法经发[1991]35号
（Promulgated on 7 November 1991.）
颁布日期：19911107 　实施日期：19911107 　颁布单位：最高人民法院

In accordance with the Enterprise Insolvency Law， actual judicial experience， and in order to correctly implement the PRC， State Enterprise Insolvency Law （Trial Implementation） （hereafter， “Enterprise Insolvency Law”）， the following Opinion regarding several questions on insolvency litigation is now issued：

PART ONE　JURISDICTION

1： Enterprise insolvency cases shall be under the jurisdiction of the People's Court where the debtor is located. “Where the debtor is located” shall refer to where the main administrative organization of an enterprise is located.

2： Basic-level People's Courts shall generally have jurisdiction over the insolvency cases of enterprises examined and approved by and registered with county， county-level municipality or district industrial and commercial administrative authorities.

Intermediary People's Courts shall generally have jurisdiction over cases of insolvency involving enterprises examined and approved by and registered with regional， regional-level municipality or higher level industrial and commercial administrative authorities.

Jurisdiction for individual insolvency cases may be handled in accordance with Paragraphs 1 and 2 of Article 39 of the PRC， Civil Procedure Law （hereafter， “Civil Procedure Law”）。

PART TWO　APPLICATION FOR INSOLVENCY

3. Applications for insolvency must be in written form.

4. Where an application for insolvency is submitted by a creditor， the following materials must be submitted to a People's Court：

（1） the facts of the loan and relevant evidence；

（2） the nature and amount of the loan；

（3） whether or not the loan is secured by property， and if it is， evidence of such security； and

（4） evidence that the debtor is unable to repay the loan on time.

5. Where an application for insolvency is submitted by a debtor， the following materials must be submitted to a People's Court：

（1） an explanation of the circumstances regarding losses incurred by the enterprise；

（2） an accounting statement；

（3） a report detailing the enterprise's assets and the location of tangible assets；

（4） a detailed list of creditors and debtors （including the names and domiciles of creditors and debtors， banks at which they have accounts， time during which the loan took place， amount of the loan， whether or not disputes exist， etc）；

（5） the consent to the application for insolvency of the superior department in charge of the insolvent enterprise or a department authorized by the government； and

（6） other materials that a People's Court considers must be provided in accordance with the law.

PART THREE　ACCEPTANCE OF INSOLVENCY CASES

6： After receiving an application for insolvency， a People's Court shall conduct an investigation in accordance with Articles 3， 7 and 8 of the Enterprise Insolvency Law， and within seven days， shall decide whether or not to place the case on file.

Where a People's Court， after investigation， considers that an application for insolvency requires corrected or supplementary materials， it may order the applicant to provide corrected or supplementary materials within a set time period. Where corrected or supplementary materials are provided on time， within seven days of the receipt of such materials， a People's Court shall decide whether or not to place the case on file. Where corrected or supplementary materials are not provided on time， the application shall be deemed to have been withdrawn.

7： Where an applicant does not agree with the decision of a People's Court to reject an application for insolvency， such applicant has the right to appeal to the immediately superior People's Court. The time limit for appeal is 10 days.

8： The phrase “inability to repay the loan on time” in Paragraph 1 of Article 3 of the Enterprise Insolvency Law shall refer to：

（1） the term of repayment of the loan has already expired；

（2） the creditor has already requested repayment； and

（3） the debtor clearly lacks the ability to repay the loan.

Where the debtor stops payments on a loan that has fallen due and continues not to pay， and if there is no evidence to the contrary， such debtor may be deemed “unable to repay the loan on time”。

9： After a People's Court accepts an insolvency case， it shall organize a collegiate bench to conduct a hearing.

10： Within ten days of accepting an insolvency case， a People's Court shall issue a public notice. Such public notice， in addition to being posted within the public notice railings of the People's Court that has accepted the insolvency case， shall be published in local or national periodicals in accordance with the details of the case （such as the districts or cities over which the creditors are distributed， the districts or cities in which the assets available for distribution are located， etc）。 Public notices shall include the following information：

（1） when the case was placed on file；

（2） the debtor（s） involved in the insolvency case；

（3） time limit in which and location at which to lodge claims， and the legal consequences of failure to lodge claims on time； and

（4） the time and location of the first creditors' meeting.

