Viewpoint... Bankruptcy proceedings and the lifting of height limit measures.

Published:

2022-09-05

With the changes in the domestic and international economic situation and the need to optimize the domestic business environment, it has become a rigid policy to promote the merger, reorganization and liquidation of backward enterprises, and bankruptcy cases have also been included in the assessment indicators. the problem of legal application between bankruptcy procedures and measures to restrict high consumption has become more and more prominent, and the number of relevant legal consultation and enforcement objection agency cases has gradually increased. However, due to the lack of clear legal provisions, judicial practice is not uniform, this paper will be the debtor into the bankruptcy proceedings to be declared bankrupt, can lift the enterprise related personnel of the high limit measures to explore and analyze, with a view to providing reference for practical operation. The time node of the measure of lifting the high limit of the related personnel of the enterprise in the practice of 1. bankruptcy. The second paragraph of Article 2 of the provisions of the Supreme People's Court on restricting the high consumption of the person subject to execution (hereinafter referred to as the "provisions on restricting high consumption") stipulates that "if the person subject to execution is a unit, after the consumption restriction measures are taken, the person subject to execution and his legal representative, principal person in charge, person directly responsible for affecting the performance of debts and actual controller shall not carry out the acts specified in the preceding paragraph. Those who commit the acts specified in the preceding paragraph with personal property for private consumption may apply to the enforcement court. If the enforcement court's review is true, it shall be granted." Restricting high consumption and untrustworthy persons subject to enforcement are two different concepts, which are stipulated in the "Regulations on Restricting High Consumption" and "Several Provisions of the Supreme People's Court on Publishing the List of Untrustworthy Persons Subject to Enforcement" (hereinafter referred to as the "Regulations on Untrustworthy Persons Subject to Enforcement" "). Specific consumption restrictions include not taking planes, soft sleepers on trains, and second-class or above on ships; not spending in hotels, hotels, nightclubs, golf courses and other places above the star level; not purchasing vehicles that are not necessary for business operations; not traveling or vacations; not investing abroad; children are not allowed to attend high-fee private schools, etc. Generally speaking, after a company is included in the list of untrustworthy persons subject to enforcement and has been taken measures to restrict consumption, its legal representative, main person in charge, person directly responsible for affecting debt performance, and actual controller (hereinafter collectively referred to as corporate affiliates) may All can be taken by the court to restrict high consumption. Article 19 of China's Enterprise Bankruptcy Law stipulates that "after the people's court accepts the bankruptcy application, the preservation measures relating to the debtor's property shall be lifted and the enforcement procedure shall be suspended." However, the law does not clearly stipulate that when an enterprise enters bankruptcy proceedings, the related personnel of the enterprise can lift the measures to restrict high consumption. In practice, the related personnel of the enterprise usually apply for the lifting of the measures on their own or the administrator applies for the lifting of the measures to be dealt with by the people's court. However, there is no uniform mode of operation in local courts, such as most cases in the company is declared bankrupt, even after the end of the bankruptcy proceedings to lift the high limit measures, a few cases in the bankruptcy application stage can be lifted by the court support. 2. the difference between the two opinions (I) objection: If a company enters bankruptcy proceedings but has not yet declared bankruptcy (or if the reorganization plan has not yet been approved), the law shall not be lifted. 1. Main reasons and basis The courts that hold this opinion mostly believe that according to the provisions of the Supreme People's Court on the publication of the information on the list of untrustworthy persons subject to enforcement (hereinafter referred to as the "provisions on untrustworthy persons subject to enforcement"), after the person subject to enforcement is taken to limit the height, the height limit can only be lifted under three circumstances: that is, the person subject to enforcement provides a guarantee, the person applying for enforcement consent or the performance is completed. If the person being executed is only in insolvency proceedings, it is not yet a statutory cause for which a consumption restriction order should be lifted. Furthermore, it is believed that the original intention of Article 19 of the Enterprise Bankruptcy Law is that after the bankruptcy court accepts the enterprise bankruptcy case, the enforcement court should suspend the civil enforcement procedure against the debtor's property, so that the bankruptcy court can conduct unified management of all the debtor's property., Change the price and distribution, so as to ensure that all creditors are paid equally and fairly. Therefore, the content of the stay of execution should refer only to the seizure, seizure, freezing, realization and return of the debtor's property, and does