Bankruptcy Liquidation and Reorganization Legal Practice Department

The Bankruptcy Liquidation and Restructuring Legal Practice Department of Yunnan Zhongji Law Firm was established in 2020. In accordance with the provisions of the Enterprise Bankruptcy Law and as designated by the court, this department fully performs the duties of a bankruptcy administrator, providing comprehensive commercial information support and offering full-service legal assistance for corporate bankruptcy proceedings throughout the entire process of bankruptcy liquidation and restructuring.

I. Bankruptcy Liquidation and Reorganization Legal Practice Department

The Bankruptcy Liquidation and Restructuring Legal Practice Department of Yunnan Zhongji Law Firm was established in 2020. In accordance with the provisions of the Enterprise Bankruptcy Law and as designated by the court, this department fully performs the duties of a bankruptcy administrator, providing comprehensive commercial information support and conducting enterprise bankruptcy legal services throughout the entire process of bankruptcy liquidation and restructuring.

The Business Department is composed of bankruptcy law experts and senior, experienced lawyers who possess both extensive practical experience and a solid theoretical foundation. The department has a total of 18 members, including one chief executive officer, one chief expert in bankruptcy administration, and 16 senior lawyers. Leading the team is lawyer Guo Dingming, a Ph.D. in Law from Renmin University of China, a researcher at the Center for Bankruptcy Law Studies at Renmin University of China, and Vice President of the Bankruptcy Law Research Association of the Yunnan Provincial Lawyers Association. Also serving as core members are lawyer Wan Li, Vice President of the All-China Lawyers Association, President of the Yunnan Provincial Lawyers Association, and Director of our firm. This department is a professional team primarily made up of mid- and young-aged lawyers, with a well-balanced mix of senior, mid-career, and junior members, and boasts strong professional capabilities.

The Bankruptcy Liquidation and Restructuring Legal Practice Group has been involved in the entire process—covering bankruptcy liquidation, restructuring, and pre-restructuring—of several large-scale enterprises, including the restructuring cases of Yunnan Lujian Group Co., Ltd., Kunming Qianyifeng Real Estate Development Co., Ltd., Yunnan Renze Real Estate Development Co., Ltd., Yunnan Classic Real Estate Development Group Co., Ltd., Yunnan Murong Xincheng Real Estate Development Co., Ltd., Kunming Yinchuang Real Estate Development Co., Ltd., Kunming Jingzhidian Real Estate Development Co., Ltd., and Anning Jindi Chemical Co., Ltd. Among these cases, Attorney Guo Dingming, as an expert consultant to the bankruptcy administrator’s working team, directly participated in and provided guidance on the relevant work.

The Bankruptcy Liquidation and Reorganization Legal Services Department has also provided specialized legal services for a number of cases, including the “Bankruptcy and Restructuring of Kunming Electrochemical Plant,” the “Kunming Dianchi National Tourism Resort Management Committee,” the “Bankruptcy and Reorganization Assistance for the South Asia Gate Real Estate Project,” the “Special Liquidation Project under Southwest Transportation Construction Group Co., Ltd.,” the “Liquidation Project of the Guokan Cigarette Factory in Shan State, Myanmar—First Special Zone,” the “South Asia No. 1 City Urban Village Renovation and Development Project,” the “Dingyi Tiancheng Urban Village Renovation and Development Project,” the “Kunming Economic and Technological Development Zone’s Infrastructure Construction Project Utilizing Foreign Loans (including BT construction of highways, water supply and drainage systems, and river channel improvement),” the “Construction of Jinghong Municipal Administrative Center and New City Development in the Northern Area (involving BT, BOT, and EPC construction models),” the “Acquisition, Integration, and Restructuring of Tourist Assets by Bailian Group,” along with its “Tourism Industry Investment Strategy Development,” the “Logistics Socialization Reform of Yan’an Hospital in Kunming City,” and the liquidation of Yunnan Hualong Power Development Co., Ltd.—among dozens of other specialized bankruptcy liquidation projects.

