The Role of the Administrator under the PRC Enterprise Bankruptcy Law

According to the World Bank (2006), resolving bankruptcies in China takes approximately 2.4 years with costs equal to 22 percent of the estate¡¯s value and a recovery rate of 31.5 cents on US$1. After more than twelve years of consideration and consultation, the PRC Enterprise Bankruptcy Law (中华人民共和国企业破产法)(New Law) was promulgated on August 27 2006 and became effective on June 1 2007. The Supreme People¡¯s Court has issued several provisions, one concerning the appointment of an administrator,¹ another determining the administrator¡¯s remuneration², and a third dealing with bankruptcy applications filed before the New Law took effect³ that complete the legal framework for the new Chinese enterprise bankruptcy system. These provisions also became effective on
June 1 2007.

An administrator plays the leading function in any bankruptcy proceeding under the New Law. The provisions issued by the Supreme People's Court in respect of the administrator specify who may serve as an administrator, how an administrator will be appointed, and how the administrator will be remunerated.

THE BANKRUPTCY ADMINISTRATOR