcy property, shall be fairly paid to the creditors of all related enterprises in the same procedure according to the statutory order. In the event of reorganization by substantive consolidation, the draft reorganization plan shall specify unified claims classifications, claims adjustment, and payment of claims.
37. Continuity of related enterprises after trials by substantive consolidation. If liquidation bankruptcy proceeds by application of substantive consolidation rules, each related enterprise shall be deregistered upon termination of the bankruptcy. In the event of compromise or reorganization by application of substantive consolidation rules, all related enterprises shall be integrated into one enterprise in principle. If it is necessary to maintain the independence of few enterprises according to the comprise or reorganization plan, several disposition shall be made under the rules relating to split of enterprises.
38. Coordinated trial and jurisdiction principle of cases of related enterprises in bankruptcy. If more than one related enterprise has reasons for bankruptcy but does not meet the conditions for substantive consolidation, people's courts may coordinate trials with respect to more than one bankruptcy procedures at the application of relevant parties, and, to meet the need of coordination of the procedures, comprehensively taking into account the efficiency of trial of bankruptcy cases, order of applications for bankruptcy, size of indebtedness of affiliated enterprises, the domicile of the essential controlling enterprise, and other factors, the common superior court may appoint a court for centralized jurisdiction.
39. Legal consequences of coordinated trials. Coordinated trials neither extinguish the debtor-creditor relationships among related enterprises nor consolidate the property of affiliated enterprises, and the creditors of each affiliated enterprise shall still be satisfied to the extent of the property of the affiliated enterprise. A claim arising by improper use of the related relationship among related enterprises shall rank behind other ordinary claims in payment, and the later ranking creditor may not be first satisfied out of the particular property provided by other related enterprises.
VII. Transition from execution procedure to bankruptcy procedure.
The effective transition from execution procedure to bankruptcy procedure is a powerful foothold to comprehensively advance bankruptcy trials and an important measure to solve "difficulties in execution." The courts at all levels across the country shall profoundly recognize the significance of the transition from execution to bankruptcy, vigorously boost the transition of execution cases meeting bankruptcy conditions, including impossible execution cases, to bankruptcy procedure, and maximize the institutional value of bankruptcy.
40. The obligations of review notification and explanation and duty of transfer of executing courts. The executing authorities shall attach great importance to the transition from execution to bankruptcy and promote the transition of execution cases meeting the prescribed conditions to bankruptcy procedure. If an executing court discovers that a corporate enterprise subject to execution proceedings meets the provisions of Article 2 of the Enterprise Bankruptcy Law, it shall inquire promptly whether the party consents to transferring the case to bankruptcy review and explains the legal consequences. The executing court shall, upon deciding the transfer, notify all other known executing courts in writing, and each executing court shall suspend the execution proceedings against the person subject to execution proceedings.
41. Transfer and receipt of cases under transition from execution to bankruptcy. Executing courts and receiving courts shall strengthen the coordination and collaboration in the transfer link to improve the actual effect of the work. When transferring cases, the executing courts shall ensure the integrity of materials and compliance of content and forms. The receiving courts shall conscientiously conduct review and promptly provide feedback and may not reject or delay in docketing cases.
42. Termination of seizure measures or transfer of seized property after acceptance of bankruptcy cases. An executing court shall, upon receipt of a ruling of acceptance of bankruptcy, terminate the measures for seizing, impounding, or freezing the property of the debtor; or, as required by the court accepting bankruptcy, issue a letter to hand over the right of disposition of seized, impounded or frozen property to the court accepting bankruptcy. The court accepting bankruptcy may, with the letter of handover of disposition from the executing court, continue or terminate the seizing, impounding or freezing, or otherwise.
If the executing court refuses to terminate seizing, impounding or freezing measures upon receipt of the ruling of acceptance of bankruptcy, the court accepting bankruptcy may request the superior court of the executing court to take corrective measures according to the law.
43. Information sharing between the bankruptcy adjudicative authorities and the executing authorities. The courts accepting bankruptcy may use the execution search and control system to search and control the property of debtors and raise the efficiency of bankruptcy trials, and the executing authorities shall cooperate.
The courts in all regions shall develop a concept of synchronization of online and offline legal procedures, gradually achieve online transfer of execution cases meeting transfer conditions, improve the transparency of the transfer work, and raise the efficiency of transfer, notification, service, communication and coordination, and other relevant work of cases.
