What is a Bankruptcy Hearing?

Bankruptcy acceptance is the acceptance of bankruptcy cases, also known as filing, which refers to a judicial act in which, after receiving an application for a bankruptcy case, the people's court considers that the application meets the statutory conditions and begins bankruptcy proceedings. The court's decision to accept an application for bankruptcy is a sign of the beginning of the bankruptcy proceedings.

Bankruptcy acceptance

Chinese name: Bankruptcy acceptance

Foreign name: acceptance of the bankruptcy petition
Category: Commercial Law

Jurisdiction in Bankruptcy Cases

Jurisdiction of bankruptcy cases refers to the division of labor and authority to accept bankruptcy cases between courts at all levels and between courts at the same level. Bankruptcy cases are governed in three ways: (1) specialized courts, such as the United States. (2) Jurisdiction of commercial court. In countries where merchant bankruptcy is practiced, merchant bankruptcy cases are under the jurisdiction of commercial courts. (3) Jurisdiction of ordinary courts, such as Britain, Germany, Japan, etc. China's bankruptcy cases are under the jurisdiction of ordinary courts. Article 3 of the Bankruptcy Law stipulates that bankruptcy cases are under the jurisdiction of the people's court where the debtor is domiciled. The place of residence of the debtor refers to the place where the debtor's main office is located.

Bankruptcy proceedings

Bankruptcy acceptance deadline

1. Where creditors file an application for bankruptcy

Article 10 of the "Bankruptcy Law of the People's Republic of China" (hereinafter referred to as the "Bankruptcy Law") provides that after the creditor files an application for bankruptcy, the people's court shall notify the debtor within 5 days from the date of receipt of the application for bankruptcy. The notice should inform the debtor that he must not transfer assets, evade debts, or engage in acts that hinder fair settlement, and his legal liability when performing such illegal acts. As the acceptance of bankruptcy cases will have a serious impact on the debtor's civil rights, business activities, and business reputation, the people's courts should fully protect the rights of the parties when reviewing bankruptcy applications and should give them the opportunity to fully express their opinions. For this reason, the legislation stipulates that the debtor may challenge the bankruptcy application filed by the creditor, but if the debtor files a voluntary bankruptcy application, the legislation does not provide for the creditor's opposition procedure. If the debtor has an objection to the creditor's bankruptcy application, it shall receive the people's court To the People's Court within 7 days of the notice. After the objection period expires, the court has a trial period of no more than 10 days regardless of whether the debtor raises an objection. In other words, the court will make a decision to accept or not accept an application for bankruptcy within 10 days after the objection period expires.

2. Where the debtor files for bankruptcy

In the case where the debtor or the person responsible for liquidation files an application for bankruptcy, there is no question of the debtor raising an objection. Therefore, Article 10 of the Bankruptcy Law stipulates that the people's court shall decide whether to accept the application within 15 days from the date of receipt of the application for bankruptcy.

3. Special circumstances

In special circumstances, if the time limit for reviewing a case is to be extended, it may be extended for 15 days upon approval by the people's court at the next higher level. The so-called special circumstances refer to situations in which the decision to accept a case requires an investigation, a hearing, or a case that needs to be reported to a superior people's court for approval before being accepted.

Collection and correction of bankruptcy acceptance materials

There must be a starting point for the calculation of the examination period for the acceptance of bankruptcy applications, which is the date when the people's court receives the application. Article 7, paragraph 1, of the Judicial Interpretation of the Bankruptcy Law (1) states: "The people's court shall, upon receipt of an application for bankruptcy, issue to the applicant a written certificate of receipt of the application and accompanying evidence." According to this provision, the people's court received After the applicant's application, it is obliged to promptly provide the applicant with a written proof of receipt of the application and the attached evidence as a basis for judging the legality of the acceptance action of the people's court, and calculate the relevant acceptance according to the date on which the receipt should be issued The legal deadline for bankruptcy applications. In order to ensure that the court reviews bankruptcy applications in accordance with the law, and facilitates the applicant to urge the court to receive the applicant's application materials in accordance with the law and make a ruling on whether to accept the bankruptcy application within the statutory period, Article 9 (1) of the Judicial Interpretation of Bankruptcy Law (I) Provisions: "If the applicant filed an application for bankruptcy with the people's court, and the people's court did not accept its application, or did not implement it in accordance with Article 7 of these regulations, the applicant may file an application for bankruptcy with the people's court at the next higher level ..." Accordingly, if the applicant If there is evidence that the court does not accept its application for bankruptcy and related materials, or it does not issue a written proof of receipt of the application and the attached evidence, or fails to make a decision on whether to accept it within the statutory time limit, it may directly file a bankruptcy application to a higher court. .

