20 14, 12 On August 2, Gloria M. Burns, the chief judge of the New Jersey District of the United States Federal Bankruptcy Court, signed an order to approve the application submitted by the representative of Zhejiang Jianshan Optoelectronic Co., Ltd. in the United States, acknowledging that the bankruptcy reorganization procedure of China (hereinafter referred to as "Jianshan Optoelectronic Case") has achieved extraterritorial bankruptcy effect in the United States.
This judgment is of great significance: as the first case in which an American court recognizes China's bankruptcy proceedings, it will certainly play a positive role as a model for other China enterprises seeking to incorporate their assets and creditor's rights in the United States into the bankruptcy proceedings initiated in China, and will also bring important enlightenment and possibility for China courts to recognize the effectiveness of the American bankruptcy proceedings in China in the future according to the principle of reciprocity.
1 case introduction
Zhejiang Jianshan Optoelectronic Co., Ltd. (hereinafter referred to as "Jianshan Company") is a key photovoltaic enterprise in Haining City, which was jointly established by eleven legal person enterprises and fifteen natural person shareholders with a registered capital of over 360 million yuan. Haining Rural Credit Cooperative Union of Zhejiang Province enjoys the outstanding principal of financial creditor's rights of the Company and its three subsidiaries (collectively referred to as "debtors") of RMB 65,438+0.1100 million.
20 1 13 years15 October, the applicant, Haining Rural Credit Cooperative Association, applied to the court for restructuring the debtor on the grounds that "the debtor has huge financial debts and is insolvent, unable to pay off due debts, but bankruptcy and restructuring is more conducive to protecting the interests of creditors and avoiding financial turmoil in Haining". The debtor did not raise any objection within the statutory time limit.
The People's Court of Haining City, Zhejiang Province ruled that the debtor company suffered serious losses when the whole photovoltaic industry was in a trough, and now it is unable to repay the bank loans due, and the debtor's operation is in trouble. However, the industry has gradually stepped out of the trough, and the state has issued a number of policies to support it. The photovoltaic industry is about to usher in new development opportunities. Therefore, it is feasible and necessary to carry out bankruptcy reorganization of the debtor and make it regenerate. From the creditor's point of view, bankruptcy liquidation may lead to a sharp depreciation of the debtor's assets and cause greater losses to creditors. Therefore, the court ruled that the debtor's application for bankruptcy reorganization was accepted. In accordance with the law, the liquidation group of Jianshan Company is appointed as the administrator of the debtor's bankruptcy reorganization case (hereinafter referred to as the "administrator"), which stipulates that the administrator has nine responsibilities such as "managing and disposing of the debtor's property and participating in litigation, arbitration or other legal procedures on behalf of the debtor". In this case, 1 19 creditors have declared claims of more than 3.32 billion yuan, and the total amount of confirmed claims is 654.38+73 billion yuan.
On June 30, 2004,2065438+,the hospital issued the Decision, indicating that the debtor "has a large amount of bankrupt property in the United States" (author's note: it is reported that the value is about1500,000 yuan, mainly solar panels located in a warehouse in New Jersey). According to the administrator's application, the supplementary decision on the scope of management responsibility is as follows: "The administrator has the right to seek relevant judicial relief from the American judicial organs in accordance with the provisions of Chapter 1 1 of the United States Code (the" Bankruptcy Law "), and has the right to take the steps it deems appropriate to perform its duties." Therefore, the bankruptcy administrator is explicitly authorized to seek bankruptcy relief in the United States as the representative of the debtor.
On July, 2065438 1 1, the administrator appointed an "authorized designee". It is authorized to "sign and submit all applications, statements and any other motions to the relevant courts in the United States ... to engage a law firm as the debtor's lawyer on behalf of the debtor ... and has the right to take all necessary and reasonable actions that the bankruptcy administrator or his appointed lawyer considers relevant to the initiation of such legal proceedings, so as to manage and recover all assets, rights and creditor's rights belonging to the debtor, including but not limited to: initiating the procedures in Chapter 15 of the United States Bankruptcy Law."
