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China's First Personal Bankruptcy Ruling Comes into Effect

Tue, 24 Aug 2021
Categories: China Legal Trends

On 16 July 2021, Shenzhen Intermediate People's Court (hereinafter referred to as “Shenzhen Court”) made a ruling to approve Liang's reorganization plan, terminated his personal bankruptcy reorganization proceedings, and issued a written decision on lifting the restriction on consumption against Liang. This is the first personal bankruptcy case that has been ruled in China since the implementation of the “Regulation of Shenzhen Special Economic Zone on Personal Bankruptcy (the “Regulation”, 深圳经济特区个人破产条例) in March 2021. (See the Ruling “(2021) Yue 03 Po No. 230” (hereinafter referred to as the Ruling)).

The case was accepted by the Shenzhen Court on 11 May 2021. On 22 June, Shenzhen Court organized and convened the first creditors' meeting and voted to approve the list of exempted assets and the draft reorganization plan. Liang submitted the draft reorganization plan to the first creditors' meeting for approval. On 2 July, Liang applied to the Shenzhen Court for approval of the reorganization plan. The Shenzhen Court held that Liang’s reorganization plan draft complied with the Regulation and did not violate the mandatory provisions of laws and administrative regulations, and therefore approved Liang’s reorganization plan.

Pursuant to Article 124 of the Regulation, where the court rules to approve the reorganization plan, it shall simultaneously make a decision on lifting restrictions on the acts of the debtor, serve the decision in writing to the debtor and notify the authority in charge of bankruptcy affairs of its decision. Accordingly, the Shenzhen Court rendered the Ruling and simultaneously issued the decision on lifting restrictions on consumption against Liang.

 

 

Cover Photo by Siyuan (https://unsplash.com/@jsycra) on Unsplash

Contributors: CJO Staff Contributors Team

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