Sui Zhong Fa [2020] No. 87

　　Notice of Guangzhou Intermediate People's Court, China Banking and Insurance Regulatory Commission Guangdong Bureau and Business Management Department of Guangzhou Branch,  People's Bank of China on Issuing of the Implementing Opinions on Improvement in the Quality and Effectiveness of Bankruptcy Proceedings and Co-operation in Optimizing the Business Environment

To allprimary people's courts, all departments of this Court, and all banking institutions in Guangzhou,

　　To improve the efficiency of handling bankruptcy matters, ensure that administrators perform their duties in accordance with the law, protect the legitimate rights and interests of creditors of banking institutions, prevent and resolve major financial risks, and fully optimize the business environment of the City, the Implementing Opinions on Improvement in the Quality and Effectiveness of Bankruptcy Proceedings and Co-operation in Optimizing the Business Environment is hereby formulated and distributed to you, please implement it carefully.

　　Guangzhou Intermediate People's Court,

　　China Banking and Insurance Regulatory Commission Guangdong Bureau

　　Business Management Department of Guangzhou Branch, People's Bank of China

　　May 26, 2020

　　Implementing Opinions on Improvement in the Quality and Effectiveness of Bankruptcy Proceedings and Co-operation in Optimizing the Business Environment

　　To improve the efficiency of handling bankruptcy matters, ensure that administrators perform their legal duties, actively save companies with restructuring value or their businesses, maximize the operating value of the main business of companies, give full play to the important role of bankruptcy trial in improving the mechanism of relief and withdrawal of market entities, increase debt repayment rate, intensify efforts to crack down on debt evasion and abatement, prevent and resolve major financial risks, comprehensively optimize business environment of the City and serve the high-quality development of the real economy, Guangzhou Intermediate People's Court, China Banking and Insurance Regulatory Commission Guangdong Bureau and Business Management Department of Guangzhou Branch, People's Bank of China have formulated the following implementing opinions with consensus on strengthening cooperation and jointly promoting the optimization of the business environment of the City through full discussion and consultation.

　　I. To support and urge administrators to perform their duties in accordance with the law and improve the efficiency of handling bankruptcy matters

　　1. [Ensure that administrators perform their legal duties] The administrators shall, in accordance with the Enterprise Bankruptcy Law of the People's Republic of China and the appointment by the people's court, fully perform the duties of investigation, taking over, operation, disposition and distribution of the bankruptcy estate, engage in civil legal acts related to the bankrupt enterprise, and participate in legal proceedings on behalf of the bankrupt enterprise. The banking institutions shall actively cooperate with the administrators for the settlement business, such as querying the debtor's account information, release of the debtor's account from preservation measures, transfer of the debtor's account funds, cancellation of the debtor's account, etc., and the debtor's credit-related business.

　　2. [Use the "headquarter to headquarter" network for information query] The administrator should actively use information technology to improve the efficiency in the performance of its duties and reduce the time and cost of bankruptcy proceedings. Where the administrator makes inquiry about the property information such as the debtor's bank account, it should preferably apply to the people's court accepting the bankruptcy case to inquire through the "headquarter to headquarter" network and control system, and the people's court shall promptly feedback the results of the inquiry to the administrator.

　　3. [Legal documents required for the administrator to handle the business] In handling the business referred to in Article 1 of these Opinions, the administrator shall issue the following supporting documents: (1) decision of the people's court to accept the bankruptcy application; (2) decision of the people's court to appoint the administrator; and (3) certificate of identity of the administrator, including its organization certificate and power of attorney, and a personal identity certificate of the person who handles specific business.

　　After the people's court appoints an administrator, the administrator shall promptly upload relevant information of the case to relevant information platform. Banking institutions may verify the identity of the administrator through the people's court or relevant information platform.

　　If the bank account of a debtor, which has been controlled by the banking institution for payment because of long-term non-use thereof, really needs to be used, the administrator may  activate the account according to the formalities stipulated in this Article.

　　4. [Process for the administrator to open and cancel temporary accounts] A financial institution may, upon application of the administrator, open RMB account and foreign exchange account, and open online banking service. The administrator shall apply to the financial institution for processing with the legal documents specified in Article 3 of these Opinions.

　　The term of the temporary account of the administrator may be set and extended as requested by the administrator. The financial institution shall promptly notify the administrator before the expiration of the term of the temporary account.

　　Under the premise of ensuring that the risk is controllable,banking institutions are encouraged to simplify the processing procedures and handle the business of account change, cancellation and extension through electronic channels.

　　When handling the cancellation of the temporary account, the administrator shall submit the legal documents stipulated in Article3 of these Opinions and the decision of the people's court to conclude the bankruptcy proceedings, and the financial institution shall promptly process as requested.

　　5. [Search for the account information of bankrupt enterprises] The administrator has the right to inquire about the debtor's account information (including historical accounts and existing accounts) from banking institutions, including the account name, account number, status, balance, transaction record, counterparty name, statement, transaction document, account opening information, specimen seal and electronic and paper information on whether the account is frozen judicially, pledged and restricted.

