Viewpoint | A brief analysis of the administrator's right of revocation from a case
Published:
2022-12-26
Brief of the case Due to obvious loss of solvency, a company filed an application for bankruptcy reorganization with the court of first instance on May 20, 2016. The court of first instance made a civil ruling on May 25, 2016, ruling to accept the reorganization of a company, and appointed a bankruptcy administrator on the same day. On May 24, 2016, a bank account (account number 15 ××××××) opened by a company in a branch of Agricultural Bank of China remitted US $2558558.90. After the payment arrived in the above-mentioned account, it was settled by a branch of Agricultural Bank of China on the same day (exchange rate 6.5424) and deducted RMB 16739115.75 yuan to repay the bank's claim on a company. The manager of a company filed a lawsuit with the court of first instance: 1. Revoke a company's act of paying US $2558558.90 (equivalent to RMB 16739115.75) to a branch of Agricultural Bank of China through its bank account (account number 15 ××××××); 2. A branch of Agricultural Bank of China was ordered to return the debtor's property to US $2558558.90 (equivalent to RMB 16739115.75) and the interest from the date of transfer to the date of actual return (calculated according to the bank's loan interest rate for the same period). A branch of ABC claimed that it had refunded 10 per cent of the amount of the letter of credit, as well as discrepancy charges and telegraph charges totaling $255988.89 at the request of the issuing bank, the Ethiopian Commercial Bank. The court of first instance held that the matter did not belong to the same legal relationship as the case and refused to deal with it. Judgment of first instance: The 1. revoked a company's act of paying off a loan of RMB 16739115.75 (US $2558558.90) to a branch of Agricultural Bank of China on May 24, 2016; 2. a branch of Agricultural Bank of China will pay a certain company manager within 10 days from the effective date of the first instance judgment. The debt payment is RMB 16739115.75 yuan (US $2558558.90). A branch of Agricultural Bank of 3. paid an interest loss of RMB 16739115.75 (US $2558558.90) to the manager of a company within 10 days from the effective date of the first instance judgment (calculated from May 25, 2016 to the judgment payable date based on the benchmark deposit interest rate for the same period). The case acceptance fee of 122235 yuan shall be borne by a branch of Agricultural Bank of China. After the first instance judgment, a branch of the Agricultural Bank of China appealed against the first instance judgment. Its appeal request is: cassation, dismissal of the appellee's claim, and the costs of the proceedings shall be borne by the appellee. The fact that the appellant claimed to have returned $255988.89 to the Ethiopian Commercial Bank was confirmed by the court of second instance because the manager of a company had no objection to its authenticity. The court of second instance accepted the appeal of a branch of Agricultural Bank of China, and after hearing, made the following judgment: the 1. revoked a company's act of paying off a loan of 15064334.03 yuan (US $2302570.01) to a branch of Agricultural Bank of China on May 24, 2016; 2. a branch of Agricultural Bank of China paid 15064334.03 yuan (US $2302570.01) to the manager of a company within 10 days from the effective date of this judgment. A branch of Agricultural Bank of 3. shall pay an interest loss of RMB 15064334.03 (US $2302570.01) to the manager of a company within ten days from the effective date of this judgment (calculated from May 25, 2016 to the payment date determined by this judgment based on the benchmark deposit interest rate for the same period). legal analysis The purpose of the bankruptcy avoidance system is to safeguard the overall interests of creditors and realize the value of fair settlement. Through the avoidance of the relevant acts of the debtor, the substantive equality between creditors is maintained and the fair distribution of the estate among all creditors is realized. The provisions of Article 32 of the the People's Republic of China Enterprise Bankruptcy Law indicate the legislative intent that the individual liquidation of the debtor under specific circumstances should be revoked in accordance with the law. ▲ First of all, regarding the subject of litigation in this case-whether the administrator can sue in his own name. According to Article 32 of the the People's Republic of China Enterprise Bankruptcy Law, the administrator has the right to bring an action in his own name. ▲ Secondly, if the deduction is based on the contract and the deduction is automatically deducted by the banking system, does it constitute an individual settlement. Regardless of whether the deduction is based on a contractual agreement, the act of pre-authorizing the bank's automatic deduction or the bank's unilateral deduction constitutes an individual settlement. Thirdly, both active and passive liquidation can constitute individual liquidation. Even if a company is passively liquidated, it is still a company that has settled individual