Helping bankrupt companies achieve rebirth and renewal

This article is reprinted from Hebei Legal Daily

□ Li Yushuang

Recently, four employees of a company presented two banners to Qinhuangdao Economic and Technological Development Zone People’s Court, each printed with “Fair Law Enforcement to Resolve People’s Concerns, Justice for the People Warms Hearts” and “With Love for the People, Handle Beneficial Matters for the People, Resolve Employees’ Urgencies, Ensure Local Peace.” On behalf of all employees, they expressed heartfelt thanks to the court for demonstrating professional responsibility and impartial justice during the company’s bankruptcy reorganization case, and highly recognized the court’s efforts to organically unify political, legal, and social effects in judicial work.

During its development, the company financed long-term fixed assets through short-term debt, leading to cash flow disruptions and debt issues. In 2015, it fell into crisis and ceased production, being identified by Hebei provincial government as one of 35 key risk mitigation enterprises. On December 23, 2020, the company filed for bankruptcy reorganization with the court in the development zone. After accepting the case, the court quickly assembled a professional bankruptcy trial team, ruling to conduct substantive merger bankruptcy reorganization proceedings and legally appointing a reorganization administrator. During the reorganization process, the court’s bankruptcy team adhered to the concept of “protecting market entities, stabilizing people’s livelihoods and employment, and safeguarding financial security,” developing a scientific and rigorous case handling process; team members worked overtime, thoroughly reviewed the company’s financial status, accurately identified assets and liabilities, guided the administrator to strictly examine creditor claims, clarified the debt structure, and ensured every step was lawful, compliant, and precise. After five years of relentless effort and four creditor meetings, the court approved the draft reorganization plan on January 9 of this year, maximally safeguarding the legal rights of employees and creditors and effectively resolving debt risks.

Currently, the case has entered the implementation stage of the reorganization plan. The court in the development zone adheres to the principle of “letting go but not neglecting,” continuing to supervise the administrator’s enforcement of the plan, encouraging active communication with reorganization investors, and advancing preliminary work for establishing a trust plan with CITIC Trust and Zhongqi Huaping Evaluation Company. On February 2, according to the reorganization plan, the company fulfilled its first creditor repayment, paying a total of over 7.56 million yuan to 949 employees. This was the first time in ten years that employees received their overdue wages, greatly alleviating their worries about unpaid salaries, receiving positive responses from the employees, and significantly boosting creditors’ confidence in the company’s successful reorganization, laying a solid foundation for the smooth implementation of the plan.