11： Within ten days of accepting an insolvency case， a People's Court shall notify the debtor， and within 10 days of accepting a detailed list of debts submitted by the debtor， such court shall notify known creditors.

The notice to known creditors shall include the information specified in Items 3 and 4 of Article 10 of this Opinion.

12： After a People's Court accepts an insolvency case， cases of other economic disputes involving the insolvent enterprise as a debtor shall be handled in accordance with their different circumstances as follows：

（1） enforcement shall be suspended on cases that have already been decided but have not been enforced， and claims shall be lodged by the creditor on the strength of valid legal documents with the People's Court that accepted the insolvency case；

（2） litigation shall be suspended on cases that have not yet been decided and in which there are no other parties jointly liable， and claims shall be lodged by the creditor with the People's Court that accepted the insolvency case； and

（3） litigation shall be suspended on cases that have not yet been decided and in which there are other parties jointly and severally liable， and claims shall be lodged by the creditor with the People's Court that accepted the insolvency case. After the insolvency process is completed， the hearing shall continue.

13： After a People's Court accepts an insolvency case， other economic dispute cases involving the insolvent enterprise as a creditor that cannot be settled within 3 months of being accepted by a People's Court shall be transferred to the People's Court that accepted the insolvency case and shall be handled by such People's Court in accordance with Articles 45 and 46 of this Opinion.

14： Where， after a People's Court accepts an insolvency case， it is discovered that a case involving the insolvent enterprise as a creditor exists with another People's Court and is not likely to be decided within 3 months， such People's Court shall be ordered to transfer the case.

15： Where， during civil proceedings or civil enforcement， a People's Court learns that a debtor is unable to repay a debt on time， such court shall notify such debtor that it may apply for insolvency with the People's Court where it is located.

Where an application for insolvency is submitted， the People's Court where the debtor is located shall declare the debtor insolvent in accordance with the law.

Where an application for insolvency is not submitted， such court shall not exercise its powers to declare the debtor insolvent. The original proceedings or enforcement process may continue.

16： Where a debtor has undertaken to act as a guarantor for another work unit in accordance with Paragraph 2 of Article 10 of the Enterprises Insolvency Law， such debtor must inform the relevant parties within 5 days of receipt of a notice that a People's Court has placed the insolvency case on file. After a creditor has been informed of the details of a guarantor's （debtor's） insolvency， such creditor has the right to choose whether or not to include the debt owed to it in the insolvency claims. Where the creditor does not participate in the insolvency process and does not notify the guarantor， the obligations of a guarantor （debtor） to guarantee the debt are terminated. Where the creditor does participate in the insolvency process， the amount of the debt owed to the creditor at the time of the declaration of insolvency shall be the insolvency claim. After participation in the distribution of funds， the creditor may seek repayment from the guarantor for the portion of the debt that has still not been repaid

17： After a People's Court has published a public notice regarding its placing of a case on file， a creditor may only lodge claims and may not initiate new proceedings with the People's Court that has accepted the insolvency case. An application to lodge a claim shall contain the information listed in Items 1 to 3 of Article 4 of this Opinion.

18： The People's Court shall assign a particular individual to be responsible for the registration and recording of claims that are lodged.

19： After accepting an insolvency case， a People's Court shall promptly notify the debtor that it must immediately cease repayment of debts upon receipt of such notice. Payments that must be made for the normal production and operation of the debtor must be investigated and approved by the People's Court before the establishment of the liquidation committee.

Where debtors， upon receipt of a notice from a People's Court regarding the cessation of repayment of debts， continue to repay some creditors， and actions that are among those listed in Paragraph 1 of Article 35 of the Enterprise Insolvency Law， shall be ruled void by the People's Courts. The People's Courts shall recover such property and may penalize the legal representative， the person responsible at the superior department in charge or any other directly responsible parties in accordance with Articles 102 and 104 of the Civil Procedure Law.

