PRC Enterprise Bankruptcy Law

Article 2: When an enterprise legal person becomes insolvent and its assets are insufficient to discharge all of its debts or it clearly lacks the capacity to discharge such debts, its debts shall be liquidated in accordance with this Law.

If an enterprise legal person is characterized by the foregoing circumstance or there is a marked likelihood that it will lose the capacity to discharge its debts, it may undergo restructuring in accordance with this Law.

Article 3: Jurisdiction in a bankruptcy case shall lie with a people's court of the place where the debtor is domiciled.

Article 4: Where this Law is silent on the trial procedure for bankruptcy cases, the relevant provisions of the Civil Procedure Law shall apply.

Article 5: When a bankruptcy procedure is initiated in accordance with this Law, it shall apply to the property outside the territory of the People's Republic of China of the debtor.

If a legally effective judgement or ruling rendered by a foreign court in a bankruptcy case involves property in the territory of the People's Republic of China of the debtor and an application or petition is made to a people's court for recognition and enforcement, the people's court shall conduct an examination thereof in accordance with the international treaties concluded or acceded to by the People's Republic of China or in accordance with the principle of reciprocity, and, if it holds that such application or petition does not oppose the basic principles of the laws of the People's Republic of China, does not prejudice state sovereignty or security or the public interest, and does not harm the lawful rights and interests of creditors in the People's Republic of China, it shall rule to recognize and enforce such judgement or ruling.

Article 6: When trying a bankruptcy case, the people's court shall protect the lawful rights and interests of the enterprise's staff and workers in accordance with the law and pursue the legal liability of the bankrupt enterprise's operation and management personnel in accordance with the law.

PART TWO: PETITION AND ACCEPTANCE

Section One: Petition

Article 7: Where a debtor is characterized by the circumstance specified in Article 2 hereof, it may file a petition with the people's court for restructuring, a settlement or bankruptcy liquidation.

Where a debtor has become insolvent, a creditor may file a petition with the people's court for the restructuring or the bankruptcy liquidation of the debtor.

If an enterprise legal person has been dissolved but not yet liquidated, or if the liquidation is not yet completed, and its assets are insufficient to discharge its debts, the persons who, in accordance with the law, bear the obligation of carrying out the liquidation shall petition the people's court for bankruptcy liquidation.

Article 8: When filing a bankruptcy petition with the people's court, a written bankruptcy petition and relevant evidence shall be submitted.

The bankruptcy petition shall specify the following matters:

(1) the basic particulars of the petitioner and the respondent;

(2) the objective of the petition;

(3) the facts and grounds of the petition; and

(4) other matters that the people's court requires be specified.

If the petition is filed by the debtor, the debtor shall additionally submit to the people's court an explanation of the status of its property, an inventory of its debts, an inventory of its claims, relevant financial accounting reports, a contingency plan for the arrangements for its staff and workers and details of the payment of the wages of its staff and workers and the payment of social insurance premiums.

Article 9: The petitioner may petition to withdraw its bankruptcy petition before the acceptance of the same by the people's court.

Section Two: Acceptance

Article 10: If the bankruptcy petition is filed by a creditor, the people's court shall notify the debtor thereof within five days from the date of receipt of the petition. If the debtor objects to the petition, it shall make the same known to the people's court within seven days from the date of receipt of the notice from the people's court. The people's court shall rule on whether or not to accept the petition within 10 days from the date of the expiration of the objection period.

In circumstances other than that specified in the preceding paragraph, the people's court shall rule on whether or not to accept the petition within 15 days from the date of receipt of the bankruptcy petition.

Under special circumstances where an extension of the deadline for the ruling on acceptance specified in either of the preceding two paragraphs is required, the deadline may, subject to the approval of the people's court at the next higher level, be extended for 15 days.

Article 11: If the people's court accepts the bankruptcy petition, it shall serve its ruling on the petitioner within five days from the date of rendering the same.

If the petition was filed by a creditor, the people's court shall serve the ruling on the debtor within five days from the date of rendering the same. The debtor shall, within 15 days from the date of service of the ruling, submit to the people's court an explanation of the status of its property, an inventory of its debts, an inventory of its claims, relevant financial accounting reports, a contingency plan for the arrangements for its staff and workers and details of the payment of the wages of its staff and workers and the payment of social insurance premiums.

Article 12: If the people's court rules not to accept the bankruptcy petition, it shall serve its ruling together with an explanation of the reasons therefor on the petitioner within five days from the date of rendering the ruling. If the petitioner is dissatisfied with the ruling, it 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.

If, during the period between the acceptance of the bankruptcy petition and the declaration of bankruptcy, the people's court discovers through examination that the debtor is not characterized by the circumstance specified in Article 2 hereof, it may rule to reject the petition. If the petitioner is dissatisfied with the ruling, it 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.

Article 13: If the people's court rules to accept the bankruptcy petition, it shall additionally appoint an administrator.

Article 14: The people's court shall notify the known creditors within 25 days from the date of ruling to accept the bankruptcy petition and make an announcement.

The notice and announcement shall specify the following matters:

(1) the names of the petitioner and respondent;

(2) the date on which the people's court accepted the bankruptcy petition;

(3) the deadline and place for filing claims, and points to note;

(4) the name of the administrator and the address where it handles matters;

(5) the requirements in respect of the discharge of debts or delivery of property to the administrator by the debtors of the debtor and persons holding property of the debtor;

(6) the time and place of the first creditors' meeting; and

(7) other matters that the people's court deems ought to be notified and announced.

Article 15: The relevant persons of the debtor shall bear the following obligations during the period between the date of service on the debtor of the ruling of the people's court accepting the bankruptcy petition and the conclusion of the bankruptcy procedure:

(1) duly safekeeping the property, stamps, account books, documents and other such materials in their possession and under their management;

(2) carrying out their work as required by the people's court and the administrator and truthfully responding to queries;

(3) attending creditors' meetings in a non-voting capacity and truthfully responding to queries raised by the creditors;

(4) not leaving their places of domicile without the permission of the people's court; and

(5) not assuming positions as directors, supervisors or senior management personnel of other enterprises.

For the purposes of the preceding paragraph, the term "relevant persons" means the enterprise's legal representative and, as decided by the people's court, may include the enterprise's financial management personnel and other operation and management personnel.

Article 16: Once the people's court accepts the bankruptcy petition, the discharge of debts to individual creditors by the debtor shall be invalid.