not include other indirect enforcement measures of a non-property nature of the debtor (e. g. restrictions on consumption, restrictions on exit, etc.). According to the Supreme People's Court on the application<中华人民共和国民事诉讼法>Article 513 of the Interpretation stipulates that "if the people's court in the place where the person subject to execution is domicile decides to accept the bankruptcy case, the enforcement court shall lift the preservation measures for the property of the person subject to execution. If the people's court in the place where the person subject to execution is domicile decides to declare the person subject to execution bankrupt, the enforcement court shall decide to terminate the execution of the person subject to execution. If the people's court in the place where the person subject to execution is domicile does not accept the bankruptcy case, the execution." The above provision is conditional on the decision to declare bankruptcy, as there is still the possibility of exiting the insolvency proceedings before the debtor is declared bankrupt. When the court makes a ruling declaring the bankruptcy of the executed enterprise, the enforcement court shall order the termination of the execution of the executed person. Upon termination of enforcement, all enforcement measures taken, including the consumption restriction order, shall be lifted. 2. Case Reference (1)(2021) Shanghai 0105 Zhihui No. 548: An Hongsong and Beijing Colas Chemical Technology Co., Ltd. Execution Ruling Letter for Disputes over Sales Contracts The purpose of the decision: This court believes that if the person subject to execution is declared bankrupt by the people's court of his domicile, the court shall rule to terminate the execution of the person subject to execution. The application of the bankruptcy administrator of the current executor is in accordance with the law, so the execution procedure in this case should be terminated. (2)(2019) Zhejiang No. 10 Zhifu No. 12: Zhejiang Mintai Commercial Bank Co., Ltd. Wenling Zeguo Sub-branch and Yangzhou Huidu Home Textile Co., Ltd. Other Cases Execution Review Execution Ruling Summary of the decision: The Court believes that, first of all, ...... if the executed enterprise only enters into bankruptcy proceedings, it does not yet belong to the statutory cause of the order of restriction of consumption should be lifted. Secondly, ...... The above-mentioned provisions are conditional on the decision to declare bankruptcy, because after the bankruptcy court accepts the bankruptcy application and before the declaration of bankruptcy, the debtor's enterprise as the executed person may still withdraw from the bankruptcy proceedings, and once the bankruptcy proceedings are withdrawn, the execution proceedings against the executed person may resume. Therefore, what should be lifted at this time is the preservation measures of the property of the executed person so that the bankruptcy proceedings can proceed normally, and the restriction of consumption measures that do not affect the normal conduct of the bankruptcy proceedings are not necessarily also lifted. Upon termination of enforcement, all enforcement measures taken, including the consumption restriction order, shall be lifted. Finally, in this case, according to the facts ascertained, the enforcement court had ruled to terminate the enforcement proceedings before the executor Huidu Company entered the bankruptcy proceedings, and the creditor's rights of the executor had not yet been realized, and the executor Huidu Company had not been ruled bankrupt. Therefore, there is no conflict between the bankruptcy liquidation procedure and the enforcement procedure as claimed by the applicant for reconsideration, and there is no legal basis for the termination of the execution of the executed person. There is no basis for the applicant for reconsideration to request the lifting of the consumption restriction order on the grounds that the executed person Huidu Company has entered bankruptcy proceedings and the applicant has also declared bankruptcy claims. (3)(2018) Ji 06 Zhiyi No. 158: An Hongsong and Beijing Kolas Chemical Technology Co., Ltd. Execution Ruling Letter of Implementation Review for Disputes over Sales Contracts Summary of Judgment: The Court believes that, although the Court ruled to accept the bankruptcy case of Baoding Tianwei Wind Power Blade Co., Ltd., it has not yet made a ruling on whether to pass the reorganization draft, nor does it have the conditions to lift the restriction on consumption order. (4)(2018) Zhejiang 0903 Executive No. 896 and 898: Zhang Xuefen and Li Zhikang Request to Confirm the Effectiveness of the People's Mediation Agreement Implementation Class Implementation Decision The main purpose of the decision: The person subject to execution has been declared bankrupt and the court has ruled that the case should be terminated. According to the Supreme People's Court<关于限制被执行人高消费及有关消费的若干规定>According to the provisions of Article 9, the decision is as follows: to lift the restrictions on the consumption behavior of Zhoushan Haiyu Aquatic Food Co., Ltd. The (II) agreed that after the court has made a ruling on the acceptance of the bankruptcy application, it may lift the consumption restriction measures against the executed person. 