20： After accepting an insolvency case， a People's Court must promptly notify the bank at which the debtor has an account that such bank must cease the handling of settlement business for the debtors' repayment of debts. The payment of expenses by such bank required to maintain the normal production and operation of the debtor must be approved by a People's Court.

21： After a bank at which a debtor has an account receives notice from the People's Court， it may not deduct or transfer funds from deposits that the debtor has already made or from remittances received to repay loans. Deductions or transferrals shall be void， and funds deducted or transferred must be returned. If a bank refuses to return such funds， the People's Court shall order that they be returned and shall formulate and issue an enforcement assistance notice to such bank， and may penalize relevant personnel and directly responsible parties in accordance with the provisions in Articles 102 and 104 of the Civil Procedure Law.

22： After accepting an insolvency case， a People's Court shall issue a public notice to all staff and workers of the enterprise requesting them to protect the property of the enterprise and not to allow illegal disposal of account books， documents， materials or seals of the enterprise， or concealment， illicit distribution， gratuitous transfer or underselling of the property of the enterprise.

Where， prior to the conclusion of the insolvency process， the legal representative of the insolvent enterprise leaves his post without authorization or otherwise evades his responsibilities， or refuses to handle handover procedures for the liquidation committee， or engages in any of the actions listed in Article 102 of the Civil Procedure Law， a People's Court may impose fines or detainment in accordance with the seriousness of the case. If the matter constitutes a crime， criminal liability shall be pursued.

PART FOUR　CREDITORS' MEETINGS

23： The first creditors' meeting shall be presided over by a People's Court. Succeeding creditors' meetings shall be presided over by the chairman of the creditors' meetings.

24： When convening the first creditors' meeting， the People's Court shall announce the results of the investigation of the qualifications of creditors， and shall appoint and announce the chairman of the creditors' meetings， the authority of the creditors' meetings and other relevant matters. Such court shall also circulate a notice concerning the basic condition of the production， operation， assets and liabilities of the debtor.

25： Where the chairman of the creditors' meetings convenes a creditors' meeting， he shall notify the People's Court three days prior to issuing a notice to convene a meeting.

26： Creditors may commission an agent to attend creditors' meetings and exercise such creditors right to vote. The agent shall submit to the People's Court or to the chairman of the creditors' meetings， power of attorney signed and sealed by the commissioning creditor.

27： Seven days before the convening of a creditors's meeting （20 days if in another area）， the convener shall notify creditors of such matters as the time， place， content and purpose of the meeting.

28： For votes on resolutions at a creditors' meeting， the number of votes shall be calculated on the basis of the number of creditors attending the meeting that have the right to vote， and the quantity of creditors' rights represented by the votes shall be calculated on the basis of the quantity of creditors' rights held by the creditors.

29： In Paragraph 1 of Article 16 of the Enterprise Insolvency Law， the phrases “at least half” and “at least two-thirds” shall include half and two-thirds respectively， but the phrase “more than half” shall not include half.

30： The quantity of creditors' rights represented by a creditor that exercises its right to vote shall be calculated on the basis of the quantity of its creditors' rights determined by the creditors' meeting. If disputes arise concerning the quantity of creditors' rights determined by the creditors' meeting， a People's Court shall make a ruling after investigation and shall calculate such rights on the basis of the creditors' rights confirmed by such ruling.

31： Where an assets available for distribution plan submitted by a liquidation committee has still not been passed after being discussed several times by creditors' meetings， a People's Court shall make a ruling based on the specific details of the case in a timely manner.

32： The superior department in charge of the debtor may assign someone to attend creditors' meetings as a non-voting participant. The legal representative of the debtor must attend creditors' meetings as a non-voting participant and has an obligation to respond to the queries of creditors. Where such legal representative refuses to attend meetings as a non-voting participant， the People's Court may subpoena him in accordance with Article 100 of the Civil Procedure Law.