Represented by attorney Guo Dingming, the Practice Department has, since its inception, placed great emphasis on both academic research and practical legal discussions in the field of bankruptcy. It has published the scholarly monograph “A Study on the Protection of Creditors’ Interests in Corporate Bankruptcy Liquidation Procedures—Focusing on the Improvement of the Enterprise Bankruptcy Law” with the Law Press; and has released the following works with the China Legal Publishing House: “A Detailed Analysis of Legal Practice in Construction Project Contracting,” “A Detailed Analysis of Financial Leasing Practice and Commentary on 100 Cases,” “A Detailed Analysis of Legal Practice in Private Lending Disputes and Commentary on 100 Cases,” and “Interpretation of Adjudication Rules in Tax Dispute Cases—A Comprehensive Guide to Approaches for Handling Difficult Cases and Key Practical Insights.” The department boasts profound theoretical expertise in law as well as extensive practical experience in bankruptcy and liquidation matters.

 

II. Scope of Legal Services for Bankruptcy Liquidation and Reorganization

(1) Providing legal due diligence services

Based on the characteristics of project bankruptcy disposal, identify the key areas for legal due diligence, including: the registration information and historical evolution of the project company; the debt status of the project company; the status of remaining assets available for sale by the project company; any restrictions on the project company’s production licenses, specialized technologies, land rights, and property rights; the market value and liquidation value of the project company’s assets; the project company’s tax arrears; and the project company’s involvement in litigation and enforcement proceedings.

Due diligence work is handled by professional due diligence attorneys. The duration of the due diligence process is flexibly adjusted based on the specific circumstances of the debtor, in conjunction with the opinions of relevant government departments and the court. Our firm’s attorneys, with the assistance of the client, will be stationed on-site to collect and organize the necessary materials.

(2) Prepare the due diligence report

The due diligence report primarily provides information on the project company’s basic details, asset and liability status, saleable assets, litigation and enforcement-related information, and asset valuation.

(3) Prepare a bankruptcy liquidation plan

After completing the legal due diligence, a liquidation plan will be prepared based on the results of the legal due diligence, tailored to the client’s specific circumstances. The plan will clearly outline targeted disposal methods and specify the implementation timeline.

(4) Submit the necessary bankruptcy application and relevant documents to the court.

1. Submit the “Bankruptcy Application” to the People’s Court;

2. Submit to the court the following necessary documents: “Employee Placement Plan,” “Audit Report,” “Detailed Statement of Asset Status,” “Details of Opened Accounts,” “List of Creditor Claims,” “List of Debts,” “Table of External Guarantees,” “Litigation Statistics Table,” and “Plan for Disposal of Bankruptcy Assets,” among others.

3. Prepare the “Bankruptcy Liquidation Report” and convene a creditors’ meeting for its review, among other tasks.

(5) Provide risk point warnings.

During the preparation of the due diligence report and the disposal plan, the business department will provide targeted risk alerts based on specific circumstances, covering—among others—civil legal risks, administrative legal risks, and criminal legal risks, to serve as a reference for bankruptcy proceedings.

(6) Communicate with creditors, debtors, the court, and the government.

To ensure the smooth progress of the work, the Business Department will actively communicate with the debtor company, major creditors, the court, and the government, striving to facilitate consensus among all stakeholders and build synergies.

(7) Provide legal advice

The Business Department will provide on-site and written responses to relevant legal questions raised by the debtor company, creditors, the court, and the government.

(8) Bankruptcy Administration Plan

To ensure the debtor maintains the orderly operation or continuation of the business during bankruptcy proceedings, while also leaving open the possibility of restructuring through the introduction of a prospective investor, and to preserve the debtor’s core operational value, the administrator has prepared a brief outline of the proposed plan—covering issues related to the management of the debtor’s assets and the introduction of investors during the implementation period—for reference purposes.

1. After becoming the administrator, the collection agency will adopt different recovery plans based on the classification of accounts receivable held by debtors. For customer entities with whom no ongoing business relationship exists and whose payment behavior is abnormal, the agency will immediately initiate collection procedures, employing a variety of methods—including written reminders, on-site collection visits, and litigation—to actively pursue the recovery of outstanding receivables.

2. Asset Disposal: After becoming the administrator, the administrator will formulate reasonable management and disposal plans based on the specific circumstances of each type of asset. For assets that are likely to depreciate significantly, incur high storage costs, and have relatively little impact on the company’s core business operations, the asset disposal process will be expedited following the first creditors’ meeting. In principle, the disposal method will follow the “Provisions of the Supreme People’s Court on Auction and Sale of Property in Civil Enforcement Proceedings by People’s Courts,” adopting a procedure that first involves appraisal followed by public auction. After obtaining the approval of the creditors’ committee through a vote, the administrator will proceed with the disposal and monetization of such assets according to the actual situation, thereby maximizing their value.

