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6 Chapter Withdraw
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bankruptcy
The corporate bankruptcy law (hereinafter referred to as the bankruptcy law) came into force on 1st June 2007, and the traditional corporate bankruptcy law (trial) was abolished. Bankruptcy law is applied when organizations can not repay their due obligations and if they do not meet the obligations of all of the assets or obviously lack the ability to repay the obligation.In order to file a bankruptcy it is necessary to fulfill one of the following requirements (Article 2 of the same law).
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Bankruptcy proceeding
The bankruptcy proceedings are carried out as follows.
■ Bankruptcy petition ... ❶Bankruptcy claims can be made by creditors, obligors, and persons responsible for liquidation (bankruptcy law Article 7). The items to be filed for bankruptcy application are as follows.
· A petitioner, a respondent· Purpose of application· Fact and reason for the complaint· Other documents that the People's Court deems necessary
In the case where the obligor is claiming bankruptcy, in addition to the bankruptcy filing letter, the explanation on the property situation, the debt list, the receivable list, the related financial statement, the employee arrangement plan and payment of employee salary, the document on the payment status of social insurance premium It is necessary to submit.
■ Bankruptcy announcement · notification ... ❷When bankruptcy motion is accepted, within five days from the date of acceptance decision, notify the petitioner and appoint a trustee. The People's Court notifies and publicly notifies known creditors within 25 days from the date of acceptance decision.In the case of non-acceptance, within five days, notify the complainant to that effect and explain why it was not accepted.The debtor will file an opposition to the People's Court within seven days if the petition is meaningful and the People's Court will decide whether to accept it within ten days from the expiration date of the opposition proceeding period.If the obligor has no objection to the complaint or the obligor makes a claim for his own bankruptcy, the People's Court must decide whether to accept it within 15 days from the date of accepting the bankruptcy motion. If there is a special reason and it is necessary to extend the decision acceptance period, it can be extended to 15th by approval of the People's Court of the first grade (bankruptcy law Article 10).
■ Nominating a trustee by the People's Court ... ❸The trustee is nominated by the People's Court, but if the creditors meeting is dissatisfied with the creditors, you can ask the People's Court for the dismissal.A trustee can organize a clearing team according to personnel in the affiliated department (agency) and can be in charge of mediation by law firms, accountant offices, clearing offices, etc. The responsibilities of the trustee are responsible for the storage, arrangement, evaluation, disposal, and distribution of bankruptcy property, and necessary civic activities.
■ Report of claims by creditors ... ❹After the People's Court accepts the bankruptcy motion, we decide the creditor reporting agency of the creditor. The People's Court will decide the deadline of creditor notification of creditors in the range of 30 days to 3 months from the date of public notice.The obligee will submit the claim to the People's Court, in writing, within the due date of the claim report, explain the amount of the claim and the presence of collateral, and submit the related proof material. If there is no notification even after the deadline has expired, you can notify the additional claim until the final distribution of the bankruptcy property. However, we can not adjust the receivables already distributed.
■ Holding creditors meeting ... ❺The First Creditor Conference shall be convened by the People's Court and held within 15 days after the lapse of the period for notifying the claim. The first and subsequent meetings were held when the People's Court deemed it necessary, or when proposing holding of creditors meeting by creditors, obligee committee, creditors accounting for more than a quarter of total claims I will. Creditors' meeting will examine and resolve debt review, selection of trustee, processing and distribution method of supervising property, distribution plan or rehabilitation plan, settlement proposal etc etc. Resolutions of the creditors meeting are equally binding to all creditors.The creditor conference can establish a creditors' committee consisting of creditors representative and one obligor employee representative (or worker association representative) to supervise the obligor's property management, disposal, and distribution of bankruptcy property I will.
■ Bankruptcy Declaration ... ❻When the People's Court awards the bankruptcy declaration of the obligor under bankruptcy law, within five days from the date of ruling of bankruptcy declaration, an arbitrator is sent to the obligor and the trustee, and within 10 days to the known creditors Notice and public notice. After declaring bankruptcy of the obligor, the obligor is a bankruptor, the property of the obligor is bankrupt property, and the obligation to the obligor at the time of filing the bankruptcy claim is called bankruptcy claim.
■ Confirmation of debt and finalization of payment order ... ❼The property assignment submitted by the trustee is executed by the administrator after being debated and adopted by the creditors meeting and after ruling by the People's Court. The order of payment is as follows.
① secured debt② Bankruptcy expenses and public debt③ Labor Obligation④ taxes⑤ Other general bankruptcy obligations
■ Property distribution ... ❽The property assignment submitted by the trustee is executed by the administrator after being debated and adopted by the creditors meeting and after ruling by the People's Court.
■ Conclusion of bankruptcy proceedings ...In the event that the distribution of bankrupt property has been completed, the administrator shall submit a distribution report on bankruptcy property to the People's Court and file a petition for termination of bankruptcy proceedings. The People's Court awards whether or not the bankruptcy proceedings will be closed within 15 days from the date of receipt by the trustee of the petition for termination of bankruptcy proceedings. Within ten days after the conclusion of bankruptcy proceedings, the trustee will delete the registration at the original banking organization of the bankrupt. -
Comparison of each withdrawal method and points to keep in mind
For each method of withdrawal, its requirements and effects are compared, as shown in the following table (excluding business transfer because there is no legal provision).