PART FIVE　RECONCILIATION AND REORGANIZATION

33： Where an enterprise has been petitioned for insolvency by its creditors， and the superior department in charge of it applies for such enterprise to undergo reorganization， a reorganization plan shall be submitted to a People's Court or to a creditors' meeting. The reorganization plan shall include the following：

（1） analysis of the reasons for the enterprise having reached the edge of insolvency；

（2） plan for the adjustment or establishment of a new leading group for the enterprise；

（3） feasibility concerning measures and reforms to be taken for the improvement of business management and measures to be taken for changes in production；

（4） methods of reducing losses and increasing profits； and

（5） term of reorganization （not to exceed two years） and objectives， etc.

34： Where an application for reorganization of an enterprise is made， a draft reconciliation agreement shall be submitted to a creditors' meeting. The draft reconciliation agreement shall include the following：

（1） sources of capital for debt repayment；

（2） method of debt repayment； and

（3） term of debt repayment.

If enterprises that apply for reorganization require a reduction of debts， the application shall also clearly state the amount of reduction requested.

35： Where the enterprise and the creditors reach a reconciliation agreement， after approval and publication of a notice by a People's Court， the insolvency process shall be suspended. Where an enterprise is unable to reach a reconciliation agreement with its creditors， a People's Court shall declare the enterprise insolvent.

36： During the reorganization period of an enterprise， the superior department in charge of the enterprise shall report the circumstances of the reorganization and the implementation of the reconciliation agreement periodically to creditors' meetings or to a People's Court.

37： During the reorganization period of an enterprise， where one of the conditions listed in Items 1 and 3 of Article 21 of the Enterprise Insolvency Law pertains to the enterprise， a portion of the creditors or all the creditors in the creditors' meetings have the right to apply for termination of reorganization.

38： During the reorganization period of an enterprise， where a People's Court discovers that one of the conditions listed in Article 21 of the Enterprise Insolvency Law pertains to the enterprise， such court shall rule to terminate reorganization of the enterprise and declare such enterprise insolvent.

39： After reorganization， where an enterprise is able to repay debts on time， it may only repay them in accordance with the term and amounts in the reconciliation agreement. However， the repayment of debts that are secured with property and for which priority rights have not been renounced shall not be so restricted.

During the time after an insolvency case has been accepted by the court but before insolvency has been declared without the consent of the People's Court， the creditor of a loan secured may not exercise priority rights.

40： After a People's Court has accepted an insolvency case， where the superior department in charge of an enterprise does not apply for reorganization， the People's Court may declare the enterprise insolvent in accordance with the law.

PART SIX　DECLARATION OF INSOLVENCY

41： A People's Court shall publicly declare an enterprise insolvent.

42： Where a People's Court declares an enterprise insolvent， it shall order the creditors and the debtors to come to the court， where a ruling shall be issued. Where a party refuses to come to the court， the validity of the ruling shall not be affected.

43： The ruling of a People's Court declaring the insolvency of the enterprise shall be legally valid from the date of its issue. From this date the insolvent enterprise shall cease production and operation activities， unless the People's Court or the liquidation committee considers it necessary for production and operation to continue.

44： When a People's Court rules to declare an enterprise insolvent， it may at the same time issue a public notice. The public notice shall include the following：

（1） the enterprise's losses， assets and liabilities；

（2） reasons for and legal basis of the declaration of insolvency of the enterprise；

（3） date of the declaration of insolvency of the enterprise； and

（4） protection of the insolvent enterprise's property， account books， documents， materials and seals， etc， after the declaration of its insolvency.

The public notice shall be sealed with the seal of the People's Court.

45： After declaring an enterprise insolvent， a People's Court shall order the debtor of the insolvent enterprise or the party in possession of the property to repay the debts or deliver the property to the liquidation committee.

46： After the debtor of the insolvent enterprise or the party in possession of the property receives the above notice from the People's Court， it shall repay the debts or deliver the property to the liquidation committee in accordance with the amounts and times specified in the notice. If there are any objections concerning the amount of debts or the type and quantity of property， or other matters specified in the notice， within seven days， a request may be made to the People's Court to issue a ruling. Where the term expires and repayment or delivery has not been made or any objections raised， enforcement may be taken after the liquidation committee applies for and the People's Court issues a ruling.

47： After a People's Court declares an enterprise insolvent， it shall order （with a copy of the ruling declaring the enterprise insolvent） the bank at which the enterprise has an account to restrict access to such bank account to sole use by the liquidation committee.