Supplements and corrections to the application materials submitted by the applicant. Article 7, paragraph 3, of the Judicial Interpretation of Bankruptcy Law (1) states: "If the people's court believes that the applicant should supplement or correct relevant materials, it shall notify the applicant within five days from the date of receipt of the bankruptcy application. The parties shall supplement and correct The period of relevant materials is not included in the period specified in Article 10 of the Enterprise Bankruptcy Law. "Accordingly, the judicial interpretation of this article clearly stipulates the period of notification. The period of notification here refers to the uniform period of notification for all materials that should be supplemented and corrected. Anyone who fails to notify the applicant within this period shall be deemed to have no need to supplement or correct the relevant materials, and the court shall not have the right to request the applicant to supplement or correct them, unless it is a supplement or correction to the supplement submitted by the applicant. . After the people's court has made a decision to accept an application for bankruptcy, if it is found that it is necessary to supplement the relevant materials, the parties concerned may still be required to do so, but it shall not reject the application for bankruptcy on the grounds that the application materials are unqualified. In the bankruptcy application stage, the court only decides whether the bankruptcy application should be accepted, so it has nothing to do with the case acceptance, that is, whether the debtor has a reason for the bankruptcy application, and other issues that should be resolved after the case is accepted, the court must not require the applicant Submit evidence materials at this time, and must not hinder the parties from exercising their right to apply for bankruptcy normally by requiring submission of materials that are not relevant to the acceptance of the case.

Contents of bankruptcy acceptance review

According to the provisions of Articles 2, 7, and 8 of the Enterprise Bankruptcy Law, it is generally believed that the examination of bankruptcy applications includes both formal and substantive examinations. The formal examination is to determine whether the bankruptcy application has the application form prescribed by law. The examination is to examine the jurisdiction of the court and the completeness of the written materials required to be submitted in accordance with the law. The examination of the substantive requirements is to judge whether the application meets the starting conditions of the bankruptcy procedure, and mainly includes the applicant's subject qualification, the debtor's subject qualification, and whether the debtor has a bankruptcy cause. In theory, there is also a saying that only a formal review is required.

Rejection of bankruptcy adjudication

For a decision not to accept an application for bankruptcy, the people's court shall, after receiving the application for bankruptcy and related evidence, through formal examination and substantive examination consider that it does not meet the bankruptcy conditions, it shall make a decision of inadmissibility according to law. By refusing to accept the bankruptcy application, the people's court can effectively prevent creditors from abusing the bankruptcy application to damage the debtor's business credit and other legitimate rights and interests. It can also prevent the debtor from using the name of bankruptcy to evade debt and damage creditors' legitimate rights and interests. According to the provisions of Article 12 of the Bankruptcy Law, the ruling of not accepting an application for bankruptcy shall be served on the applicant within 5 days from the day it is made, and the reasons for rejection shall be stated. If the applicant is dissatisfied with the ruling, it may appeal to the people's court at the next higher level within 10 days from the date of service of the ruling.

For rejection of bankruptcy application after acceptance. Because the substantive review when accepting a bankruptcy case is a review of superficial facts, there may be situations in which the debtor does not actually have a cause of bankruptcy. Therefore, after being accepted, the people's court has the opportunity to determine the truth of the apparent facts by further examining the evidence and understanding the situation. Article 12 (2) of the Bankruptcy Law stipulates that after accepting an application for bankruptcy and before ruling on bankruptcy, the people's court found that the debtor did not have the bankruptcy provided for in Article 2 of the Bankruptcy Law or (in the case of a creditor application) Article 7 (2) If there are reasons, the application can be rejected to end the bankruptcy proceedings. An applicant for bankruptcy who refuses to accept the ruling on rejection of an application for bankruptcy may file an appeal with the people's court at the next higher level within 10 days from the date of service of the ruling.