3. We will continue operating and attract prospective investors. We do not rule out the possibility of restructuring through the introduction of such investors. With the joint efforts of the management team, the administrator, and the creditors’ committee, and with the support and cooperation of the creditors, we will launch an open call for investors to bring in strong, capable investors and thereby achieve our goal of restructuring and revitalization.

During the debtor’s liquidation period, if it becomes necessary to implement the aforementioned property management plan in detail, the administrator shall prepare a specific plan and, where required, submit it to the creditors’ committee for review and approval by a vote of the committee before commencing implementation. If there are restructuring investors, their proposed plan will ultimately be submitted to the creditors’ meeting for a vote and then submitted to the court for approval before being finalized.

 

3. A complete quality control system is in place.

The Bankruptcy Liquidation and Reorganization Legal Practice Department of Yunnan Zhongji Law Firm provides clients with comprehensive, multi-level legal services across all areas, supported by a team that features a well-organized professional structure and close collaboration. In the course of providing legal services to clients, the department plans to adopt the following approaches to ensure high-quality work:

1. Acceptance of Instructions: The Business Department has assembled a service team composed of experienced lawyers specializing in the relevant field to provide services to clients. The team members include partner attorneys as well as several team attorneys. Once the cooperative relationship between the parties is formally established, the Business Department will designate Attorney Guo Dingming and Attorney Su Lianjie as the day-to-day contact representatives. Clients may directly send any work instructions to the representatives designated by the Business Department. When a project enters a critical phase, Yunnan Zhongji Law Firm will, based on the client’s needs, ensure that relevant questions are promptly addressed—through active coordination, such as arranging for project team members to work on-site.

2. Business Processing: After receiving the client’s work instructions, the Business Department will promptly assign the most suitable lawyer to handle the task based on the nature of the work. For routine legal consultations related to the project, the Business Department will respond within 24 hours of receiving the client’s instructions; for more complex legal consultations related to the project, the Business Department will endeavor to respond within 48 hours of receiving the client’s instructions.

3. Quality Control: The Business Department has a well-established and proven quality-control system for legal services, which includes, but is not limited to, creating electronic working documents for all written materials generated during legal services, enabling随时 access and verification of relevant information and data. Additionally, a lawyer’s work-log system has been implemented for all legal services, and all lawyers are required to diligently maintain these logs so that clients can gain a clear understanding of the nature and scope of the legal services provided. Furthermore, the firm has instituted regular internal team meetings as well as cross-disciplinary discussion mechanisms among different practice areas, ensuring timely communication, mutual verification, and support, thereby rigorously preventing the omission of critical matters and guaranteeing the high quality of services delivered to clients. Unlike many other law firms, the partners at Yunnan Zhongji Law Firm are deeply involved in the day-to-day handling of specific cases; nearly all legal documents—including legal due-diligence reports, legal opinions, bankruptcy plans, and liquidation schemes—issued externally are reviewed and revised by the lead partner in charge.

4. Internal Seminars: All lawyers at Yunnan Zhongji Law Firm who are involved in the project will hold regular meetings to discuss issues encountered during the service process, thereby providing better service to our clients.

5. Professional Response: Regarding issues related to the project, the Business Department not only analyzes the legal provisions but also conducts research on numerous similar projects, preparing specialized legal memoranda for clients and providing them with professional legal advice.

 

4. Strictly fulfill confidentiality obligations.

In the course of providing legal services for this project, the Bankruptcy Liquidation and Restructuring Legal Practice Department of Yunnan Zhongji Law Firm will strictly adhere to the following confidentiality obligations with respect to any confidential materials and information provided by the client concerning this project:

No confidential information will be used except for the purposes specified for the project;

Unless explicitly authorized in writing by the client, no confidential information shall be disclosed to any third party.

Limit access to confidential information to employees who are working on the project’s legal services, and ensure that these employees comply with their confidentiality obligations.

If the Business Unit determines that it needs to disclose confidential information to a government agency, or if the law requires it to do so, the Business Unit guarantees to immediately notify the client of such circumstances. The Business Unit will work closely with the client, while complying with applicable laws and regulations, to seek protective orders or other reliable safeguards in order to ensure that the disclosed confidential information receives appropriate confidentiality protection.