Article 17: After the people's court accepts the bankruptcy petition, the debtors of the debtor and persons holding property of the debtor shall discharge their debts or deliver the property held by them to the administrator.

If a debtor of the debtor or a person holding property of the debtor intentionally violates the preceding paragraph by discharging its debt to the debtor or delivering the property held by it to the debtor, thereby causing the creditors to incur a loss, it shall not be released from its obligation to discharge the debt or deliver the property.

Article 18: After the people's court accepts the bankruptcy petition, the administrator shall have the right to decide to terminate or to continue the performance of contracts between the debtor and the counterparties thereto formed before the acceptance of the bankruptcy petition and the performance of which has yet to be completed, and shall notify the counterparties of its/his/her decision. If the administrator fails to notify the counterparties within two months from the date of acceptance of the bankruptcy petition or fails to reply within 30 days from receipt of a reminder from a counterparty, it/he/she shall be deemed to have terminated the contracts.

If the administrator decides to continue the performance of a contract, the counterparty shall perform such contract. However, the counterparty shall have the right to demand that the administrator provide security. If the administrator fails to provide security, it/he/she shall be deemed to have terminated the contract.

Article 19: Once the people's court accepts the bankruptcy petition, the preservation measures taken against the property of the debtor shall be lifted and enforcement procedures shall be stayed.

Article 20: Once the people's court accepts the bankruptcy petition, civil actions or arbitration procedures involving the debtor that have been instituted but not yet completed shall be stayed and shall be resumed after the administrator takes custody of the debtor's property.

Article 21: Once the people's court accepts the bankruptcy petition, civil actions against the debtor may only be instituted in the people's court that accepted the bankruptcy petition.

PART THREE: ADMINISTRATOR

Article 22: The administrator shall be appointed by the people's court.

If the creditors' meeting deems the administrator incapable of performing its/his/her duties in a lawful and impartial manner or deems that there are other circumstances that would prevent it/him/her from doing so competently, it may apply to the people's court to replace it/him/her.

The measures for the appointment of an administrator and determination of the administrator's remuneration shall be formulated by the Supreme People's Court.

Article 23: The administrator shall perform its/his/her duties in accordance with this Law, report on its/his/her work to the people's court and shall be subject to the supervision of the creditors' meeting and creditors' committee.

The administrator shall attend creditors' meetings in a non-voting capacity, report on the performance of its/his/her duties to the creditors and respond to their queries.

Article 24: The liquidation committee composed of personnel from relevant departments and agencies or an intermediary organization established in accordance with the law, such as a law firm, accounting firm, bankruptcy liquidation firm, etc. may serve as administrator.

The people's court may, depending on the actual circumstances of the debtor and after seeking the opinions of the relevant intermediary organization, appoint a member of such organization with the requisite professional knowledge and professional qualifications to serve as administrator.

A person may not serve as administrator if:

(1) he/she intentionally committed a crime and received a criminal sentence therefor;

(2) he/she has had his/her professional qualifications revoked;

(3) he/she has a material interest in the case; or

(4) he/she is characterized by other circumstances that the people's court deems make him/her unfit to serve as administrator.

If an individual serves as administrator, he/she shall take out practice liability insurance.

Article 25: The administrator shall perform the following duties and responsibilities:

(1) take custody of the debtor's property, stamps, account books, documents and other such materials;

(2) investigate the status of the debtor's property and prepare a report thereon;

(3) decide on the debtor's internal management affairs;

(4) decide on the debtor's day-to-day expenditures and other necessary expenditures;

(5) before the first creditors' meeting, decide on whether to continue or suspend the debtor's operations;

(6) manage and dispose of the debtor's property;

(7) represent the debtor in legal actions, arbitration procedures and other legal procedures;

(8) propose the holding of creditors' meetings; and

(9) other duties and responsibilities that the people's court requires the administrator to perform.

If this law provides otherwise, concerning the duties and responsibilities of the administrator, such provisions shall apply.

Article 26: If the administrator decides to continue or suspend the debtor's operations or carries out any of the acts specified in Article 69 hereof before the first creditors' meeting, it/he/she shall obtain the permission of the people's court therefor.

Article 27: The administrator shall act with due diligence and faithfully perform its/his/her duties.

Article 28: Subject to the permission of the people's court, the administrator may engage necessary working personnel.

The remuneration of the administrator shall be determined by the people's court. If the creditors' meeting objects to the remuneration of the administrator, it shall have the right to make the same known to the people's court.

Article 29: The administrator may not resign without just cause. The resignation of the administrator shall be subject to the permission of the people's court.

PART FOUR: PROPERTY OF THE DEBTOR

Article 30: All of the property belonging to the debtor at the time of the acceptance of the bankruptcy petition and the property obtained by it during the period between the acceptance of the bankruptcy petition and the conclusion of the bankruptcy procedure is property of the debtor.

Article 31: The administrator shall have the right to petition the people's court to revoke any of the following actions involving the property of the debtor taken during the year prior to the people's court's acceptance of the bankruptcy petition:

(1) transfers of property without consideration;

(2) transactions carried out at markedly unreasonable prices;

(3) the provision of property-backed security for debts not secured by property;

(4) early discharges of debts that have not fallen due; and

(5) renouncements of claims.

Article 32: If the debtor is characterized by the circumstance specified in the first paragraph of Article 2 hereof and was still discharging debts to individual creditors within the six months prior to the people's court's acceptance of the bankruptcy petition, the administrator shall have the right to petition the people's court to revoke the same, unless such individual discharges of debts were or are beneficial to the property of the debtor.

Article 33: The following acts involving the property of the debtor shall be invalid:

(1) the concealment or transfer of property to avoid debts; or

(2) the fabrication of debts or the acknowledgement of debts that are not genuine.

Article 34: The administrator shall have the right to recover property of the debtor obtained as a result of the acts specified in Article 31, 32 or 33 hereof.

Article 35: If the investors in the debtor have not fully performed their capital contribution obligations at the time the people's court accepts the bankruptcy petition, the administrator shall require such investors to pay in the capital contributions for which they have subscribed, irrespective of the deadlines for such capital contributions.

Article 36: The administrator shall recover irregular income that was obtained from the enterprise and enterprise property that was misappropriated by the directors, supervisors or senior management personnel of the debtor by using their authority.

Article 37: The administrator may, after the people's court accepts the bankruptcy petition, recover an item subject to a pledge or lien by discharging the debt or providing security acceptable to the creditor.