Bankruptcy adjudication adjudication

Delivery

Article 11 of the Bankruptcy Law stipulates that, when a people's court accepts an application for bankruptcy, it shall serve a ruling on acceptance of the application for bankruptcy within 5 days from the date of the ruling. The object of service shall be the applicant if the debtor applies or the liquidation responsible person applies; if the creditor applies, it shall be the applicant and the debtor. The delivery of the adjudication shall be delivered directly to the recipient. If direct delivery is difficult, it may be delivered by other methods prescribed in the Civil Procedure Law according to the actual situation.

In the case of a creditor's application for bankruptcy, the applicant cannot provide information about the debtor's property, creditor's debt, financial accounting, and employee's claims that are closely related to the bankruptcy case of the enterprise. The case protects the legitimate rights and interests of creditors and debtors. The law stipulates that the debtor shall, within 15 days after receipt of the decision to accept a bankruptcy application, submit to the people's court a statement of property status, debt inventory, debt inventory, relevant financial and accounting reports, and employee wages. Obligation to pay and payment of social insurance costs. Violations of this obligation shall be investigated for legal liability in accordance with Article 127 of the Bankruptcy Law.

2. Appointment of managers

Article 13 of the "Bankruptcy Law" stipulates: "If the people's court decides to accept an application for bankruptcy, it shall also designate an administrator." In view of the fact that in practice the supervision of the debtor's property may go out of control after the case is accepted and before the bankruptcy declaration, that is, From the acceptance of the case to the declaration of bankruptcy, it often takes a certain trial period. Since the property and affairs of the bankrupt enterprise are still in the hands of the management of the enterprise, they have ample opportunity to transfer, privately divide or waste the property of the enterprise, and conceal, destroy or tamper with it. Corporate accounts. The "simultaneous designation" stipulated in this article is a powerful measure to protect the legitimate rights and interests of creditors and to ensure the fairness and effectiveness of bankruptcy procedures. The so-called bankruptcy administrator refers to a specialized agency responsible for the management, disposition, business operations, and the preparation and implementation of bankruptcy plans during the course of bankruptcy proceedings. The primary responsibility of the administrator is to take over the debtor's property and business affairs, so that all the debtor's property is subject to the ruling of the people's court to start bankruptcy proceedings.

At this stage, other countries often adopt the method of setting up temporary administrators to solve the problem of supervision of debtor's property. For example, the acceptance of bankruptcy proceedings in the UK bankruptcy law is initiating, so before the bankruptcy trustee is created, the Ministry of Trade and Industry appointed the temporary official receiver of the debtor's property. The reason for setting up an interim administrator rather than directly appointing the administrator during the acceptance stage of a bankruptcy case is because, on the one hand, some national legislation requires that the administrator be selected by the creditors' meeting, or that it needs to be consulted although it is elected by the court. After the acceptance of a bankruptcy case, it takes a certain time for the creditors' meeting to be convened. Before that, a formal administrator cannot be elected, and the court or the competent authority must first appoint a temporary administrator. On the other hand, before the declaration of bankruptcy was made, the debtor was not a bankrupt. Although the right to manage and dispose of property was strictly restricted, it was not completely deprived. It was more appropriate to set up a temporary administrator who mainly played a supervisory role. Its responsibilities include: (1) reporting to the court on the debtor's related activities, participating in public investigations of the debtor's behavior, transactions and property conditions, and criminal investigations when there is a suspected crime; (2) ensuring the integrity of the bankruptcy report; ( 3) Acting in the capacity of trustee for bankruptcy; (4) Convening the first meeting of creditors and acting as chairman; (5) For the benefit of creditors and upon the application of creditors, appointing a special manager to operate the debtor's business, exempting him if necessary Position, etc.