On July 6, 20 14, 16, an American lawyer hired by an appointed lawyer filed an application motion for "recognizing foreign main proceedings and providing relief and assistance" with the federal bankruptcy court in New Jersey, USA. The motion comprehensively expounds that the application meets the conditions for determining the foreign bankruptcy procedure in the US bankruptcy law: the bankruptcy case in China constitutes a "foreign main procedure" as defined in the US bankruptcy law; The "appointed agent" from China is a "foreign representative" in line with the definition of American bankruptcy law; In addition, this case has a complete set of supporting documents, such as civil rulings and decisions of China courts.
2 US court decisions
Chief Justice Burns held several hearings on July 24th, August 5th, 7th and 8th, 20 14, and finally signed an order on August 2nd, 20 14, approving this application:
1. According to Articles1517 (a) (1)-(3) and1517 (b) (/kloc-0) of the Federal Bankruptcy Law.
2. The order to immediately provide corresponding judicial relief in the United States was suspended: "According to Article 362, Article 15 19(a)( 1) and Article 152 1(a) of the Federal Bankruptcy Law, (not limited to) promoting the execution of all judgments or execution writs); Against the debtor or any property of the debtor in the United States (including property claimed but to be confirmed); And is prohibited from engaging in any act of owning, controlling, transferring, disposing of or restricting the debtor's property in the United States; Or carry out other acts against the debtor and its assets without the permission of the court ... Any ongoing transfer, restriction and disposal of the debtor's assets in the United States and its related income (including all claimed but yet to be confirmed) are suspended until the court issues relevant instructions. "
3 American court decisions and interpretation of American bankruptcy law
Transnational bankruptcy is an inevitable economic and legal phenomenon in economic globalization. Once a debtor whose assets are scattered in many countries (usually a large multinational company) becomes the object of bankruptcy proceedings, it is often urgent to cooperate with the bankruptcy courts of various countries to bridge the contradictions and conflicts between their bankruptcy legal systems and recognize the bankruptcy proceedings, thereby increasing the possibility of rescuing debtors in debt distress, promoting the fair and effective conduct of bankruptcy proceedings, preventing the assets of debtors scattered in various countries from being hidden or squandered, and safeguarding the interests of creditors distributed in various countries and the interests of debtors and their employees.
Take China as an example, China enterprises are stepping up their steps towards the world, either directly investing in developed countries in Europe and America or exporting a large number of commodities to these countries through international trade. When these China enterprises are insolvent in China and need bankruptcy liquidation and reorganization, whether the relevant procedures and court decisions in China can be effectively recognized by the courts in western countries is directly related to whether their assets placed in the invested countries or trading countries can become part of the bankruptcy property and be disposed of in a timely and effective manner. For example, during the bankruptcy case of Suntech in Wuxi, China on 20 13, Suntech Power, its listed company in the United States, was sued by American creditors for forced bankruptcy in the United States, and 47 power stations of Suntech Power in Italy were also sealed up by Italian courts during the same period. All these will lead to complex and intractable conflicts of transnational bankruptcy laws, which need to be solved by the legislative and judicial organs of various countries. At this time, the federal bankruptcy court in the United States gave active protection to the application from China in the Jianshan photoelectric case, which has important practical significance and demonstration value.
According to the new chapter 15 of the United States Federal Bankruptcy Law revised in 2005, applicants representing foreign bankruptcy proceedings (hereinafter referred to as "foreign representatives") have the right to directly apply to the United States court for recognition of foreign bankruptcy proceedings, request to start corresponding auxiliary proceedings in the United States, and obtain relevant bankruptcy protection. If the United States court approves these applications, the foreign representative will have the right to obtain bankruptcy relief directly or at the request of the United States bankruptcy court. Compared with the old bankruptcy law of the United States before 2005, these provisions boldly canceled the lengthy procedure of recognizing foreign judgments or diplomatic approvals in the original transnational bankruptcy management.
In order to be recognized by American courts, foreign representatives must prove that they meet the three requirements stipulated in article 15 17:
(1) Nature of foreign proceedings: the foreign bankruptcy proceedings are "foreign main proceedings (which refer to the commencement of proceedings in the country where the debtor's main interests are located)" or "non-main proceedings (which refer to the commencement of proceedings in the country where the debtor's institution is located)";
(2) Nature of the foreign representative: the foreign representative is a natural person or entity;
(3) Documents that meet the requirements listed in Article 15 15 have been submitted: (1) Notarized foreign court's decision to accept foreign procedures and appoint foreign representatives; (ii) A certificate issued by a foreign court, certifying that foreign proceedings are in progress and that the foreign representative has corresponding qualifications; Or (iii) if the supporting documents required in items (i) and (ii) are not available, any other supporting documents acceptable to American courts to prove the existence of foreign proceedings and the qualifications of foreign representatives.