With respect to the debt discharge or substitute security specified in the preceding paragraph, if the value of the item subject to a pledge or lien is less than the amount of the secured claim, the same shall be limited to the then market value of the item subject to a pledge or lien.

Article 38: If, after the people's court accepts the bankruptcy petition, the debtor is in possession of property not belonging to it, the holder of the rights in such property may recover the same through the administrator, unless otherwise specified in this Law.

Article 39: If, at the time of the people's court's acceptance of the bankruptcy petition, a seller has shipped the subject matter of a transaction to the debtor, who was then acting as buyer, and the debtor has not received the same or paid in full the price therefor, the seller may recover the subject matter in transit. However, the administrator may pay the entire price thereof and require the seller to deliver the subject matter.

Article 40: If a creditor was in debt to the debtor prior to the acceptance of the bankruptcy petition, it may make a request to the administrator that the same be set off. However, the same may not be set off if:

(1) the debtor of the debtor obtained the claim against the debtor from a third party after the acceptance of the bankruptcy petition;

(2) the creditor incurred the debt to the debtor despite being aware that the debtor was insolvent or being aware of the fact of the bankruptcy petition, unless the creditor incurred such debt by law or due to a reason that arose one year prior to the bankruptcy petition; or

(3) the debtor of the debtor obtained the claim against the debtor despite being aware that the debtor was insolvent or being aware of the fact of the bankruptcy petition, unless the debtor of the debtor obtained such claim by law or due to a reason that arose one year prior to the bankruptcy petition.

PART FIVE: BANKRUPTCY EXPENSES AND DEBTS OF COMMON INTEREST

Article 41: The following expenses incurred after the people's court accepts the bankruptcy petition are bankruptcy expenses:

(1) court costs in the bankruptcy case;

(2) the expenses for managing, selling and distributing the property of the debtor; and

(3) the expenses incurred by the administrator in performing its/his/her duties, its/his/her remuneration and the expenses for engaging working personnel.

Article 42: The following debts incurred after the people's court accepts the bankruptcy petition are debts of common interest:

(1) the debts incurred in connection with the administrator or debtor requiring counterparties to perform contracts the performance of which has not been completed by the parties thereto;

(2) debts incurred in connection with the property of the debtor other than those relating to the management thereof;

(3) debts incurred in connection with improper gains obtained by the debtor;

(4) the labour remuneration and social insurance premiums payable by the debtor to continue operations and other debts arising as a result thereof;

(5) debts arising from injuries to persons caused by the performance by the administrator and relevant persons of their duties; and

(6) debts arising from injuries to persons caused by the property of the debtor.

Article 43: The bankruptcy expenses and debts of common interest shall be discharged from the property of the debtor as they arise.

Where the property of the debtor is insufficient to discharge all of the bankruptcy expenses and the debts of common interest, it shall first be applied to the discharge of the bankruptcy expenses.

Where the property of the debtor is insufficient to discharge all of the bankruptcy expenses or all of the debts of common interest, such expenses or debts shall be discharged pro rata.

If the property of the debtor is insufficient to discharge the bankruptcy expenses, the administrator shall petition the people's court to terminate the bankruptcy procedure. The people's court shall render a ruling to terminate the bankruptcy procedure within 15 days from the date of receipt of the petition and announce the same.

PART SIX: FILING OF CLAIMS

Article 44: Creditors who have claims against the debtor at the time the people's court accepts the bankruptcy petition shall exercise their rights in accordance with the procedure specified in this Law.

Article 45: Once it has accepted the bankruptcy petition, the people's court shall determine the deadline for creditors to file their claims. The period for filing claims shall count from the date of publication by the people's court of the announcement of its acceptance of the bankruptcy petition and shall at minimum last for 30 days and at maximum for three months.

Article 46: Unmatured claims shall be deemed to have fallen due at the time of acceptance of the bankruptcy petition.

Interest on interest-bearing claims shall cease to accrue thereon at the time of acceptance of the bankruptcy petition.

Article 47: Creditors may file conditional claims, claims subject to time limits and claims pending in legal actions and arbitration procedures.

Article 48: Creditors shall file their claims with the administrator during the period for filing claims determined by the people's court.

The wages, medical and disability subsidies and support owed to staff and workers and their families by the debtor, the basic old age insurance and basic medical insurance premiums payable into the individual accounts of the staff and workers and owed by the debtor and the compensation payable to the staff and workers in accordance with laws and administrative regulations need not be filed. Following its/his/her investigation, the administrator shall draw up a list thereof and announce the same. If a staff member or worker has an objection to the list, he/she may ask the administrator to correct the same. If the administrator does not make the correction, the staff member or worker may institute a legal action in the people's court.

Article 49: When filing its claim, a creditor shall state in writing the amount of such claim and whether or not there is property-backed security and submit relevant evidence. If the filed claim is a joint claim, the same shall be stated.

Article 50: The claim of joint claimants may be filed by one among them acting as representative for all of the joint claimants or may be jointly filed by them.

Article 51: If the guarantor of the debtor or another debtor bearing joint and several liability has discharged a debt on behalf of the debtor, it shall file its claim on the basis of its right to seek reimbursement from the debtor.

If the guarantor of the debtor or another debtor bearing joint and several liability has not discharged a debt on behalf of the debtor, it shall file its claim on the basis of its future right to seek reimbursement from the debtor, unless the creditor has already filed all of its claims with the administrator.

Article 52: If a ruling is rendered stating that multiple debtors bearing joint and several liability shall each be subject to the procedure specified in this Law, their creditors shall have the right to file all of their claims in each of the bankruptcy cases.

Article 53: If the administrator or the debtor terminates a contract pursuant to this Law, the counterparty shall file its claim on the basis of its right to claim damages incurred as a result of the termination of the contract.

Article 54: If the debtor is the entrusting party to an entrustment contract and a ruling is rendered stating that it shall be subject to the procedure specified in this Law, and the entrusted party is unaware of such fact and continues to discharge the entrusted matter, it shall file its claim on the basis of its right of claim arising therefrom.

Article 55: If the debtor is the issuer of a note and a ruling is rendered stating that it shall be subject to the procedure specified in this Law, and the payer of such note continues payment or acceptance, it shall file its claim on the basis of its right of claim arising therefrom.

