Supreme People's Court, Opinion on Several Issues Concerning Proper Trial of Enterprise Bankruptcy Cases to Safeguard the Order of the Market Economy and Provide Judicial Protection

Issued: June 12 2009

Main contents: Dishonest enterprises that satisfy the criteria for a bankruptcy liquidation petition but may evade their debts by way of bankruptcy shall still be admitted to the statutory bankruptcy liquidation procedure. The people's court shall revoke and deny the enterprise's improper disposal of property, and pursue the liability of the investors and other relevant entities so that it is unable to evade its debts by way of bankruptcy and is stripped of its qualifications as a market entity. Where a creditor files a petition for the bankruptcy of a debtor, the emphasis of the trial shall be placed on finding whether the debtor is insolvent. The people's court may not refuse to handle the petition of the creditor on the grounds that the creditor is unable to provide details about the debtor's financial status (Article 2).

In case of enterprises that have already displayed signs of insolvency or obviously may become insolvent, but comply with state policy for adjustment of industry structure and still have development prospects, people's courts shall make full use of bankruptcy restructuring and bankruptcy settlement procedures to effectively assist them to turn around (Article 3).