3. Notice announcement

The people's court accepts an application for bankruptcy, and the bankruptcy proceedings are initiated. In order to enable the various stakeholders of the bankrupted enterprise to participate in the bankruptcy proceedings in a timely manner to exercise their rights or perform their obligations in accordance with the requirements of the bankruptcy proceedings, the people's court should notify the creditors as soon as possible after the decision to accept the bankruptcy application is made and notify all interested parties by announcement. people.

According to Article 14, paragraph 2 of the Bankruptcy Law, the people's court shall notify known creditors within 25 days from the date of the decision to accept the application for bankruptcy and make an announcement. The notice and announcement shall specify the following: (1) the names of the applicant and the respondent; (2) the time for the people's court to accept the application for bankruptcy; (3) the time limit, place and precautions for reporting claims; (4) The name or name of the manager and the address where it deals with matters; (5) the debtor's debtor or property holder shall request the manager to pay off the debt or deliver the property; (6) the time and place of the first creditor meeting; (7) Other matters that the people's court deems necessary to be notified and announced.

The announcement targets unspecified subjects. For interested parties, all matters that have been announced are deemed to be known. The significance of the announcement is to enable unknown creditors and other interested parties to learn as much as possible about the facts and related matters of the acceptance of the bankruptcy application, and to make the bankruptcy procedure automatically bind the legal relationship between them and the debtor. The "other interested parties" mentioned here include the debtor of the debtor enterprise in this case, the holder of the property of the enterprise, the investor, employees of the enterprise, and the counterparty of the contract to be performed, and enjoy the rights to the property held by the enterprise. People returning rights, and others who have rights or obligations to the enterprise.

Bankruptcy acceptance legal effect after acceptance of bankruptcy application

Obligations of persons involved in the bankruptcy debtor

1. Scope of obligations of the debtor

The acceptance of the bankruptcy application by the people's court marked the official start of bankruptcy proceedings. In order to prevent the debtor from maliciously disposing of the property and ensure that all creditors get a fair settlement, after the court accepts a bankruptcy case, the debtor loses the right to dispose of its property. After the commencement of the bankruptcy proceedings, the administrator will take over the bankrupt enterprise and carry out a series of tasks including taking over the debtor's property, investigating the debtor's property, managing and disposing of the debtor's property. Article 15 (1) of the Bankruptcy Law stipulates that from the date when the people's court accepts an application for bankruptcy to the debtor until the end of the bankruptcy proceedings, the relevant personnel of the debtor undertake the following obligations: (1) to properly keep its possession and Managed property, seals, account books, documents and other materials; (2) work in accordance with the requirements of people's courts and administrators, and truthfully answer inquiries; (3) attend creditors' meetings and answer creditor's inquiries truthfully; (4) without the people The court may not leave the place of residence; (5) No new directors, supervisors or senior management personnel of other enterprises shall be allowed.

According to the interpretation, the debtor and related personnel shall bear the following three obligations:

(1) Cooperation and assistance obligations. Relevant personnel of the debtor shall properly keep the materials, seals, account books, documents and other materials in their possession and management, and shall work in accordance with the requirements of the people's court and the administrator. Among them, the former obligation has the nature of property preservation. The preservation of the debtor's property and the important information related to it are essential to the orderly and effective conduct of the insolvency proceedings. If the debtor refuses to hand over the property, seals, account books, documents and other materials to the administrator, or forges or destroys relevant property evidence and makes the property unclear, the people's court may impose a fine on the person directly responsible according to law. The latter obligation is of great significance for the people's court to hear bankruptcy cases and for the administrator to take over and manage the debtor's property. The "work" referred to here includes not only the production and operation and management affairs of the enterprise, but also specific work in progress, such as assigning an outbound investigation or debt collection by the managed person, consulting information and making documents as required by the court or manager Wait.

(2) Obligation to provide information. Relevant personnel of the debtor enterprise have the obligation to disclose information on two special objects in the bankruptcy law. The first is the obligation to disclose information to the people's court and administrator, that is, the obligation to truthfully answer the inquiries of the people's court and administrator. The second is the obligation to disclose information to creditors, including the obligation to attend creditors' meetings and truthfully answer creditor's inquiries.