Article 56: If a creditor fails to file its claim during the period for filing claims determined by the people's court, it may file a late claim before the final distribution of the bankruptcy estate, however, no supplementary distribution shall be made to it from any previous distributions. The expenses incurred for examining and confirming such late claim filing shall be borne by the party that filed its claim late.

If a creditor fails to file its claim in accordance with this Law, it may not exercise its rights in accordance with the procedure specified in this Law.

Article 57: After it/he/she receives the claim filing materials, the administrator shall record the same, combine the same, examine the claims that have been filed and prepare a list of the claims.

The list of claims and the claim filing materials shall be kept by the administrator and made available for review by materially interested parties.

Article 58: The list of claims prepared in accordance with Article 57 hereof shall be submitted to the first creditors' meeting for verification.

If the debtor and creditors have no objections to the claims recorded in the list of claims, the people's court shall rule to confirm the same.

If the debtor or a creditor has an objection to the claims recorded in the list of claims, it may institute a legal action in the people's court that accepted the bankruptcy petition.

PART SEVEN: CREDITORS' MEETING

Section One: General Provisions

Article 59: The creditors that filed their claims in accordance with the law comprise the members of the creditors' meeting, and shall have the right to attend and vote at creditors' meetings.

Creditors whose claims have not been determined may not exercise their voting rights except to the extent that the people's court exercises voting rights on their behalf and provisionally determines the amounts of their claims.

Creditors that enjoy security rights over specific property of the debtor shall not enjoy voting rights with respect to the matters specified in Items (7) and (10) of the first paragraph of Article 61 hereof unless they have waived their right to priority in obtaining payment.

Creditors may appoint proxies to attend creditors' meetings and exercise their voting rights on their behalf. When a proxy attends a creditors' meeting, he/she shall submit his/her power of attorney from the creditor to the people's court or the chairperson of the creditors' meeting.

Creditors' meetings shall be joined by representatives of the debtor's staff and workers and the labour union to express their opinions on relevant matters.

Article 60: The creditors' meeting shall have a chairperson who shall be designated by the people's court from among the creditors with voting rights.

The chairperson of the creditors' meeting shall preside over creditors' meetings.

Article 61: The creditors' meeting shall exercise the following functions and powers:

(1) verifying claims;

(2) applying to the people's court to replace the administrator, and examining the administrator's expenses and remuneration;

(3) supervising the administrator;

(4) electing and replacing members of the creditors' committee;

(5) deciding on whether to continue or suspend the debtor's operations;

(6) adopting restructuring plans;

(7) adopting settlement agreements;

(8) adopting plans to manage the property of the debtor;

(9) adopting plans to sell the property in bankruptcy;

(10) adopting plans to distribute the property in bankruptcy; and

(11) other functions and powers that the people's court deems ought to be exercised by the creditors' meeting.

Minutes shall be kept of the resolutions on the matters deliberated at creditors' meetings.

Article 62: The first creditors' meeting shall be convened by the people's court and held within 15 days from the date of expiration of the claim filing period.

Subsequent creditors' meeting shall be held when deemed necessary by the people's court or when proposed to the chairperson of the creditors' meeting by the administrator, the creditors' committee or creditors accounting for one-quarter or more of the total amount of the claims.

Article 63: When a creditors' meeting is to be held, the administrator shall notify the known creditors 15 days in advance.

Article 64: Resolutions of the creditors' meeting shall require a majority of the creditors with voting rights present at the meeting for adoption, furthermore, the amount of the claims represented by such creditors must account for one-half or more of the total amount of claims not secured by property, unless otherwise specified in this Law.

If a creditor is of the opinion that a resolution of the creditors' meeting violates the law and harms its interests, it may, within 15 days from the date on which the creditors' meeting adopted the resolution, petition the people's court to render a ruling revoking such resolution and order the creditors' meeting to adopt a new resolution in accordance with the law.

Resolutions of the creditors' meeting shall be binding on all of the creditors.

Article 65: If the matter specified in Item (8) or (9) of the first paragraph of Article 61 hereof is not adopted after a vote of the creditors' meeting, the people's court shall render a ruling thereon.

If the matter specified in Item (10) of the first paragraph of Article 61 is not adopted after two rounds of voting by the creditors' meeting, the people's court shall render a ruling thereon.

The people's court may announce the rulings specified in the preceding two paragraphs at a creditors' meeting or separately notify the creditors thereof.

Article 66: If a creditor is dissatisfied with a ruling rendered by the people's court pursuant to the first paragraph of Article 65 hereof, or if creditors whose claim amounts account for one-half or more of the total amount of claims not secured by property are dissatisfied with the ruling rendered by the people's court pursuant to the second paragraph of Article 65 hereof, it/they may apply, within 15 days of the date of the announcement of the ruling or receipt of the notice, to the people's court for review. Enforcement of the ruling shall not be stayed during the period of review.

Section Two: Creditors' Committee

Article 67: The creditors' meeting may decide to establish a creditors' committee. The creditors' committee shall be comprised of representatives of the creditors elected by the creditors' meeting and a representative of the debtor's staff and workers or the labour union. The creditors' committee may not exceed nine members in number.

The members of the creditors' committee shall be subject to the approval of the written decision of the people's court.

Article 68: The creditors' committee shall exercise the following functions and powers:

(1) supervising the management and disposal of the property of the debtor;

(2) supervising the distribution of the property in bankruptcy;

(3) proposing the convening of creditors' meetings; and

(4) other functions and powers delegated to it by the creditors' meeting.

When performing its duties, the creditors' committee shall have the right to require the administrator and the relevant persons of the debtor to provide explanations of matters falling within their purview or provide relevant documents.

If the administrator or the relevant persons of the debtor violate this law by refusing to accept supervision, the creditors' committee shall have the right to petition the people's court for a decision concerning supervisory matters. The people's court shall render its decision within five days.

Article 69: If the administrator carries out any of the following acts, it/he/she shall report the same to the creditors' committee in a timely manner:

(1) transferring rights and interests in immovable property such as land, premises, etc.;

(2) transferring property rights such as exploration rights, mining rights, intellectual property rights, etc.;

(3) transferring of all stock or operations;

(4) taking out loans;

(5) creating collateral;

(6) transferring claims or negotiable securities;

(7) performing a contract the performance of which has not been completed by the debtor and the counterparty;

(8) waiving a right;

(9) recovering a collateral; or

(10) carrying out another act of property disposal that has a material impact on the interests of the creditors.