When choosing a withdrawal scheme, it is necessary to select the most appropriate one taking comprehensive consideration of the company's governance situation and the cost to complete withdrawal.
Labor problems and conflicts between labor and management are examples of problems commonly occurring in each method when withdrawing. In order to achieve smooth withdrawal it is necessary to know how to solve.
■ Labor problemsIn withdrawal and business restructuring, it is necessary to reduce workers and make various adjustments. In China, we are taking measures to maintain workers' employment and secure employment opportunities, so there is the possibility of conflict of interests with workers themselves. When withdrawing, we must carefully deal with workers.
The system for reduction and organization of workers in China is as follows.
[Termination of labor contract]For fixed-term employment contractors, the contract will be terminated unless it is renewed at the end of the term (Article 14 of the Labor Contract Act). In this case, we need to notify the workers in writing that they will not be updated and obtain confirmation of acceptance. At this time, economic compensation must be paid according to the employee's years of service (Article 46 of the same law).With regard to indefinite employment contractors, labor under the agreement between the employer and the employeeYou can cancel the contract (Article 36 of the same law). Withdrawal usually requires payment of economic compensation as well as non-renewal of fixed term employment contract in order to offer cancellation from employer side.At the time of withdrawal, a preliminary announcement of thirty days ago as a case where "a serious change occurred in the objective situation of the enterprise assumed at the time of conclusion of labor contract, and the contract could not be executed" as stipulated in Article 40 of the Labor Contract Act You can cancel the labor contract by paying monthly wages. Even in this case, payment of economic compensation is required.
[Comprehensive personnel reduction]DismissalIf there is a significant change in the company's bankruptcy or the objective situation of the enterprise that was supposed at the time of entering into a labor contract, and the contract can not be executed, the employee or employee 30 days before the employee is dismissed I will listen to all the explanations and opinions, and report to the labor administration administration department in the jurisdiction. This will allow more than 20 employees or more than 10% of the employees to be dismissed (Article 41 (1) of the Labor Contract Act). Even in this case payment of economic compensation is necessary.
Dismissal · Dismissal due to liquidationWhen a company dissolves / liquidates, the labor contract between the company and the employee will also be terminated (Article 44 (1) (5) of the Labor Contract Act). In principle, notification is made to the approval institution and dissolution is realized when it is accepted, but in some cases it may be necessary to coordinate with the labor administration administration department of the jurisdiction concerning the handling of employees. In case of dismissal and dismissal due to liquidation, payment of economic compensation is required.
Other placement changeIn accordance with the withdrawal of a company, if it becomes necessary to change labor contracts due to change of worker's placement or transfer to another company in the group, you will be dismissed with an agreement with the employee. Since there are costs and risks such as stopping employment and dismissing, there are costs and risks such as economic compensation payment and developing labor dispute, so we need to consider the interest adjustment with employees in advance using such a method.
Temporary workers' termination of contractIn dispatching workers, workers are dispatched based on labor dispatch contracts between dispatched agencies (temporary staffing companies) and companies to be dispatched. When we withdraw the contract, we will process based on the contents of labor contract. There is no legal obligation for the dispatched company to pay economic compensation, but there is a possibility that troubles may arise due to the fact that workers do not understand that fact.It is necessary to confirm and consider beforehand about countermeasures to dispatch companies in preparation for trouble occurrence.
Dispute resolutionConflicts may arise with related parties in the arrangement of debts and obligations following the withdrawal of foreign companies and distribution of residual assets. Below, I will describe each system of lawsuit and arbitration concerning China's civil and commercial dispute.
[Civil litigation system]In China, we adopt the second trial system, and if one party disagrees with the hearing of the People's Court (court) under the jurisdiction, it will be the final judgment with the judgment of that advanced People's Court. Court of competent jurisdiction may be determined by agreement between the parties only in the first instance but unless the agreement is invalid unless certain conditions such as the place of address of the defendant and plaintiff, the place of execution of the contract, the place of signing the contract etc. are not met . If you do not declare the People's Court of the competent jurisdiction, the People's Court of the jurisdiction will judge in consideration of the seriousness of the case and the regional nature.Although it is also possible to request a retrial with an appeal of the second instance judgment, cases that are admitted are rare. Under such circumstances, there are cases in which the parties to the counterparty raise a trial with a malicious intent to a company that is liquidating, prolonging the completion of the liquidating procedure, such as appealing appeals and requests for retrial. It is important to resolve conflicts as quickly as possible and at low cost through mediation and arbitration system.
[Arbitration system]Regarding matters brought into civil litigation, mediation is called agreement between parties and settlement of disputes under the administration of the People's Court before the judgment comes down. This system does not have spiritual damage due to winning or losing, it also reduces cost and time. It is a case that is often seen in China to conclude litigation.
[Arbitration system]It is the arbitration that the parties concerned settle the dispute to the arbitration committee and resolve the dispute, not by the lawsuit in the People's Court. Regarding international arbitration, because both Japan and China are members of the New York Treaty established for foreign arbitration practices, arbitration institutions in any country can make arbitral awards. As the main arbitration institution, there are the China International Economic and Trade Arbitration Commission (CIETAC) and the Japan International Institute of Arbitration. Arbitration in China is based on the arbitration law. In the ordinary arbitration process, the arbitrator will be selected by the parties and hearings will be held. After that, judgment of dispute and expenses will be given.
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