(3) Subsidiary obligations. The relevant person of the debtor also has two subsidiary obligations related to the performance of the above obligations: one is the obligation not to leave without permission, that is, he must not leave the place of residence without the permission of the people's court; Newly appointed directors, supervisors and senior managers of other enterprises.

2. Definition of "relevant person".

According to the definition of Article 15 (2) of the Bankruptcy Law, the "related persons" referred to in paragraph 1 include two types of persons. One is the person directly regulated by the law, that is, the legal representative of the enterprise; the other is the person determined by the people's court, and its scope includes the financial management personnel and other business management personnel of the enterprise, such as the directors, supervisors, and managers of the enterprise , Financial director and others.

Individual settlement actions for bankruptcy acceptance are invalid

To guarantee fair settlement to all creditors, Article 16 of the Bankruptcy Law stipulates: "After the people's court accepts an application for bankruptcy, the debtor's debt settlement to individual creditors is invalid." The "individual settlement" referred to here must have the following requirements: It must be the debtor's settlement; it must be the debtor's settlement of the actual debt; it must be the debtor's settlement after the bankruptcy application is accepted.

However, if the debtor provides a real right security to the creditor with its own property, its debt settlement to the creditor within the value of the collateral is not restricted by the above provisions. Because the secured creditor of the real right enjoys the priority to receive the collateral, the settlement of his debt can enable the debtor to recover the secured property, which can be used for business operations or the settlement of all creditors, without violating the principle of fair settlement. To this end, Article 37 of the Bankruptcy Law stipulates: "After the people's court accepts an application for bankruptcy, the administrator can recover the pledge or lien by paying off the debt or providing the guarantee accepted by the creditor. The debt settlement or replacement provided for in the preceding paragraph Guarantee, when the value of the pledge or lien is lower than the amount of the secured debt, the current market value of the pledge or lien is limited. "

The individual settlement provided for in Article 16 of the Bankruptcy Law is invalid, and it is absolutely invalid, which means that anyone can claim invalidity. This situation is different from the individual settlement within six months before the acceptance of the bankruptcy application under Article 32. The latter is revocable, and only managers can request revocation. In accordance with the legal consequences of invalid behavior in civil law, in the case of individual liquidation being invalid, the creditor receiving the liquidation is obliged to return to the original state and return the property benefits obtained from the liquidation.

In order to effectively prevent individual settlement actions, after accepting a bankruptcy case, the people's court shall promptly notify the debtor's bank account to stop handling the debtor's settlement business. The account bank shall pay the necessary expenses to maintain the debtor's normal production and operation, which shall be approved by the people's court. After receiving the notice from the people's court, the bank that opened the debtor's account shall not use its authority to deduct the debtor's existing deposits and remittances to repay the bank loans owed to it. If the deposit bank illegally deducts the deduction, the deduction is invalid, and the deduction should be returned. In case of refusal to return, the people's court shall rule on the return and issue a notification of assistance to the bank where the account is opened. At the same time, it may punish the relevant personnel and those directly responsible in accordance with the provisions of the Civil Procedure Law on coercive measures.

Bankruptcy acceptance releases debtor property preservation and suspension of enforcement proceedings

The goal of the bankruptcy system is to achieve fair settlement among all creditors through collective procedures. Therefore, after the commencement of the bankruptcy proceedings, individual creditors are not allowed to be satisfied through individual settlements, so that the settlement interests of other creditors are impaired. Property preservation measures and enforcement procedures that have occurred before the acceptance of a bankruptcy case and serve civil proceedings are aimed at realizing individual claims. Bankruptcy proceedings represent the collective settlement interests of all creditors 'rights. In terms of legal policies, the protection of such collective interests is a priority over the protection of individual creditors' interests. Therefore, after the commencement of the bankruptcy proceedings, Property preservation measures should be lifted, and enforcement procedures should be suspended so that the debtor's property and the exercise of creditors' rights are incorporated into a unified collective procedure.