If no creditors' committee is established and the administrator carries out any of the acts specified in the preceding paragraph, he/she shall report the same to the people's court in a timely manner.

PART EIGHT: RESTRUCTURING

Section One: Restructuring Petition and
Restructuring Period

Article 70: Either the debtor or a creditor may directly petition the people's court in accordance with this Law to restructure the debtor.

If a creditor has petitioned for the bankruptcy liquidation of the debtor, the debtor or an investor whose capital contribution accounts for 10% or more of the debtor's registered capital may, during the period between the people's court's acceptance of the bankruptcy petition and the declaration of the bankruptcy of the debtor, petition the people's court for restructuring.

Article 71: If, after examination, the people's court holds that the petition for restructuring complies with this Law, it shall render a ruling to restructure the debtor and announce the same.

Article 72: The period between the date on which the people's court renders the ruling to restructure the debtor and the termination of the restructuring procedure is the restructuring period.

Article 73: Upon an application by the debtor and subject to the approval of the people's court, the debtor may, during the restructuring period, manage its property and business matters itself under the supervision of the administrator.

If the circumstance specified in the preceding paragraph arises and if the administrator has, pursuant to this Law, already taken custody of the debtor's property and business matters, it/he/she shall hand over such property and business matters to the debtor and the functions and powers of the administrator as specified in this Law shall be exercised by the debtor.

Article 74: If the administrator is responsible for managing the property and business matters, it/he/she may appoint the operation and management personnel of the debtor to be in charge of the business matters.

Article 75: During the restructuring period, the exercise of the security rights enjoyed over specific property of the debtor shall be suspended. However, if there is a possibility that the collateral could be damaged or that its value could decrease markedly, such that the rights of the security holder would be harmed, such security holder may petition the people's court to permit it to resume the exercise of its security rights.

If the borrower or the administrator intends to take out a loan during the restructuring period to continue operations, security may be created for such loan.

Article 76: If the debtor lawfully has another party's property in its possession and the holder of the rights in such property seeks recovery of the same during the restructuring period, such recovery shall comply with the previously agreed upon conditions.

Article 77: During the restructuring period, the investors in the debtor may not request the distribution of returns on investment.

During the restructuring period, the debtor's directors, supervisors and senior management personnel may not transfer to a third party or parties the equity of the debtor held by them, unless consented to by the people's court.

Article 78: If, during the restructuring period, any of the circumstances set forth below arises, the people's court shall, upon a petition by the administrator or a materially interested party, rule to terminate the restructuring procedure and declare the debtor bankrupt:

(1) the debtor's business position and the status of its property continue to deteriorate and there is little prospect of a turnaround;

(2) the debtor engages in fraud, reduces its property in bad faith or commits other acts that are clearly adverse to the creditors; or

(3) the administrator is unable to perform his/her duties due to acts by the debtor.

Section Two: Formulation and Approval of the Restructuring Plan

Article 79: The debtor or the administrator shall submit a draft restructuring plan simultaneously to the people's court and the creditors' meeting within six months from the date on which the people's court rendered its ruling to restructure the debtor.

At the expiration of the period specified in the preceding paragraph, the people's court may, at the request of the debtor or the administrator, render a ruling extending such period by three months if there are legitimate grounds therefor.

If the debtor or the administrator fails to submit the draft restructuring plan by the deadline, the people's court shall rule to terminate the restructuring procedure and declare the debtor bankrupt.

Article 80: If the debtor manages its property and business matters itself, the draft restructuring plan shall be prepared by the debtor.

If the administrator is responsible for managing the property and business matters, the draft restructuring plan shall be prepared by the administrator.

Article 81: The draft restructuring plan shall contain the following:

(1) the debtor's business plan;

(2) the classification of claims;

(3) the claim adjustment plan;

(4) the plan for the payment of the claims;

(5) the period of implementation of the restructuring plan;

(6) the period of supervising the implementation of the restructuring plan; and

(7) other plans conducive to the restructuring of the debtor.

Article 82: When creditors holding the following classes of claims attend the creditors' meeting to discuss the draft restructuring plan, they shall cast their votes by class on the draft restructuring plan in accordance with the following claim classification:

(1) claims secured by specific property of the debtor;

(2) the wages, medical and disability subsidies and support owed to staff and workers and their families by the debtor, the basic old age insurance and basic medical insurance premiums payable into the individual accounts of the staff and workers and owed by the debtor and the compensation payable to the staff and workers in accordance with laws and administrative regulations;

(3) taxes owed by the debtor; and

(4) common claims.

When necessary, the people's court may decide to establish a small claims class in the common claims class to vote on the draft restructuring plan.

Article 83: The restructuring plan may not provide for the reduction or forgiveness of the social insurance premiums owed by the debtor other than those specified in Item (2) of the first paragraph of Article 82 hereof. The creditors of such expense do not vote on the draft restructuring plan.

Article 84: The people's court shall, within 30 days from the date of receipt of the draft restructuring plan, convene a creditors' meeting to vote on the draft restructuring plan.

A voting class shall be deemed to have approved the draft restructuring plan if a majority of the creditors in such class agree to the draft restructuring plan and the amount of the claims that they represent accounts for two-thirds or more of the total amount of the claims of such class.

The debtor or administrator shall give an explanation of the draft restructuring plan to the creditors' meeting and reply to queries.

Article 85: The representative of the investors in the debtor may attend the creditors' meeting discussing the draft restructuring plan in a non-voting capacity.

If the draft restructuring plan involves an item concerning an adjustment of the investors' rights and interests, an investor class shall be established to vote on such item.

Article 86: If each of the voting classes approves the draft restructuring plan, the restructuring plan shall be deemed to have been adopted.

Within 10 days from the date of adoption of the restructuring plan, the debtor or administrator shall submit an application to the people's court to approve the restructuring plan. If, after examination, the people's court holds the restructuring plan to be in compliance with this Law, it shall, within 30 days from the date of receipt of the application, rule to approve such plan, terminate the restructuring procedure and announce the same.

Article 87: If certain voting classes fail to approve the draft restructuring plan, the debtor or administrator may hold consultations with such voting classes. Such voting classes may hold another vote after such consultations. The results of the consultations may not harm the interests of other voting classes.

