What Is a Breakage Cost?

Bankruptcy costs refer to fees paid for bankruptcy creditors' common interests in bankruptcy proceedings. China's appellation of consortium debt and consortium expenses. Article 34 of the Chinese Enterprise Bankruptcy Law (Trial) stipulates that bankruptcy costs include: (1) the costs required for the management, sale, and distribution of bankruptcy property, including the cost of hiring staff; (2) the costs of litigation in bankruptcy cases; ( 3) Other expenses paid in the bankruptcy proceedings for the common interests of creditors. Bankruptcy expenses shall be paid from the bankruptcy property at any time. If the bankruptcy property is not sufficient to pay the bankruptcy expenses, the court shall declare the bankruptcy proceedings to an end. ^[1]

Bankruptcy costs

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(1) Litigation costs in bankruptcy cases. Including: 1) the costs of bankruptcy application; 2) the costs incurred by the bankruptcy administrator in recovering the bankruptcy property and other legal proceedings, and the litigation costs incurred by the bankruptcy administrator in the name of the bankruptcy enterprise; Other costs incurred in the litigation process, such as evidence preservation fee, investigation fee, property preservation fee, announcement fee, appraisal fee, service fee, inspection fee, and other litigation fees that the people's court deems to be paid.

(2) Management, price change and distribution of debtor (bankrupt) property expenses. Including but not limited to the cost of maintaining the debtor's property, maintenance and repair costs, auction or change-sale costs, change of ownership costs, warehousing costs, transportation costs, insurance costs, evaluation costs, announcements and notifications to creditors of the delivery of the property , Depositing pre-allocated property expenses, etc.

(3) Remuneration of the bankruptcy administrator, the cost of hiring staff, and the cost of performing duties. It should be noted that the payment of remuneration of the bankruptcy administrator must be submitted to the people's court in written form and reviewed and approved in order to prevent the situation in which he pays himself. ^[2]