After the court accepted the bankruptcy application, because the debtor's property was protected by the effect of prohibiting individual liquidation preservation, as an extension, other preservation measures concerning the debtor's property should also be lifted. It includes not only civil litigation preservation measures, but also administrative administrative punishment procedures, such as property seizure and seizure measures adopted by customs, industrial and commercial administrations, and other relevant measures taken by public security and judicial departments in criminal proceedings. In addition, if the people's court decides to reject the bankruptcy application after accepting the case, the court should notify the people's courts that have released the preservation measures against the debtor's property while restoring the preservation measures, while making the decision to reject the bankruptcy application. In this case, the property security measures that have been canceled should be automatically restored or restored to their original status in order to protect the rights and interests of those who originally adopted the property security measures, and to avoid the malicious use of bankruptcy applications to achieve the removal of other people's property security measures. Be the first to commit fraud for property preservation.

According to the provisions of Article 19 of the Bankruptcy Law, after the people's court accepts an application for bankruptcy, the enforcement procedures concerning the debtor's property shall be suspended. According to jurisprudence, two conflicting enforcement procedures cannot coexist on the same property. Therefore, after the commencement of the bankruptcy procedure, other enforcement procedures concerning the debtor's property should be suspended. All enforcement procedures concerning the debtor's property were suspended, including not only civil execution but also administrative and criminal execution. According to this provision, first, the execution procedure that has been initiated should be suspended; if it has been concluded but has not yet been applied for or transferred for execution, no new execution procedure can be initiated. Creditors shall, with effective legal documents, declare their claims to the people's courts that accept bankruptcy cases. However, this provision has no retroactive effect on the procedures that have been executed and the properties that have been partially executed. Secondly, the enforcement procedures that are limited to property should be suspended, and non-property enforcement procedures against the debtor can continue. Third, the creditor with real property security, ie the ex-right holder, shall not be bound by the suspension of the execution procedure of the collateral unless the parties apply for reorganization procedures. The purpose of the suspension of individual enforcement is to protect the fair settlement of all creditors. The ex-right holder has a right of priority for the collateral, which is not only a priority for the price of the collateral but also includes a variety of restrictions on debt settlement that are not subject to bankruptcy and reconciliation procedures. Suspending the execution procedure of the collateral by the ex-rightholder cannot guarantee the fair settlement of ordinary creditors. Therefore, the effect of the suspension of execution should not be lower than that of the collateral by the ex-rightholder.

Acceptance of bankruptcy shall not enforce harmful claims

The initiation of bankruptcy proceedings usually means that the debtor's responsible property is inadequate. At this time, if the debtor's disposition of its property results in the further reduction of its responsible property, it is bound to damage the interests of the bankrupt creditor. Article 17 of the Bankruptcy Law stipulates that after the people's court accepts an application for bankruptcy, the debtor of the debtor or the holder of the property shall pay the debt to the administrator or deliver the property. On the one hand, this is because after the bankruptcy application is accepted, the debtor enterprise has lost the right to manage and dispose of its property, and has no right to accept the settlement of the debt and the delivery of the property. On the other hand, it is also to prevent the property from being concealed, privately distributed or squandered or destroyed after the property is delivered to the debtor's enterprise, thereby damaging the creditors' legitimate rights and interests. If the debtor or the property holder of the debtor intentionally violates the provisions of the law to pay off the debts or deliver the property to the debtor, causing the creditor to suffer losses, his obligation to pay off the debts or deliver the property shall not be exempted.

It should be noted that if the debtor or property holder of the debtor intentionally violates the rules to pay off the debt or deliver the property to the debtor, but the debtor will receive the payment or delivery of the property to the administrator, and the creditor has not suffered any loss, it is not necessary Undertake civil liability. In response to this, Article 76 of the "Bankruptcy Law" in Taiwan, stipulates that "the debtor of a bankrupt is a liquidator who does not know the facts after the bankruptcy is declared, and is able to fight against a bankrupt creditor. The bankruptcy consortium shall be limited to the benefits to the bankruptcy creditor. "Accordingly, if the bankrupt's debtor pays off the debt to the bankrupt, and the bankruptcy receives all the property and transfers it to the bankruptcy administrator, the bankruptcy creditor's interests are not lost, The debtor pays to the bankrupt, but the consequences are the same as those directly delivered to the bankruptcy administrator, so it is confirmed that the debtor's settlement has legal effect and no longer will be punished.