If a voting class that failed to approve the draft restructuring plan refuses to hold another vote or still fails to approve the draft restructuring plan in a new vote, but the draft restructuring plan satisfies the conditions set forth below, the debtor or the administrator may apply to the people's court to approve such plan:

(1) pursuant to the draft restructuring plan, the claims specified in Item (1) of the first paragraph of Article 82 hereof will be fully discharged from the specific property, the losses incurred as a result of the delayed discharge will be equitably compensated and the security rights over such property will not be materially harmed, or, alternatively, such voting class has approved the draft restructuring plan;

(2) pursuant to the draft restructuring plan, the claims specified in Items (2) and (3) of the first paragraph of Article 82 hereof will be fully discharged, or, alternatively, the relevant voting classes have approved the draft restructuring plan;

(3) pursuant to the draft restructuring plan, the ratio of the common claims that would be discharged would not be any less than the ratio that would have been discharged under the bankruptcy liquidation procedure at the time the draft restructuring plan was submitted for approval, or, alternatively, such voting class has approved the draft restructuring plan;

(4) the adjustment of the rights and interests of the investors under the draft restructuring plan is fair and impartial, or, alternatively, the investor class has approved the draft restructuring plan;

(5) the draft restructuring plan equitably treats the members of a voting class and the sequence of discharge of the claims is not against Article 113 hereof; and

(6) the debtor's business plan is feasible.

If, after examination, the people's court holds that the draft restructuring plan complies with the provisions of the preceding paragraph, it shall, within 30 days from the date of receipt of the application, rule to approve the same, terminate the restructuring procedure and announce the same.

Article 88: If the draft restructuring plan is not adopted and fails to obtain approval in accordance with Article 87 hereof, or if a restructuring plan that has been adopted fails to receive approval, the people's court shall rule to terminate the restructuring procedure and declare the debtor bankrupt.

Section Three: Implementation of the
Restructuring Plan

Article 89: The debtor shall be responsible for the implementation of the restructuring plan.

Once the people's court rules to approve the restructuring plan, the administrator that has taken custody of the property and business matters shall hand over the same to the debtor.

Article 90: The administrator shall supervise the implementation of the restructuring plan from the date on which the people's court ruled to approve the same and throughout the supervision period specified in the restructuring plan.

During the supervision period, the debtor shall report to the administrator on its implementation of the restructuring plan and its financial position.

Article 91: At the expiration of the supervision period, the administrator shall submit a supervision report to the people's court. The administrator's supervision duties shall terminate on the date it/he/she submits the supervision report.

The parties with a material interest in the restructuring plan shall have the right to review the supervision report submitted to the people's court by the administrator.

Upon application by the administrator, the people's court may rule to extend the period of supervision of the implementation of the restructuring plan.

Article 92: The restructuring plan that the people's court has ruled to approve shall be binding on the debtor and all of the creditors.

A creditor that failed to file its claim in accordance with this Law may not exercise its rights during the period of implementation of the restructuring plan. Once implementation of the restructuring plan is completed, such creditor may exercise its rights in accordance with the discharge conditions for the same class of claims specified in the restructuring plan.

The rights enjoyed by a creditor in respect of the guarantor of the debtor or other debtors bearing joint and several liability shall not be affected by the restructuring plan.

Article 93: If the debtor is unable or fails to implement the restructuring plan, the people's court shall, upon a petition from the administrator or a materially interested party, rule to terminate the implementation of the restructuring plan and declare the debtor bankrupt.

If the people's court rules to terminate the implementation of the restructuring plan, the commitments made by a creditor in the restructuring plan with respect to the adjustment of its claim shall cease to be valid. The discharge of the creditor's claim effected as a result of the implementation of the restructuring plan shall remain valid, and the portion of its claim that was not discharged shall be deemed a claim in bankruptcy.

The creditor mentioned in the preceding paragraph shall only be eligible for further distributions when the percentage of the discharged claims of the other creditors in the same class reaches that of such creditor.

Where the circumstance specified in the first paragraph of this Article arises, the security provided for the implementation of the restructuring plan shall continue to be valid.

Article 94: Once implementation of the restructuring plan is completed, the debtor shall no longer be liable for the discharge of debts that were reduced or forgiven pursuant to the restructuring plan.

PART NINE: SETTLEMENT

Article 95: The debtor may, in accordance with this Law, directly petition the people's court for a settlement. Alternatively, it may petition the people's court for a settlement during the period between the people's court's acceptance of the bankruptcy petition and the declaration of the bankruptcy of the debtor.

When petitioning for a settlement, the debtor shall submit a draft settlement agreement.

Article 96: If, after examination, the people's court holds that the settlement petition complies with this Law, it shall render a ruling for the settlement and announce the same. Furthermore, it shall convene a creditors' meeting to discuss the draft settlement agreement.

Rights holders with security rights over specific property of the debtor may exercise their rights from the date on which the people's court renders the ruling for the settlement.

Article 97: A resolution of the creditors' meeting on the settlement agreement shall require the consent of a majority of the creditors with voting rights present at the meeting for adoption, furthermore, the claims represented by such creditors must account for two-thirds or more of the total amount of the claims not secured by property.

Article 98: If the creditors' meeting adopts the settlement agreement, the same shall be subject to the approval of the people's court, and the people's court shall terminate the settlement procedure and announce the same upon approval. The administrator shall hand over the property and business matters to the debtor and submit a report on the performance of its/his/her duties to the people's court.

Article 99: If the creditors' meeting votes not to adopt the draft settlement agreement or if a settlement agreement adopted by the creditors' meeting fails to obtain the approval of the people's court, the people's court shall rule to terminate the settlement procedure and declare the debtor bankrupt.

Article 100:A settlement agreement that the people's court has ruled to approve shall be binding on the debtor and all the creditors covered by the settlement.

The term "creditor covered by the settlement" means a party that, at the time the people's court accepted the bankruptcy petition, held a claim not secured by property against the debtor.

If a creditor covered by the settlement failed to file its claim in accordance with this Law, it may not exercise its rights during the term of performance of the settlement agreement. Once performance of the settlement agreement is completed, it may exercise its rights in accordance with the claim discharge conditions specified in the settlement agreement.

Article 101:The rights enjoyed by a creditor covered by the settlement in respect of the guarantor of the debtor or other debtors bearing joint and several liability shall not be affected by the settlement agreement.

Article 102:The debtor shall discharge its debts on the terms specified in the settlement agreement.

Article 103:The people's court shall rule a settlement agreement concluded as a result of fraud or other illegal act on the part of the debtor null and void and declare the debtor bankrupt.