48： After a People's Court declares an enterprise to be insolvent， it may send copies of the ruling declaring the enterprise insolvent to relevant supervisory departments and auditing departments of the government

49： After an enterprise is declared insolvent， a People's Court shall appoint the necessary personnel that must be retained. The legal representative of the insolvent enterprise， together with finance and accounting， statistical， maintenance and security personnel must be retained. Other personnel required to be retained and the number of personnel to be retained shall be determined by the liquidation committee.

PART SEVEN　INSOLVENCY LIQUIDATION

50： Before a liquidation committee is established， a People's Court in consultation with the people's government of the same level shall， through official letters， appoint members to a liquidation committee from among professional personnel and departments such as the superior department in charge of the enterprise and the government departments in charge of public finance， industry and commerce， planning， auditing， taxation， commodity prices， labour and personnel. Once appointed， relevant work units and relevant personnel may not make excuses to evade their duties or leave their work without authorization. Where there is a true， objective reason that they may not continue their work， the People's Court may make a new appointment.

The head of the liquidation committee shall be appointed by the People's Court.

51： The liquidation committee may appoint a certain number of accountants from an accountancy firm and other personnel.

52： The liquidation committee is responsible to the People's Court， shall report its work to it， and shall accept the supervision of the People's Court. Where the actions of the liquidation committee damage the interests of creditors or are in violation of the law， the People's Court shall redress the matter， and may dismiss members of the liquidation committee that are not competent and appoint new members.

53： The liquidation committee shall attend creditors' meetings as non-voting participants and accept the supervision of the creditors' meeting. Where a decision of the liquidation committee violates the interests of creditors， creditors may apply to a People's Court for a ruling cancelling such decision.

54： After an enterprise is declared insolvent， the former legal representative of the insolvent enterprise shall organize finance and accounting personnel to complete the final financial accounting， maintenance personnel to draft a detailed list of assets， and business personnel to complete the settlement of purchases and sales. When the liquidation committee takes over the insolvent enterprise， the former legal representative of the insolvent enterprise shall conduct the handover to the liquidation committee.

55： Where the liquidation committee decides to cancel a contract and the other party to the contract suffers losses as a result of such cancellation that lead to disputes over compensation， the matter shall be settled through a ruling by a People's Court. The amount of compensation determined by the ruling shall be entered into insolvency claims.

56： After the liquidation committee takes over the insolvent enterprise， it shall organize the retained personnel of the enterprise and the liquidation committee personnel to conduct an account of the total property of the insolvent enterprise， list and register such property， and ascertain the total value of the actual assets of the enterprise.

57： The liquidation committee shall conduct a new appraisal of the assets available for distribution. New appraisal shall be conducted on the remaining value of fixed assets after depreciation. Defective or damaged property shall be re-valued. If re-valuation is not necessary， such property may be included at its original value.

58： When the liquidation committee distributes the property of the insolvent enterprise， the principle of cash distribution shall be used. Object distribution may also be used， or both methods may be used together. When claims of the insolvent enterprise are not compensated in the distribution， such claims may be distributed proportionately to the creditors of the insolvent enterprise. At the same time， debtors of the insolvent enterprise shall be notified.

59： When the liquidation committee disposes of the property of the insolvent enterprise， after reasonable appraisal such property may be distributed to creditors. It may also sell such property. Sale shall be conducted openly through such means as public auction. Where the circulation of assets available for distribution is restricted， such assets shall be purchased by a department designated by the state.

60： Where the insolvent enterprise is part of a legal person style or partnership style cooperative unit formed with other parties， assets invested by the insolvent enterprise as initial capital contribution and profit pertaining to such assets shall be recovered. What cannot be recovered may be assigned. The partner of the cooperation unit shall have a priority right of purchase under equal conditions. Where an insolvent enterprise is a partner of a partnership style cooperative unit， it shall be jointly and severally liable for the entire debts of the cooperative unit incurred before it withdrew from partnership. The creditors of the cooperative unit may participate in the insolvency process as creditors. Where the other party to the cooperative unit suffers losses due to recovery by the liquidation committee of the assets invested by the insolvent enterprise and profit pertaining to such assets， the matter shall be handled in accordance with Article 55 of this Opinion.