It should be said that these documents are not cumbersome, and an application for recognition with appropriate legal documents will generally be completed in the shortest time. [5] Article 15 17 (c) of the Federal Bankruptcy Law explicitly requires the court to make a decision on whether or not to recognize it as soon as possible.
If the court considers that the application materials, foreign procedures and foreign representatives meet the requirements of Chapter 15, the court shall make a recognition order according to the mandatory provisions of Article 15 17, allowing foreign bankruptcy procedures to have corresponding bankruptcy effect on the debtor's assets in the United States. At this time, the property included in the bankruptcy proceedings in China will not only be limited to the property of the bankrupt debtor in China, but also include his property in the United States, so that the debtor's property in the United States will also be managed and distributed by the bankruptcy administrator in China through certain procedures, so as to pay off the debts to the maximum extent and protect the interests of all parties.
Throughout the facts and procedures of the Jianshan photoelectric case, the bankruptcy court in the United States examined the case in strict accordance with the above rules, made relevant judgments, and gave judicial relief.
Four legal points for the United States to recognize the extraterritorial effect of bankruptcy proceedings in China.
The Jianshan photoelectric case took less than a month from submitting an application to obtaining an approval order. The reason why we can get relief from American courts smoothly and quickly is because it has the color of a case. We can draw inferences from others and abstract the principle of universality, so as to obtain more successful cases in similar cases in the future.
1. Legal preparation
(1) Laws of China
In the face of the review by American judges, the bankruptcy administrators in China and their attorneys are bound to undertake the responsibility of comprehensively introducing the legal system, system, procedure and even fairness of China's bankruptcy law, so that American court judges can have a comprehensive and comparative understanding of China's bankruptcy procedure and dispel their doubts about whether the interests of American creditors can be fully and comprehensively protected in China. Therefore, it is also ready to give a full legal response to the objection motions that dissidents from the United States may face.
(2) American law.
Fully understand the specific provisions of the bankruptcy law of the United States, and make maximum use of the judicial relief of foreign procedures initiated by bankrupt debtors in the United States. For example, it is usually recognized as a "foreign main proceeding" and gets more timely and comprehensive relief than a "foreign non-main proceeding". Therefore, it should be argued that China is the country where the bankrupt debtor's main interests are located in China, not just one of the debtor's numerous business offices. Usually, unless there is evidence to the contrary, the court will assume that the country where the debtor's company is registered is the country where its main interests are located.
On the other hand, we should be fully prepared to deal with the judgment of American court judges: if the judgment is a foreign non-main procedure, we should quickly take out the application and actively strive for all available American legal remedies in the non-main procedure, although it is the second best.
By adding chapter 15 to the Federal Bankruptcy Law in 2005, the United States fully transplanted the principles and rules of the United Nations Model Law on Cross-Border Bankruptcy, recognized foreign bankruptcy procedures, and divided them into "foreign main procedures" and "foreign non-main procedures". One of the main results of this division is that foreign representatives will receive different degrees and forms of American judicial relief:
(1) According to article 1520, foreign representatives under foreign main proceedings will automatically obtain certain specific remedies equivalent to those available in domestic bankruptcy proceedings in the United States, such as applying automatic stay measures to debtors and their property located in the United States (article 362) and providing adequate protection (article 36 1). The foreign representative will have the right to manage the debtor's business, exercise the power of trustee, use, sell or lease the debtor's property located in the United States, and have the right to cancel the transfer of property after the commencement of bankruptcy proceedings; Moreover, the secured creditor's rights have no effect on the property acquired by the debtor after the commencement of bankruptcy proceedings in the United States (except the fruits of collateral agreed in the guarantee agreement).
These automatic effects mean that the foreign representative can effectively and timely prevent the debtor's property from being improperly transferred or hidden without applying for another order from the US bankruptcy court. At the same time, debtors, creditors and other possible stakeholders can gather in the court of the country where the center of main interests is located, and the court will handle domestic and foreign affairs related to bankruptcy in a unified way.
