Viewpoint... Study on the exercise of the creditor's special right to know in bankruptcy proceedings.

Published:

2022-12-06

The right of access to an individual creditor in insolvency proceedings is not a statutory independent right, but a way for creditors to exercise their right to know. The creditor's right to know is divided into two main categories, one for the general right to know, one for the special right to know. The former is the right created by the the People's Republic of China Enterprise Bankruptcy Law (hereinafter referred to as the Enterprise Bankruptcy Law) and other relevant laws for the common interests of all creditors. It is mainly exercised collectively through creditors' meetings, creditors' committees, etc. The realization of creditors' general right to know is mainly realized by the courts and managers in the process of performing their duties, actively disclosing relevant information to creditors, and generally does not require creditors to apply voluntarily, the special right to know, on the other hand, is a right created for an individual creditor and is generally exercised by an individual creditor on its own initiative, without being dependent on the creditor as a whole. The creation of the special right to know gives the initiative to protect the rights and interests of individual creditors, while the exercise of rights by individual creditors directly affects the protection of the rights of other creditors and debtors. Presentation of 1. issues The Enterprise Bankruptcy Law, as a law that combines procedural law and substantive law, is of great significance in regulating bankruptcy proceedings, paying off claims and debts fairly, and safeguarding the legitimate rights and interests of creditors and debtors. The Enterprise Bankruptcy Law has both the protection of the interests of creditors and the protection of the interests of debtors. However, in the case of the debtor's bankruptcy, there is also uncertainty about the amount and time of settlement of the creditor's claim, which makes it more difficult for the already opposing creditors and debtors to cooperate with each other in the case of the debtor's bankruptcy to achieve the purpose of fair settlement of claims and saving the enterprise. In practice, creditors often, in order to avoid the "evasion of debts" of bankrupt enterprises, often to protect their right to know, to the bankrupt enterprise administrator, the court to disclose all the information of bankruptcy proceedings. This requirement of creditors will undoubtedly bring great pressure to the work of the administrator of the bankrupt enterprise. If the creditor's right to know is not maintained, the administrator will face the risk of performing his duties. Then defining the exercise of individual creditors' right to know in bankruptcy proceedings can not only safeguard the legitimate rights and interests of other creditors, but also protect the rights and interests of debtors, but also give the administrator to do a good job of performance risk prevention. 2. creditors special right to know the main legal search. Through the search of legal provisions, the scope of the creditor's special right to know is mainly to consult the creditor's rights form, the creditor's rights register, the claim declaration material, the debtor's property status report, the creditor's meeting resolution, the creditor committee resolution, the administrator's supervision report and other financial and business information required to participate in the bankruptcy proceedings. The constituent elements and limiting elements of the exercise of the special right to know of 3. creditors. Since the protection of the special right to know does not fall within the scope of the people's court's acceptance of a civil case, the public judgment document does not have the relevant creditor's special right to know litigation. By combing through the legal provisions and typical cases of bankruptcy cases, combined with the author's experience in handling bankruptcy cases, the exercise of the creditor's special right to know needs to meet the following conditions, but also needs certain restrictions, so as to balance the protection of the rights and interests of individual creditors, other creditors and debtors. The Constitutive Elements of the Exercise of Special Right to Know in (I) 1. The subject of the inspection has the appropriate identity of a real creditor. The right to know is the right of creditors in bankruptcy proceedings and should be protected. However, there is a different understanding of whether the creditor here is a creditor who declares his claim in accordance with the law or a creditor who has been verified by the administrator, the creditors' meeting and the court ruling. I prefer the latter. In bankruptcy practice, the first-hand creditor information obtained by the administrator is the creditor's rights list provided by the debtor. Based on the time pressure of notifying the creditor to declare the creditor's rights (notifying the known creditor within 25 days from the date of accepting the bankruptcy application), the administrator generally sends the creditor's rights declaration documents directly to the creditor according to the creditor's rights list provided by the debtor without checking the creditor's rights list. However, there are often reasons such as the elimination of creditor's rights due to bookkeeping errors and the elimination of creditor's rights due to the limitation of action. The creditor in the creditor's rights list does not have the real creditor identity. At this time, if the debtor's financial and business information is provided to the "actual creditor" who no longer has the actual creditor-debt relationship, the relevant information will be leaked, undoubtedly damaging the legitimate rights and interests of the real creditor and the debtor. 2. Access should be limited to the financial and business information of the debtor involved in the insolvency proceedings. The Enterprise Bankruptcy Law III provides that individual creditors have the right to access the debtor's financial and business information necessary to participate in the insolvency proceedings, such as the debtor's property status report, the resolution of the creditors' meeting, the resolution of the creditors' committee, the administrator's supervision report, etc. If the administrator refuses to provide it without justifiable reasons, the creditor may request the people's court to make a decision; the people's court shall make a decision within five days. The scope of access to individual creditors is clearly defined in the Enterprise Bankruptcy Law III, which is limited to financial and operational information relating to insolvency proceedings. 