claims. If it is determined that the bank's unilateral deduction is not a debtor's liquidation behavior and does not fall within the scope of Article 32 of the the People's Republic of China Enterprise Bankruptcy Law, according to this logic, then even after entering the bankruptcy procedure, the bank can still receive priority compensation through unilateral deduction instead of being regarded as the debtor's individual liquidation, which will lead to the principle of prohibiting individual liquidation stipulated in Article 16 of the the People's Republic of China Enterprise Bankruptcy Law being useless to the debtor's bank. Finally, according to the the People's Republic of China Enterprise Bankruptcy Law and relevant judicial interpretations, the creditor's self-relief in bankruptcy proceedings is limited to the right of set-off stipulated in Article 40 of the the People's Republic of China Enterprise Bankruptcy Law. The claim that creditors can be self-relief at will is contrary to the principle of intensive and fair liquidation of debts in bankruptcy proceedings. Self-relief cannot be a reason to deny that this case constitutes individual settlement. Lawyer's opinion According to Article 32 of the the People's Republic of China Enterprise Bankruptcy Law: "If, within six months before the people's court accepts the bankruptcy petition, the debtor still pays off the individual creditors under the circumstances specified in the first paragraph of Article 2 of this Law, the administrator has the right to request the people's court to revoke it. However, unless the individual settlement benefits the debtor's property." This case is not a case of individual liquidation benefiting the debtor's property and should therefore be set aside. In order to obtain the support of the people's court, the right of bankruptcy revocation shall meet the following conditions: First, the debtor has a cause of bankruptcy. Due to obvious loss of solvency, a company filed an application for bankruptcy reorganization with the court of first instance on May 20, 2016. The court of first instance made a civil ruling on May 25, 2016, ruling to accept the reorganization of a company, and appointed a bankruptcy administrator on the same day. Secondly, the debtor pays off individual creditors. On May 24, 2016, a branch of Agricultural Bank of China deducted 16739115.75 yuan to repay the bank's creditor's rights to a company. The individual settlement shall be within six months before the people's court accepts the bankruptcy application. Because the company entered the bankruptcy liquidation procedure on May 25, 2016, and the Agricultural Bank of China carried out the deduction on May 24, 2016, which occurred within six months before a company was accepted by the court for bankruptcy application, which was an individual liquidation act. Finally, the individual settlement did not benefit the debtor's property. Article Link: 1. Article 2 of the the People's Republic of China Enterprise Bankruptcy Law: If an enterprise legal person is unable to pay off the debts due and the assets are insufficient to pay off all the debts or are manifestly insolvent, the debts shall be liquidated in accordance with the provisions of this Law. 2. Article 16 of the the People's Republic of China Enterprise Bankruptcy Law: After the people's court accepts the bankruptcy application, the debtor's debt settlement to individual creditors is invalid. 3. Article 32 of the the People's Republic of China Enterprise Bankruptcy Law: Within six months before the people's court accepts the bankruptcy application, if the debtor has the circumstances stipulated in the first paragraph of Article 2 of this Law and still pays off individual creditors, the administrator shall have the right to request the people's court to revoke it. Except where individual settlements benefit the debtor's property. 4. Provisions of the Supreme People's Court on Several Issues Concerning the Application of the the People's Republic of China Enterprise Bankruptcy Law (II) Article 44 Within six months before the acceptance of the bankruptcy application, the debtor has the circumstances specified in the first paragraph of Article 2 of the Enterprise Bankruptcy Law, and the debtor and Individual creditors pay off individual creditors by way of offset, and the creditor's rights and debts offset belong to one of the circumstances specified in (II) and (III) of Article 40 of the Enterprise Bankruptcy Law, if the administrator files a lawsuit with the people's court within three months from the date of acceptance of the bankruptcy application, claiming that the set-off is invalid, the people's court shall support it. 5. Provisions of the Supreme People's Court on Several Issues Concerning the Application of the the People's Republic of China Enterprise Bankruptcy Law (II) Article 9 Where an administrator files a lawsuit in accordance with the provisions of Articles 31 and 32 of the Enterprise Bankruptcy Law, the people's court shall support the request for the cancellation of relevant acts involving the debtor's property and the return of the debtor's property by the counterpart.