　　Where a debtor opens accounts with branches ofcertain banking institutions in Guangdong Province, the administrator may inquire about the debtor's account information in the superior institution of such branches. Where the superior institution does not have the function of inquiry, the administrator may, in consultation with relevant banking institution, simplify the inquiry.

　　6. [Inquire the information of affiliated entities of the bankrupt enterprise] Where it is necessary for the administrator to inquire about the information of counterparty of the debtor's account or the account of the debtor's affiliated companies, actual controller, investor or executives for performance of its duties, the administrator may apply to the people's court for investigation. The people's court may make inquiries to banking institutions by means of on-site enquiry, letters and public service e-mails.

　　7. [Timely response to inquiry] Banking institutions shall promptly respond to inquiries made by people's courts and administrators about account information. The inquiry transactions that could be answered on spot should be replied immediately, and those which could not be replied on spot should in principle be replied within three (3) business days in case of electronic information inquiry or ten (10) business days in case of paper and other manual inquiries.

　　The people's court and the administrator shall have obligation to keep confidential the information obtained by inquiry, especially the identity and property information of citizens and legal persons, and shall not use them for any purpose other than the handling of bankruptcy cases.

　　8. [Release of preservation of the debtor's account] A banking institution shall release the preservation of the account of the bankrupt enterprise on the basis of the documents listed in Article 3 of these Opinions provided by the administrator and the decision of the people's court accepting the bankruptcy case on releasing the preservation.

　　The banking institution shall,upon receipt of documents listed in Article 3 of these Opinions provided by the administrator and the Notice to Assist in Enforcement issued by the people's court accepting the bankruptcy case, stop payment from the account of the bankrupt enterprise.

　　9. [Use of seals] When an administrator applies to a banking institution for the settlement, credit and other related business of the debtor (i.e. the bankrupt enterprise), it may choose to use its own seal or the debtor's official seal.

　　Where it is necessary to change the debtor'sreserved seal specimen in a banking institution, the administrator shall fill in the application for change or sign an agreement in accordance with the procedures of the banking institution. The administrator shall handle the above business with the legal documents stipulated in Article 3 of these Opinions if the debtor's registered personnel and seal could not be found.

　　10. [Transfer of bankruptcy estate] A bank shall, within 3 business days after the administrator issues the documents specified in Article 3 of these Opinions, promptly transfer the funds of the account opened by the bankrupt enterprise with the bank to the administrator's account.

　　11. [Cancellation of the original account of the bankrupt enterprise] The deposit bank shall assist the administrator in the cancellation of the original account of the bankrupt enterprise.

　　In general, the administrator should cancel the accounts of the bankrupt enterprise in the following order: general account, special account, basic account.

　　12. [Assistance in audit of the bankrupt enterprise] The administrator has the right to entrust qualified audit institution(s) for comprehensive audit and special audit of the accounts of the bankrupt enterprise. Access to relevant account information shall be subject to Articles 5, 6 and 7 of these Opinions.

　　II. To help enterprises with prospective restructuring to get out of difficulties and support the development of real economy

　　13. [Active participation in bankruptcy proceedings] A banking institution as creditor should actively participate in and promote bankruptcy proceedings, speed up the internal decision-making process, actively seek the support from its superior banking institution, and exercise its voting rights in timely manner according to law.

　　14. [Restructuring and identification mechanism] In the settlement of the claims, a banking institution should comprehensively comb and identify enterprises in distress with restructuring value or its main business, apply to the people's court for restructuring in timely manner, and actively promote the restructuring and regeneration of the enterprises in distress or the overall sale of its main business with ongoing operating value.

　　A banking institution as creditor has the right to make suggestions on the adjustment of the shareholders' rights and interests, introduction of new shareholders, optimization of the investment composition and governance structure by a bankrupt enterprise, in which the administrator should actively coordinate. The administrator and the people's court shall give strong support to the draft restructuring plan which is conducive to the regeneration of the bankrupt enterprise but the investor group refuses to vote or fails to pass.

　　15. [Provision of new financing facilities] For a debtor with regeneration value, a banking institution should make credit decision prudently under the premise of legal compliance and controllable risk, and reasonably determine the financing cost. After the restructuring enterprise enters the bankruptcy proceedings, the new financial debt during the restructuring period, which meets the legal conditions, should be repaid first as the common debt.

　　During the period of the restructuring plan, the administrator shall strictly examine the financing needs of the restructuring enterprise and issue feasibility opinion on financing plan, assist the banking institution in the due diligence on loans, and truthfully provide the materials and information required for the banking institution.

　　16. [Financial creditors committee] For a debtor with a large proportion of financial claims and more than three financial creditors, a banking institution may, before or after the bankruptcy acceptance of the debtor, initiate the establishment of a financial creditors committee to participate in the enterprise crisis resolution work in advance, in accordance with the Circular of the General Office of the China Banking Regulatory Commission on the relevant Work of Creditors Committee of Banking Institutions.