(2) If a foreign proceeding is only recognized as a "non-main proceeding", according to Article 152 1, the U.S. court can only give appropriate relief according to the subsequent application of the foreign representative, that is, the above-mentioned protective measures such as automatic stop will not take effect automatically, but the foreign representative needs to make an application on his own initiative in time, and the U.S. court has the discretion to decide whether to approve or not. This means that there is considerable uncertainty about whether the foreign procedures in this state can fully obtain judicial relief in the United States, and it may not be possible to prevent the transfer and concealment of property in time.
2. Physical preparation
The attorney of China administrator should make preparations in advance, and fully understand and master all kinds of information such as the type, quantity and storage location of assets of bankrupt enterprises in China in the United States; American buyers selling goods; American debtors of accounts receivable; Information about the owners and managers of fixed assets in the United States, and whether the relevant entities in the United States are aware of the bankruptcy proceedings initiated in China, and whether they have taken actions that are not conducive to the bankruptcy proceedings in China, such as selling, transferring and hiding assets in the United States.
The more sufficient and specific the relevant materials, the more you can win the support of China courts for filing applications in the United States, and improve the possibility of obtaining emergency judicial relief provided by American courts.
3. Program preparation
(1) With regard to the China procedure, it is necessary to comprehensively and meticulously prepare all kinds of supporting documents required for the United States to recognize overseas bankruptcy procedures, from the filing documents, relevant rulings and judgments of China courts, to all kinds of supporting documents issued by bankrupt or reorganized debtors and administrators in China, as well as a set of indispensable and meticulous notarization procedures and translation procedures, so as to prevent American courts and possible American dissidents from presenting documents to China. The judicial organs in the United States attach great importance to the compliance of the procedure. A slight mistake in the documents from foreign countries may lead to unnecessary delay or even complete failure of the procedure.
(2) In terms of American procedures, American lawyers who are familiar with enterprise bankruptcy procedures are selected as American agents to start American procedures, and they cooperate with American lawyers, coordinate with Chinese and American lawyers, and choose appropriate courts of jurisdiction to make comprehensive preparations for filing applications.
4. Pay attention to speed and rhythm
All preparatory procedures should be carried out quickly, and special attention should be paid not to disturb American stakeholders in advance. At the same time, it is necessary to fully explain the urgency of approving the application to the American court that accepts the case, and inform the American court that if the order is not made as soon as possible, the property may be transferred or hidden.
5 The possible influence of Jianshan Optoelectronic case on the legal circles in China and the courts in China.
It can be said that the Jianshan Optoelectronic case has played a certain exemplary role in the recognition of foreign bankruptcy proceedings by China courts, and made it possible for China courts to apply the principle of reciprocity to recognize bankruptcy proceedings from the United States.
In recent years, transnational bankruptcy cases of multinational corporations in China and the United States have increased day by day, but so far there is no international convention or uniform rules to coordinate the transnational bankruptcy systems of the two countries. China and the United States have not signed a bilateral treaty to adjust the legal issues of cross-border bankruptcy between China and the United States, and this state will not change in the short term.
Although the bankruptcy laws of China and the United States have already made unilateral legislative provisions on transnational bankruptcy, Article 5 of China's Enterprise Bankruptcy Law, which was revised in 2007, provides the possibility to recognize the extraterritorial effect of foreign bankruptcy procedures in China. However, compared with Chapter 15 of the Bankruptcy Law of the United States, this provision is too general and lacks specific guidance for China courts. In particular, unlike the American legal system that transplanted and accepted the "revised universality principle" of the United Nations Model Law without the requirement of reciprocity, China still maintains the characteristics of regionalism principle, which requires reciprocity as the premise. If the China court finds that this extraterritorial bankruptcy procedure is contrary to the public interest of China society, it can refuse to recognize its effectiveness. In practice, it is difficult for China courts to recognize the extraterritorial effect of overseas bankruptcy proceedings in China.
However, it can be expected that the success of the recognition of the extraterritorial effect of the bankruptcy procedure in the Jianshan photoelectric case in the United States will provide a practical and mutually beneficial premise for the China court to recognize the extraterritorial effect of the bankruptcy procedure in China in the future.