Brief of the case
Due to obvious loss of solvency, a company filed an application for bankruptcy reorganization with the court of first instance on May 20, 2016. The court of first instance made a civil ruling on May 25, 2016, ruling to accept the reorganization of a company, and appointed a bankruptcy administrator on the same day. On May 24, 2016, a bank account (account number 15 ××××××) opened by a company in a branch of Agricultural Bank of China remitted US $2558558.90. After the payment arrived in the above-mentioned account, it was settled by a branch of Agricultural Bank of China on the same day (exchange rate 6.5424) and deducted RMB 16739115.75 yuan to repay the bank's claim on a company.
The manager of a company filed a lawsuit with the court of first instance: 1. Revoke a company's act of paying US $2558558.90 (equivalent to RMB 16739115.75) to a branch of Agricultural Bank of China through its bank account (account number 15 ××××××); 2. A branch of Agricultural Bank of China was ordered to return the debtor's property to US $2558558.90 (equivalent to RMB 16739115.75) and the interest from the date of transfer to the date of actual return (calculated according to the bank's loan interest rate for the same period). A branch of ABC claimed that it had refunded 10 per cent of the amount of the letter of credit, as well as discrepancy charges and telegraph charges totaling $255988.89 at the request of the issuing bank, the Ethiopian Commercial Bank. The court of first instance held that the matter did not belong to the same legal relationship as the case and refused to deal with it.
Judgment of first instance: The 1. revoked a company's act of paying off a loan of RMB 16739115.75 (US $2558558.90) to a branch of Agricultural Bank of China on May 24, 2016; 2. a branch of Agricultural Bank of China will pay a certain company manager within 10 days from the effective date of the first instance judgment. The debt payment is RMB 16739115.75 yuan (US $2558558.90). A branch of Agricultural Bank of 3. paid an interest loss of RMB 16739115.75 (US $2558558.90) to the manager of a company within 10 days from the effective date of the first instance judgment (calculated from May 25, 2016 to the judgment payable date based on the benchmark deposit interest rate for the same period). The case acceptance fee of 122235 yuan shall be borne by a branch of Agricultural Bank of China.
After the first instance judgment, a branch of the Agricultural Bank of China appealed against the first instance judgment. Its appeal request is: cassation, dismissal of the appellee's claim, and the costs of the proceedings shall be borne by the appellee. The fact that the appellant claimed to have returned $255988.89 to the Ethiopian Commercial Bank was confirmed by the court of second instance because the manager of a company had no objection to its authenticity.
The court of second instance accepted the appeal of a branch of Agricultural Bank of China, and after hearing, made the following judgment: the 1. revoked a company's act of paying off a loan of 15064334.03 yuan (US $2302570.01) to a branch of Agricultural Bank of China on May 24, 2016; 2. a branch of Agricultural Bank of China paid 15064334.03 yuan (US $2302570.01) to the manager of a company within 10 days from the effective date of this judgment. A branch of Agricultural Bank of 3. shall pay an interest loss of RMB 15064334.03 (US $2302570.01) to the manager of a company within ten days from the effective date of this judgment (calculated from May 25, 2016 to the payment date determined by this judgment based on the benchmark deposit interest rate for the same period).
legal analysis
The purpose of the bankruptcy avoidance system is to safeguard the overall interests of creditors and realize the value of fair settlement. Through the avoidance of the relevant acts of the debtor, the substantive equality between creditors is maintained and the fair distribution of the estate among all creditors is realized. The provisions of Article 32 of the the People's Republic of China Enterprise Bankruptcy Law indicate the legislative intent that the individual liquidation of the debtor under specific circumstances should be revoked in accordance with the law.
▲ First of all, regarding the subject of litigation in this case-whether the administrator can sue in his own name.
According to Article 32 of the the People's Republic of China Enterprise Bankruptcy Law, the administrator has the right to bring an action in his own name.
▲ Secondly, if the deduction is based on the contract and the deduction is automatically deducted by the banking system, does it constitute an individual settlement.
Regardless of whether the deduction is based on a contractual agreement, the act of pre-authorizing the bank's automatic deduction or the bank's unilateral deduction constitutes an individual settlement.