If the circumstance specified in the preceding paragraph arises, the payment of its claim that a creditor covered by the settlement received as a consequence of its performance of the settlement agreement will, to the extent that the same falls within the ratio of the discharge of the claims of the other creditors, not be returned.

Article 104:If the debtor is unable or fails to perform the settlement agreement, the people's court shall, upon a petition from a creditor covered by the settlement, rule to terminate performance of the settlement agreement and declare the debtor bankrupt.

If the people's court rules to terminate the performance of the settlement agreement, the commitments made by a creditor covered by the settlement in the settlement agreement with respect to the adjustment of its claim shall cease to be valid. The discharge of the creditor's claim effected as a result of the performance of the settlement agreement shall remain valid, and the portion of its claim that was not discharged shall be deemed a claim in bankruptcy.

The creditor mentioned in the preceding paragraph shall only be eligible for further distributions when the ratio of the discharged claims of the other creditors reaches that of such creditor.

If the circumstance specified in the first paragraph of this Article arises, the security provided for the performance of the settlement agreement shall continue to be valid.

Article 105:If the debtor and all of its creditors reach an agreement on the disposal of the claims and debts after the people's court accepts the bankruptcy petition, they may petition the people's court to render a ruling approving such agreement and terminate the bankruptcy procedure.

Article 106:Once performance of the settlement agreement is completed, the debtor shall no longer be liable for the discharge of debts that were reduced or forgiven pursuant to the settlement agreement.

PART TEN: BANKRUPTCY LIQUIDATION

Section One: Declaration of Bankruptcy

Article 107:If the people's court declares the debtor bankrupt pursuant to this Law, it shall serve the ruling on the debtor and administrator within five days from the date on which it rendered such ruling, and, within 10 days from the date of rendering such ruling, it shall notify the known creditors and make an announcement.

After the debtor has been declared bankrupt, it shall be known as a bankrupt, its property shall be known as property in bankruptcy and the claims enjoyed against the debtor at the time the people's court accepted the bankruptcy petition shall be known as claims in bankruptcy.

Article 108:If, prior to the declaration of bankruptcy, either of the circumstances set forth below arises, the people's court shall terminate the bankruptcy procedure and announce the same:

(1) a third party provides sufficient security for the debtor or discharges all due debts for the debtor; or

(2) the debtor has discharged all of its due debts.

Article 109:Rights holders that have security rights over specific property of the bankrupt shall enjoy a preemptive right to obtain payment from such property.

Article 110:If a creditor enjoying the right specified in Article 109 hereof fails to obtain full payment after exercising its preemptive right to obtain payment, the outstanding portion of such claim shall be deemed a common claim. If it waives its preemptive right to obtain payment, its claim shall be deemed a common claim.

Section Two: Sale and Distribution

Article 111:The administrator shall, in a timely manner, draft a plan for selling the property in bankruptcy and submit the same to the creditors' meeting for discussion.

The administrator shall, in a timely manner, sell the property in bankruptcy in accordance with the plan for selling the property in bankruptcy adopted by the creditors' meeting or that ruled on by the people's court in accordance with the first paragraph of Article 65 hereof.

Article 112:The sale of the property in bankruptcy shall be accomplished by way of an auction, unless otherwise resolved by the creditors' meeting.

A bankrupt enterprise may be wholly or partially sold off. When an enterprise is to be sold off, its intangible assets and other property may be sold separately.

Property that, in accordance with state provisions, cannot be auctioned or the transfer of which is restricted, shall be disposed of by the method specified by the state.

Article 113:The property in bankruptcy shall be applied to the discharge of claims in the following sequence after the discharge, on a priority basis, of the bankruptcy expenses and debts of common interest:

(1) the wages, medical and disability subsidies and support owed to staff and workers and their families by the bankrupt, the basic old age insurance and basic medical insurance premiums payable into the individual accounts of the staff and workers and owed by the bankrupt and the compensation payable to the staff and workers in accordance with laws and administrative regulations;

(2) the social insurance premiums other than those mentioned in the preceding item owed by the bankrupt and taxes owed by the bankrupt; and

(3) common claims in bankruptcy.

If the property in bankruptcy is insufficient to satisfy the discharge requirements of a certain tier, the distribution to such tier shall be effected pro rata.

The wages of the directors, supervisors and senior management personnel of a bankrupt enterprise shall be calculated at the average wage of the enterprise's staff and workers.

Article 114:The distribution of the property in bankruptcy shall be effected in cash, unless otherwise resolved by the creditors' meeting.

Article 115:The administrator shall, in a timely manner, draft a plan for the distribution of the property in bankruptcy and submit the same to the creditors' meeting for discussion.

The plan for the distribution of the property in bankruptcy shall specify the following matters:

(1) the names and domiciles of the creditors that are to participate in the distribution of the property in bankruptcy;

(2) the amount of the claims covered by the distribution of the property in bankruptcy;

(3) the amount of the property in bankruptcy available for distribution;

(4) the sequence of the distribution of the property in bankruptcy, the percentages and the amounts; and

(5) the method of effecting the distribution of the property in bankruptcy.

Once the plan for the distribution of the property in bankruptcy is adopted by the creditors' meeting, the administrator shall submit the same to the people's court for a ruling approving it.

Article 116:Once the people's court has ruled to approve the plan for the distribution of the property in bankruptcy, it shall be implemented by the administrator.

If, in accordance with the plan for the distribution of the property in bankruptcy, the administrator is to effect multiple distributions, it shall announce the amount of property and the amount of the claims to be covered by the contemplated distribution. When the administrator is to effect the final distribution, it/he/she shall so state in the announcement and stipulate the matters specified in the second paragraph of Article 117 hereof.

Article 117:The administrator shall allocate a distribution amount for claims that are subject to effectiveness conditions or termination conditions.

If the administrator has allocated a distribution amount in accordance with the preceding paragraph and if the effectiveness conditions are not satisfied or the termination conditions are satisfied on the date of the announcement of the final distribution, it/he/she shall distribute such amount to the other creditors. If the effectiveness conditions are satisfied or the termination conditions are not satisfied on the date of the announcement of the final distribution, such amount shall be paid to the relevant creditors.

Article 118:The administrator shall set aside any distribution amount from the property in bankruptcy that has not been collected by creditors. If the creditors still fail to collect such amount within two months from the date of announcement of the final distribution, they shall be deemed to have waived their right to collect such distribution and the administrator or the people's court shall distribute such amount to the other creditors.