3. The purpose of access is legitimate and should be applied to the administrator, and the administrator should provide access to the information in accordance with the law. In practice, the reason for individual creditors to apply for access to information is generally to verify the creditor's rights, but it does not rule out that there is a contradiction between individual creditors and debtors in the process of creditor's rights settlement, or because creditors who have entered the enforcement procedure want to find out the reasons for the defects of the bankruptcy procedure because the debtor enters the bankruptcy procedure. In this regard, the manager should strictly review its application materials, communicate with it for the purpose and scope of inspection, and see if there are any materials involving commercial secrets and not within its scope of inspection. If so, a confidentiality agreement should be signed, and the inspection site should also be attended by the manager. Restrictive elements of the exercise of the special right to know in (II) 1. Scope limitations. The scope of the individual creditor's application for inspection shall be limited to the scope of the materials taken over by the administrator. The manager takes over the company's materials mainly include: the company's seal, licenses, financial information, personnel information, litigation information and other documents, movable property, real estate, intangible assets, etc. Sometimes the debtor's operation and management system is not very perfect, and there may be incomplete financial account books, personnel data, and incomplete contracts related to the daily operation of the enterprise. At this time, it is not possible to require the administrator to provide financial information and operation information for individual creditors in full accordance with the requirements of individual creditors. Therefore, the scope of individual creditors applying for inspection should be limited to the scope of materials taken over by the administrator. 2. Time and place restrictions. The realization of the creditor's special right to know mainly depends on the administrator to provide individual creditors with all kinds of materials they need. However, in practice, the work of the administrator is complicated, and the requirements of individual creditors undoubtedly increase the workload of the administrator, especially the need to provide matching information for creditors in accordance with their requirements. In order to facilitate the work of the administrator, the administrator may require creditors to provide information access to creditors at the administrator's office within a fixed working day during the administrator's working hours. 3. Restrictions on ways. In the "Enterprise Bankruptcy Law" and related legal provisions, the exercise of the special right to know is stipulated, that is, "inspection", which does not include "copy, extract". However, in the theoretical circle, there is another understanding of "access", that is, it should not be limited to the meaning of access, but should be interpreted from the purpose of "access" exercise should realize the right, allowing individual creditors to copy, volume (copy), photograph, scan, and by professional knowledge of lawyers, accountants, appraisers to assist creditors to access. In this regard, in the course of actual business operations, the administrator should consider the way of access to information materials in the light of the purpose of individual creditors and whether they are related to their claims, allowing access to the scope of materials and other factors. Information Protection in the Exercise of 4. Access Creditors' access to exercise rights in bankruptcy proceedings involves the protection of trade secrets and personal information. In practice, it is very important for the manager to balance the creditor's right to know, trade secrets and personal information protection. When the administrator allows creditors to inspect the exercise of rights, as long as it complies with the law and strictly performs the duties of the administrator in accordance with the law, the following measures may be taken: 1. Require the creditor's declaration to promise in writing that the interested party shall consult the information of its claim declaration. The administrator may adopt a clause expressly indicating on the claim return that allows the interested party to access the information of its filing materials, or it may allow the creditor to provide a separate written commitment document to allow the interested party to access it. 2. If it is required to consult the information of the operation, finance and major contracts of the bankrupt enterprise, if it involves trade secrets, the creditor shall sign a confidentiality agreement. 3. If state secrets are involved, in principle, the administrator may not grant permission, or inform the interested party to apply to the court, and the court decides whether to grant access. Obstacles and remedies for 5. access to exercise rights 1. Check the exercise obstacles. In practice, there is an objective situation in which a single creditor's access to the exercise is not possible or smooth. First, there is no material to consult due to the lack of information caused by the debtor or the failure to hand over to the manager due to complicated reasons such as illegal operation. Second, the manager cannot meet the inspection requirements in time due to heavy management work. Third, it may be due to investors' reasons, worrying that creditors' inspection will bring interest disputes to investors, affecting the progress of reorganization procedures and passively or neglecting to provide access information to creditors. 2. Access to exercise routes Access to exercise rights as a way to protect the right to know, creditors exercise does not have the right to sue, can not be litigation to request the court decision, can only apply to the administrator, if the administrator does not allow, the court review and decision.

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