Thirdly, both active and passive liquidation can constitute individual liquidation. Even if a company is passively liquidated, it is still a company that has settled individual claims. If it is determined that the bank's unilateral deduction is not a debtor's liquidation behavior and does not fall within the scope of Article 32 of the the People's Republic of China Enterprise Bankruptcy Law, according to this logic, then even after entering the bankruptcy procedure, the bank can still receive priority compensation through unilateral deduction instead of being regarded as the debtor's individual liquidation, which will lead to the principle of prohibiting individual liquidation stipulated in Article 16 of the the People's Republic of China Enterprise Bankruptcy Law being useless to the debtor's bank.
Finally, according to the the People's Republic of China Enterprise Bankruptcy Law and relevant judicial interpretations, the creditor's self-relief in bankruptcy proceedings is limited to the right of set-off stipulated in Article 40 of the the People's Republic of China Enterprise Bankruptcy Law. The claim that creditors can be self-relief at will is contrary to the principle of intensive and fair liquidation of debts in bankruptcy proceedings. Self-relief cannot be a reason to deny that this case constitutes individual settlement.
Lawyer's opinion
According to Article 32 of the the People's Republic of China Enterprise Bankruptcy Law: "If, within six months before the people's court accepts the bankruptcy petition, the debtor still pays off the individual creditors under the circumstances specified in the first paragraph of Article 2 of this Law, the administrator has the right to request the people's court to revoke it. However, unless the individual settlement benefits the debtor's property." This case is not a case of individual liquidation benefiting the debtor's property and should therefore be set aside.
In order to obtain the support of the people's court, the right of bankruptcy revocation shall meet the following conditions:
First, the debtor has a cause of bankruptcy.
Due to obvious loss of solvency, a company filed an application for bankruptcy reorganization with the court of first instance on May 20, 2016. The court of first instance made a civil ruling on May 25, 2016, ruling to accept the reorganization of a company, and appointed a bankruptcy administrator on the same day.
Secondly, the debtor pays off individual creditors.
On May 24, 2016, a branch of Agricultural Bank of China deducted 16739115.75 yuan to repay the bank's creditor's rights to a company.
The individual settlement shall be within six months before the people's court accepts the bankruptcy application.
Because the company entered the bankruptcy liquidation procedure on May 25, 2016, and the Agricultural Bank of China carried out the deduction on May 24, 2016, which occurred within six months before a company was accepted by the court for bankruptcy application, which was an individual liquidation act.
Finally, the individual settlement did not benefit the debtor's property.
Article Link:
1. Article 2 of the the People's Republic of China Enterprise Bankruptcy Law: If an enterprise legal person is unable to pay off the debts due and the assets are insufficient to pay off all the debts or are manifestly insolvent, the debts shall be liquidated in accordance with the provisions of this Law.
2. Article 16 of the the People's Republic of China Enterprise Bankruptcy Law: After the people's court accepts the bankruptcy application, the debtor's debt settlement to individual creditors is invalid.
3. Article 32 of the the People's Republic of China Enterprise Bankruptcy Law: Within six months before the people's court accepts the bankruptcy application, if the debtor has the circumstances stipulated in the first paragraph of Article 2 of this Law and still pays off individual creditors, the administrator shall have the right to request the people's court to revoke it. Except where individual settlements benefit the debtor's property.
4. Provisions of the Supreme People's Court on Several Issues Concerning the Application of the the People's Republic of China Enterprise Bankruptcy Law (II) Article 44 Within six months before the acceptance of the bankruptcy application, the debtor has the circumstances specified in the first paragraph of Article 2 of the Enterprise Bankruptcy Law, and the debtor and Individual creditors pay off individual creditors by way of offset, and the creditor's rights and debts offset belong to one of the circumstances specified in (II) and (III) of Article 40 of the Enterprise Bankruptcy Law, if the administrator files a lawsuit with the people's court within three months from the date of acceptance of the bankruptcy application, claiming that the set-off is invalid, the people's court shall support it.
5. Provisions of the Supreme People's Court on Several Issues Concerning the Application of the the People's Republic of China Enterprise Bankruptcy Law (II) Article 9 Where an administrator files a lawsuit in accordance with the provisions of Articles 31 and 32 of the Enterprise Bankruptcy Law, the people's court shall support the request for the cancellation of relevant acts involving the debtor's property and the return of the debtor's property by the counterpart.
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