44. Tightening the evaluation and management of the transition of execution to bankruptcy. The courts at all levels shall establish an evaluation mechanism of the transition of execution to bankruptcy based on the actual circumstances of their work, scientifically establish evaluation indicators, and boost the transition of execution to bankruptcy. If no comments are requested from parties as required, no transfer for review is made as required, or a receiving court refuses to receive materials under the transition of execution to bankruptcy, or to docket the case, in violation of relevant provisions, such case shall be included in the performance evaluation and appraisal system, and in addition, a public notice shall be circulated, with the relevant personnel seriously held liable.
VIII. Information technology building in relation to bankruptcy
As it is believed at the conference, the courts across the country shall further intensify the information technology building of bankruptcy trials, improve the transparency and credibility of trials of bankruptcy cases, heighten the quality and efficiency of trials of bankruptcy cases, and promote the reorganization and revitalization of enterprises.
45. Maximizing the role of the bankruptcy reorganization case information platform in boosting bankruptcy trials. The courts at all levels shall, according to the relevant provisions of the Supreme People's Court, regulate the trial of bankruptcy cases through the bankruptcy reorganization case information platform, conduct disclosure for the whole process, and keep traces of each step. The data statistics, data search, and other functions of the information network shall be further enhanced, and the information of enterprise bankruptcy cases shall be analyzed and researched, so as to promptly discover new situations, solve new problems, and raise the trial level of bankruptcy cases.
46. Continuing to strengthen the disclosure of the information of reorganization bankruptcy cases. The information of debtor enterprises to be disclosed shall be increased, and potential investors shall be attracted, so as to promote the free flow and effective allocation of capital, technology, management capacity, and other factors and assist enterprises in being reorganized and revitalized. It shall be ensured that creditors and other interested persons understand the progress of cases and the relevant finance, draft reorganization plans, implementation of reorganization plans, and other information of debtors in a timely and sufficient manner so as to protect the rights of knowledge and participation in procedures of creditors and other interested persons.
47. Use information technology means to improve the quality and efficiency of resolution of bankruptcy cases. To cater for the trends in the development of information technology, the disposition of bankruptcy property by online auction shall be vigorously guided to improve the benefits of disposition of bankruptcy property. Creditors' meetings convened online shall be encouraged and regulated to raise efficiency, reduce bankruptcy expenses, and ensure the rights of creditors and other parties to participate in bankruptcy procedure.
48. Further using the pivotal role of the Information Website of National Bankrupt Enterprises' Recombinational Cases. The Information Website of National Bankrupt Enterprises' Recombinational Cases shall continue to be improved and promoted, and while it is ensured that new data are entered in the Information Website, relevant existing data shall be entered at a faster pace, so as to establish the Information Website as the pivot in the aspect of big data on enterprises' bankruptcy, use the functions of publicity and exchange of the Information Website, and better motivate all parties to use the Information Website.
IX. Cross-border bankruptcy
49. Cross-border bankruptcy and reciprocity principle. When disposing of cross-border bankruptcy cases, people's courts shall properly solve the conflict of laws and contradictions in cross-border bankruptcy and reasonably determine the jurisdiction over cross-border bankruptcy cases. Subject to the principle of equal protection of claims of the same type, the interests of foreign creditors and those of Chinese creditors shall be effectively balanced, and the payment interests of the claims of employees, tax claims, and other prior rights within the territory of China shall be reasonably protected. The negations over and conclusion of international cross-border bankruptcy treaties shall be vigorously participated in and boosted, the new means of application of the reciprocity principle shall be explored, and the cooperation between Chinese courts and trustees in the cross-border bankruptcy field shall be furthered, so as to boost the sound and orderly development of international investment.
50. Rights protection and interests balance in cross-border bankruptcy cases. Cross-border bankruptcy cooperation shall be conducted according to Article 5 of the Enterprise Bankruptcy Law. If the people's court recognizes the judgment or ruling over a bankruptcy case entered by a foreign court, the remainder of the property of the debtor in the territory of the People's Republic of China after full payment of the claims of holders of security interests and employees and social insurance costs, tax payable, and other prior rights within the territory may be dispensed as required by the foreign court.