Article 119:When distributing the property in bankruptcy, the administrator shall allocate a distribution amount for claims pending in legal actions or arbitration procedures. If such amount still cannot be collected two years from the conclusion of the bankruptcy procedure, the people's court shall distribute such amount to the other creditors.

Section Three: Conclusion of the Bankruptcy Procedure

Article 120:If the bankrupt has no property available for distribution, the administrator shall petition the people's court to render a ruling concluding the bankruptcy procedure.

Once the final distribution has been completed, the administrator shall, in a timely manner, submit to the people's court a report on the distribution of the property in bankruptcy and petition the people's court to render a ruling concluding the bankruptcy procedure.

The people's court shall render its ruling on whether or not to conclude the bankruptcy procedure within 15 days from the date of receipt of the petition from the administrator to conclude the bankruptcy procedure. If it rules to conclude the bankruptcy procedure, it shall announce the same.

Article 121:The administrator shall, within 10 days from the date of conclusion of the bankruptcy procedure, carry out deregistration procedures with the original registration authority of the bankrupt on the strength of the ruling from the people's court concluding the bankruptcy procedure.

Article 122:The administrator shall cease to perform its/his/her duties on the day following completion of the deregistration procedures, unless pending legal actions or arbitration procedures remain.

Article 123:A creditor may petition the people's court to effect an additional distribution in accordance with the plan for the distribution of property in bankruptcy if, within two years from the date of conclusion of the bankruptcy procedure in accordance with the fourth paragraph of Article 43 or Article 120 hereof:

(1) it is discovered that there is property recoverable pursuant to Article 31, 32, 33 or 36 hereof; or

(2) it is discovered that the bankrupt has other distributable property.

If a circumstance specified in the preceding paragraph arises, but the quantity of property is insufficient to cover the distribution expenses, the additional distribution shall not be effected and such property shall be remitted into the state treasury by the people's court.

Article 124:The guarantors of the bankrupt and other debtors bearing joint and several liability shall continue, in accordance with the law, after the conclusion of the bankruptcy procedure, to be liable for the claims of creditors that were not discharged in accordance with the bankruptcy liquidation procedure.

PART ELEVEN: LEGAL LIABILITY

Article 125:If a director, supervisor or member of the senior management personnel of an enterprise commits a breach of his/her obligation of loyalty or obligation of due diligence, thereby causing the enterprise that he/she serves to go bankrupt, he/she shall be civilly liable in accordance with the law.

A person characterized by the circumstance specified in the preceding paragraph may not serve as a director, supervisor or member of the senior management personnel of any enterprise for three years from the date of conclusion of the bankruptcy procedure.

Article 126:If a relevant person of the debtor with an obligation to attend a creditors' meeting in a non-voting capacity, fails to attend such meeting without just cause following a summons from the people's court, the people's court may issue a bench warrant against him/her and fine him/her in accordance with the law. If a relevant person of the debtor violates this Law by refusing to make statements or respond to questions or by making false statements or responses, the people's court may fine him/her in accordance with the law.

Article 127:If the debtor violates this Law by refusing to submit to the people's court an explanation of the status of its property, an inventory of its debts, an inventory of its claims, relevant financial accounting reports, details of the payment of the wages of its staff and workers and the payment of social insurance premiums or submitting to the people's court a fraudulent explanation of the status of its property, inventory of its debts, inventory of its claims, relevant financial accounting reports, details of the payment of the wages of its staff and workers and the payment of social insurance premiums, the people's court may fine the directly responsible persons in accordance with the law.

If the debtor violates this Law by refusing to hand over to the administrator its property, stamps, account books, documents and other such materials, or by fabricating or destroying relevant supporting documentation for the property, thus leaving the status of the property unclear, the people's court may fine the directly responsible persons in accordance with the law.

Article 128:If the debtor commits any of the acts specified in Article 31, 32 or 33 hereof, thereby harming the interests of the creditors, the legal representative and other directly responsible persons of the debtor shall be liable for damages in accordance with the law.

Article 129:If a relevant person of the debtor violates this Law by leaving his/her place of domicile without authorization, the people's court may give him/her a reprimand or detain him/her and may fine him/her in accordance with the law.

Article 130:If the administrator fails to act with due diligence and faithfully perform his/her duties in accordance with this Law, the people's court may fine him/her in accordance with the law. If the creditors, the debtor or a third party incurs a loss as a result thereof, it/he/she shall be liable for damages in accordance with the law.

Article 131:If a violation of this Law is committed and such violation constitutes a criminal offence, criminal liability shall be pursued in accordance with the law.

PART TWELVE: SUPPLEMENTARY PROVISIONS

Article 132:After the implementation of this Law, where, after the discharge in accordance with Article 113 hereof of the wages, medical and disability subsidies and support owed to staff and workers and their families by the bankrupt, the basic old age insurance and basic medical insurance premiums payable into the individual accounts of the staff and workers and owed by the bankrupt and the compensation payable to the staff and workers in accordance with laws and administrative regulations before the date of promulgation of this Law, a portion thereof remains undischarged, payment of such portion shall be made from the specific property specified in Article 109 hereof on a priority basis ahead of the rights holders that enjoy security rights over such specific property.

Article 133:Prior to the implementation of this Law, specific matters relating to the bankruptcy of state-owned enterprises within the time period and scope specified by the State Council shall be handled in accordance with the relevant provisions of State Council.

Article 134:If a commercial bank, securities company, insurance company or other such financial institution is characterized by the circumstance specified in Article 2 hereof, the State Council's financial regulatory authority may submit a petition to the people's court to restructure such financial institution or have it declared bankrupt and liquidated. If the State Council's financial regulatory authority lawfully takes such measures as taking over management of or commissioning the management to a third party of a financial institution whose operations are facing a material risk, it may petition the people's court to stay any civil action or enforcement procedure in which the financial institution is the defendant or is the person against whom a judgement is being executed.

If a financial institution goes into bankruptcy, the State Council may formulate implementing measures in accordance with this Law and other relevant laws.

Article 135:If the liquidation specified in other laws of organizations other than enterprise legal persons falls within the category of bankruptcy liquidation, the procedure specified in this Law shall apply mutatis mutandis.

Article 136:This Law shall be effective as of June 1 2007. The PRC State Enterprise Bankruptcy Law (Trial Implementation) shall be repealed simultaneously.