In practice, the debtor's debtor or property holder pays the debt to the debtor or delivers the property, sometimes mainly due to negligence. Because the debtor's obligation is only to repay the debt on time, how the creditor's business situation has nothing to do with it, so it is often not paid special attention to whether it enters bankruptcy proceedings. To this end, Article 14 of the Bankruptcy Law stipulates that the people's court shall inform the debtor or the property holder of the debtor in the notice and announcement issued after the application for bankruptcy is accepted, which shall serve as a reminder. Role, so that it bears the corresponding duty of care, and then as a criterion to distinguish whether the parties intentionally violated the provisions to pay off debts or deliver property to the debtor. In practice, the determination of the effectiveness of liquidation has a lot to do with the burden of proof. According to the general principle, after the bankruptcy case is accepted, the court issues a notice and announcement to inform the bankrupt that the debtor should not pay off the debt or deliver the property before the bankruptcy. . If the administrator fails to prove that the debtor has known the bankruptcy facts and settled maliciously, the settlement is effective. After the court issues relevant notices and announcements, if the debtor pays off the debt or delivers the property to the bankrupt, the law presumes that it is a known bankruptcy fact and is maliciously settled. If the debtor cannot prove that the settlement is in good faith, it will bear Loss caused.

Settlement of bankruptcy acceptance pending contracts

Whether a commercial contract that has not been fulfilled or has not been completed before the commencement of the procedure, whether the enterprise continues to perform after entering into bankruptcy proceedings, has a bearing on the debtor's continued business and the value of the debtor's assets. In the case of bankruptcy, if the other party to the contract is allowed to refuse to perform the contract on the grounds that the debtor has or is expected to default, the debtor's business may be difficult to sustain and may even suffer a certain amount of property loss. On the other hand, given the current economic situation of the debtor, the performance of some contracts may become a heavy burden; sometimes in order to adjust the business plan or reduce the scale of business, some contracts need to be terminated. If the other party to the contract is allowed to claim that the contract is actually performed, the debtor may be overwhelmed and cause unnecessary property reduction.

1. Manager's option

The manager has the right to choose whether to perform or refuse to perform a contract that has been established but not fulfilled at the beginning of the procedure. If the manager chooses to perform, the contract counterparty has an obligation to treat the payment. If the manager refuses to perform, the counterparty can only be compensated in the proceedings as a bankruptcy claim due to the contract's non-performance. This is a consistent rule across countries. The provisions of the bankruptcy law on the manager's option are as follows: (1) The scope of the option. After the commencement of the bankruptcy proceedings, the administrator has the right to decide whether to continue to perform or terminate the contract that meets the following conditions: first, the dual service contract; second, the contract established before the acceptance of the bankruptcy application; third, the parties have not yet performed or Completed contract. In principle, the provisions of this Article shall not apply if one party to the contract has performed its duties and the other party has not performed or has not performed them. At this time, if the claimant is the bankrupt debtor, the manager may request the counterparty to perform the debt according to the contract; if the claimant is the counterparty, it can only declare the claim according to the bankruptcy procedure. (2) The scope of the right of choice. It can only be decided that the contract will continue to be performed or cancelled. The following actions are not within the scope of the manager's option: continued performance or termination with conditions or deadlines; extension of the exercise time of the option or specified conditions for the exercise of the option; modification or addition of contract terms when it is decided to continue; When performing, it deprives the counterparty of the right to request a guarantee in accordance with Article 18 (2) of the Bankruptcy Law and the right of cancellation related to it; when the contract is terminated, the debtor is released from the liability for breach of contract. Such acts of the manager shall not have the effect of exercising the option without the consent of the counterparty. At this time, the administrator is deemed to have not exercised the option, and the counterparty has the right to exercise the right to sue and dismiss as provided for in Article 18, paragraph 1, of the Bankruptcy Law. As for the debtor's non-performance of the contract before the commencement of the procedure, whether the manager can claim the continued performance or termination of the contract, according to the legislative policies and relevant provisions of the bankruptcy law, the answer is yes. (3) The exercise and extinction of options. According to Article 18 (1) of the Bankruptcy Law, the administrator has the option to choose within 2 months from the date of acceptance of the bankruptcy application. During these two months, the counterparty has the right to sue. After the counterparty urged, the manager had a 30-day response period. The method of exercising the right of choice is notification of meaning, that is, the manager informs the counterparty of the decision to terminate the contract or continue to perform. If the administrator fails to exercise the option within 2 months from the date of acceptance of the bankruptcy application, or fails to respond within 30 days from the date of the counterparty's notification, the option is extinguished and the contract is deemed to be terminated. (4) The legality of the right of choice. The manager's right to choose a contract to perform in bankruptcy proceedings is a statutory right. Its purpose is to achieve public policy and bankruptcy goals and to protect the interests of most creditors first. Therefore, the parties must not exclude or restrict them in advance with agreed terms.