　　In accordance with the principle of "one enterprise, one policy", the Financial Creditor Committee shall collectively study the measures, such as appreciation loan, stable loan, recover loan, rollover loan and restructuring, etc., to stabilize credit support and coordinate concerted action by financial creditors, and actively negotiate with debtors, carry out orderly related work, such as debt restructuring, pre-restructuring and restructuring of the debtor, etc., to ensure that banking institutions work together to support the development of the real economy.

　　17. [Credit repair of restructuring enterprise] The people's court may submit the mandate public information, such as decision to approve restructuring plan and decision confirming the completion of the restructuring plan, etc., to the basic database of financial credit information, in accordance with the requirements of the data reporting format of the basic database of financial credit information, and the local people's bank may submit it on its behalf when the corresponding technical conditions are not met.

　　The people's court shall ensure that the information provided is true and accurate, and promptly handle the dissent of relevant information subject forwarded by the people's bank. The financial creditor should submit the debtor's credit records promptly, completely and accurately under the legal framework, and promptly verify and deal with the credit dissent raised by the bankruptcy restructuring enterprise.

　　III. To safeguard the legitimate rights and interests of financial creditors and improve the recovery rate of secured claims

　　18. [Participation rights] The administrator or self-administered debtor shall actively listen to the opinions and demands of the financial creditors and the financial creditors committee when formulating the draft restructuring plan. The people's court should strengthen the examination of the legality and feasibility of the restructuring plan. Where the financial creditors and the financial creditors committee raise objections to the people's court for any provision of the restructuring plan, the people's court shall hold hearing and listen to the opinions of the financial creditors and the financial creditors committee.

　　19. [Right to know and right of supervision] The people's court shall urge and guide the administrator to strengthen the standardization and transparency of the bankruptcy administration work, and urge the administrator to facilitate the financial creditors to inquire about the property status report of the bankrupt enterprise, the resolution of the creditors' meeting, the resolution of the creditors committee, the asset appraisal report, the audit report and the restructuring plan. The financial creditors shall perform the obligation of confidentiality and shall not disclose the information obtained from the inquiry to any third party without the consent of the administrator.

　　IV. To strengthen the prevention of financial risks and intensify efforts to crack down on debt evasion and abatement

　　20. [Intensify efforts to crack down on debt evasion and abatement] Where the whereabouts of the debtor's property is unknown, or the creditors, investors and other interested parties have provided preliminary evidence or clear clues of the circumstances in which the debtor's related property may be illegally encroached, misappropriated or concealed by the legal representative, investors, actual controllers, directors or officers, the administrator shall promptly investigate the whereabouts of relevant property. The banking institution shall cooperate with the people's court and the administrator in the inquiry of relevant account information.

　　The people's court shall urge theadministrator to conduct due diligence, and assist and cooperate with banking institutions in cracking down on debt evasion and abatement. The linked sanction mechanism of the list of judicial discredited person and the debt evasion and abatement blacklist of banking institution should be implemented to effectively curb debt evasion and abatement.

　　The administrator shallforward the clue concerning the money laundering and predicate crimes of the bankrupt enterprise to the public security agency and report to the people's court.

　　21. [Strengthen the supervision for the administrator to perform its duties] The people's court should strengthen the supervision on the administrator’s performance of its duties. China Banking and Insurance Regulatory Commission and the People's Bank of China may report in writing to the people's court any illegal or improper acts that occur when the administrator performs its duties, and the people's court shall, in accordance with the Civil Procedure Law of the People's Republic of China and the Provisions of Supreme People's Court concerning the Appointment of Administrators in Enterprise Bankruptcy Cases, impose sanctions on the wrong doer or the administrator. The people's court may also deal with the administrator in accordance with Several Opinions of the Higher People's Court of Guangdong Province on Regulating the Selection and Supervision of Administrators in Enterprise Bankruptcy Cases and the Measures of Guangzhou Intermediate People's Court on the Supervision of the Works of Administrators of Enterprise Bankruptcy Cases.

　　22. [Applicable by reference] The liquidation group of a compulsory liquidation case may handle relevant business by reference to these Opinions.

　　V. Supplementary Provisions

　　23. [Department docking] The Bankruptcy Tribunal of Guangzhou Intermediate People's Court, the Policy and Regulation Department of China Banking and Insurance Regulatory Commission Guangdong Bureau and the Legal Affairs Division of Business Management Department of Guangzhou Branch, People's Bank of China should be acted as liaison department responsible for daily communication and coordination work and regular report of relevant works.

　　24. [Dynamic adjustment] These Opinions shall come into force upon signing by authorized representatives of the parties. In the future, the parties may adjust and perfect relevant contents through consultations according to the cooperation and experience.

　　25. [Scope of application] The term "banking institution" as mentioned in these Opinions refers to the banking institutions in Guangzhou.