With gradual maturity of China’s insolvency system, bankruptcy proceedings have shifted from something debtors feared and creditors resisted to a welcome tool for both parties to clear debt and rescue viable businesses.
This article examines key practical issues and recent court practice to assess how bankruptcy law is addressing practical current problems and future challenges.
Q: From “enforcement to bankruptcy” cases, to voluntary reorganisation: How do courts balance rescuing businesses with preventing debt evasion?
A: Early in a debt crisis, companies often fear entering bankruptcy proceedings, worried they will lose control of the business or end up in liquidation. Creditors, meanwhile, usually prefer individual…