2. Counterparty's right to sue and security claim.

(1) Counterparty's right to sue. In the case of the manager's neglect to exercise the option, the rights of the counterparty are in an unstable state, which is detrimental to the security of the transaction. Therefore, the law gives the counterparty the right to sue to protect its interests. The basic content of the right to sue is that if the manager does not indicate that he will continue to perform or terminate the contract, the counterparty may request the manager to make a statement of performance or non-performance. To waive performance. The Bankruptcy Law stipulates that within two months from the date of acceptance of the bankruptcy application, as long as the administrator has not exercised the option, the counterparty has the right to sue. The so-called reminder is to require the manager to make his decision to terminate or continue to perform the contract as soon as possible. The maximum period for the manager to reply to the reminder is 30 days. Beyond this period, the contract is deemed to be terminated.

(2) The security right of the counterparty. If the manager decides to continue to perform the contract, the counterparty has no right to object, but has the right to ask the other party to provide guarantee for the treatment and payment it deserves. If the manager does not provide a guarantee, the contract is deemed to be terminated. Generally speaking, the contract that the manager chooses to continue to perform is a contract that benefits the debtor's property and thus benefits all creditors. Therefore, the obligation to treat and pay according to the contract is a mutual benefit debt, that is, a debt that should be settled by the debtor's property at any time in accordance with Article 42 (1) and 43 of the Bankruptcy Law. However, since the debtor is in bankruptcy, it is doubtful whether it does have sufficient funds to pay off this debt. If the manager fails to fulfill his payment obligations before or at the same time as the counterparty, there is a risk that the counterparty will not be paid off afterwards. Therefore, the law gives a counterparty the right to ask the other party to provide a guarantee.

Bankruptcy acceptance other

Article 20 of the Bankruptcy Law stipulates that, after the people's court accepts an application for bankruptcy, the civil lawsuit or arbitration of the debtor that has begun but not yet concluded shall be suspended; the lawsuit or arbitration shall continue after the administrator takes over the debtor's property. Civil litigation or arbitration is a procedural system for resolving disputes over the debtor's property or legal relationship. After the commencement of bankruptcy proceedings, different types of litigation or arbitration have different effects on bankruptcy proceedings.

Article 21 stipulates that, after the people's court accepts an application for bankruptcy, civil proceedings concerning the debtor can only be brought to the people's court that accepts the application for bankruptcy. The "civil action concerning the debtor" mentioned here includes civil actions against the debtor and civil actions against the debtor. In other words, in the bankruptcy proceedings, the bankruptcy acceptance court becomes the processing center of the debtor's property and legal relationship, and all civil actions related to it should be brought together here.

Bankruptcy Acceptance References

1. Tang Weijian: "Interpretation and Application of the New Enterprise Bankruptcy Law", China Legal Publishing House, 2006.

2. Shi Tiantao: Commercial Law, Law Press, 2010 edition.

3. Xinxin Wang: Principles and Case Tutorials of Bankruptcy Law, Renmin University of China Press, 2015.

4. Zhang Shanbin: "Review of Bankruptcy Law Research", Wuhan University Press, 2018 edition.

5. Li Yongjun, Wang Xinxin, and Zou Hailin: "Bankruptcy Law", China University of Political Science and Law Press, 2009.