61： In accordance with Article 89 of the General Principles of Civil Law and Item 1 of Article 13 of Enterprise Insolvency Law， whenever a guarantor has paid debts on behalf of a debtor， before the debtor is declared insolvent， the guarantor has the right to apply to the People's Court to participate in the distribution with the amount of the repayment as an insolvency claim. Whenever the guarantor has not repaid the debt on behalf of the debtor before the debtor has been declared insolvent， the matter shall be handled as follows：

（1） the creditor may participate in the insolvency process as a creditor and participate in the distribution with the total repayment for the debts as an insolvency claim. The creditor may also pursue claims against the guarantor for the balance that is not repaid； or

（2） where the guarantor learns that a creditor will not participate in the insolvency process before the expiration date of the guarantor's claims， such guarantor may participate in the distribution with the amount of the debt that is guaranteed by him as an insolvency claim.

62： Where the issuer or the endorser of negotiable instruments （money orders， cashier's cheques and cheques） is declared insolvent， and the payer or accepter is not aware of this situation and pays or accepts such cheques， the debts incurred shall be insolvency claims， and the payers or acceptors shall be creditors.

63： Where the value of the security or other objects used as a guarantee by the insolvent enterprise are insufficient for the amount of debt secured， the balance shall be taken as insolvency claims.

64： For insolvency claims with interest， interest accumulation shall cease on the date of the declaration of insolvency.

65： Claims that have not matured at the time when the enterprise is declared insolvent shall be included in the assets available for distribution as matured claims， but interest that has not matured and other losses shall be deducted. Assets of the insolvent enterprise that are truly not recoverable， shall not be included in the assets available for distribution.

66： “Expenses” referred to in Paragraph 1 of Item 1 of Article 34 of the Enterprise Insolvency Law shall include the insolvent enterprise's salary and labour insurance expenses of the retained personnel and necessary expenses of the liquidation committee.

67： The liquidation committee shall formulate a detailed list of assets available for distribution and a balance sheet in accordance with the results of the liquidation， and issue an assets available for distribution plan.

68： After the assets available for distribution plan is discussed and passed by a creditors' meeting and approved by a People's Court， the liquidation committee shall promptly notify creditors to collect the property within a set time period. Property that is not collected within the given time period may be deposited.

69： When a creditor collects property， it shall provide proof of its address and its bank account number.

70： After distribution of the assets available for distribution， and the liquidation committee's application to a People's Court for termination of the insolvency process， the People's Court shall make a ruling regarding termination of the insolvency process within seven days.

71： After the termination of the insolvency process， the liquidation committee shall handle cancellation of the registration of the insolvent enterprise with original registration authority of the insolvent enterprise， and promptly report such matter to a People's Court.

72： After the registration of the insolvent enterprise has been cancelled， the People's Court shall declare the dissolution of the liquidation committee.

73： Property claims on the insolvent enterprise discovered after the termination of the insolvency process shall be handled by the superior department in charge of the insolvent enterprise. Property that has been recovered shall be distributed by a People's Court in accordance with Article 37 of the Enterprise Insolvency Law. If the property is of too little value and the People's Court considers that a new distribution is not necessary， such property may be turned over to the superior department in charge of the insolvent enterprise.

PART EIGHT

MISCELLANEOUS

74： Insolvency repayment procedures for non-state enterprise legal persons shall be handled in accordance with the provisions of the Civil Procedure Law.

75： Rulings of a People's Court on insolvency cases may not be appealed， with the exception of rulings to reject applications for insolvency. If a party involved objects to a ruling， it may apply for review to the People's Court that originally issued such ruling. However， the enforcement of the ruling shall not be suspended during the review period.

76： Where debtors and property holders of the insolvent enterprise object to the amount of debts to be repaid or the amount of property to be handed over， as instructed by a People's Court， and where such objection is rejected by the People's Court after investigation， they shall pay case handling charges in accordance with the standards stipulated in Item 4 of Article 5 of the People's Courts Litigation Fee Collection Procedures