1. Main reasons and basis The courts that hold this opinion mostly believe that under the normal operation of the company, the legal representative and senior management decide the daily operation of the company and grasp the assets and liabilities of the company, which can have a greater impact on the specific implementation. The purpose of the height limit is to prevent it from using unit property consumption in the name of an individual, or to use personal property consumption first and then reimburse public funds to circumvent the prohibitive provisions of the judicial interpretation. After entering the bankruptcy proceedings, the debtor's property is taken over by the administrator, the enterprise's related personnel lose control of the enterprise, there is no possibility of abusing the company's property for high consumption, and then take measures to restrict consumption has no sense of supervision and implementation; in addition, this is also in line with the spirit of the document of the Supreme People's Court on further strengthening the concept of good faith civilization implementation in the implementation work (hereinafter referred to as the "good faith implementation opinions") for implementing the concept of good faith civilization implementation and avoiding excessive implementation. 2. Case and Document Reference (1)(2022) Lu 11 Zhifu No. 19: Zhang Kai, Rizhao Baojing Automobile Sales Service Co., Ltd. Other Cases Execution Review Execution Ruling Summary of the judgment: The court believes that the executed person Rizhao Baojing Automobile Sales Service Co., Ltd. failed to perform the payment obligations determined by the effective legal documents within the period specified in the execution notice. The court took measures to restrict high consumption of the executed person in accordance with the law. As the main person in charge of the executed person's company, the court is in accordance with Article 1 of the "Several Provisions of the Supreme People's Court on Restricting High Consumption and Related Consumption of the Executed Person, it is not inappropriate to impose a height limit on it. If a citizen, legal person or other organization believes that he has been wrongly restricted in consumption, he may apply to the enforcement court for correction. If the original legal representative or the main person in charge applies for the lifting of the restriction on consumption measures against him, he shall provide evidence to prove that he is not the actual controller of the unit and the person directly responsible for the performance of the debt. In this case, the objector has submitted to the court evidence that he no longer holds the post of supervisor and manager of the company subject to execution and has terminated the labor contract relationship with the person subject to execution. At present, the person subject to execution has entered into the substantive merger and reorganization procedure. Even if the objector is still the main person in charge of the enterprise, because the person subject to execution enters the merger and reorganization procedure, it has lost the effect of forcing the person subject to perform the debt by restricting high consumption, starting from the concept of good faith and civilized execution, the restriction on consumption of dissidents should be lifted in accordance with the law. (2)(2021) Hunan 0822 Executive Supervisor No. 2: Hunan Linli Rural Commercial Bank Co., Ltd., Zhangjiajie Jinhao Hotel Investment Co., Ltd. and other loan contract disputes, supervision and execution decisions The main purpose of the judgment: the applicant, Hunan Linli Rural Commercial Bank Co., Ltd., and the executed Zhangjiajie Jinhao Hotel Investment Co., Ltd. and Jinhao Property Management Co., Ltd. issued a consumption restriction order against the executed Zhang Shuguang and Zhou Changshan on July 23, 2018. On June 22, 2021, the Sangzhi County Procuratorate issued the Sang Jian Min Zhi Jian [2021] No. 43082200004 Procuratorial Recommendation, recommending that the Sangzhi County People's Court lift the consumption restriction order against Zhou Changshan and Zhang Shuguang in accordance with the law. The Court held that the court had accepted the bankruptcy liquidation of Zhangjiajie Jinhao Hotel Investment Co., Ltd. and terminated the execution. Judging from the liquidation of the bankruptcy property by the court, the creditor's rights of 5 million yuan of Hunan Linli Rural Commercial Bank Co., Ltd. of the application executor were guaranteed with priority. From the concept of good faith execution, the restrictions on consumption taken by Zhou Changshan and Zhang Shuguang should be temporarily lifted. (3)(2019) Yue 01 Zhi Fu No. 247: Zhang Weimin, Qingyuan Huatai Construction Engineering Co., Ltd. and Guangzhou Suijing Real Estate Development Co., Ltd. Other Cases Subject to Execution Review The purpose of the decision: the purpose of the consumption restriction measures is to urge and punish the executed person to seriously implement and solve the problem of debt settlement. However, after the executed person entered the liquidation procedure, the external repayment affairs of the executed person Sui Jing Company were taken over by the liquidation team of Sui Jing Company in accordance with the law, and Sui Jing Company was no longer able to individually repay the executor of this case, and its legal representative also lost The right to urge the company to perform its obligations has no effect on its legal representative to restrict consumption. At the same time, according to the materials submitted by Zhang Weimin, the applicant for reconsideration, he had already resigned as the legal representative of Suijing Company and was approved by the shareholders' meeting of Suijing Company. It was only due to various factors that he did not change his registration in the industrial and commercial department, and he was not the actual controller of Suijing Company. Therefore, the re-implementation of consumption restrictions on Zhang Weimin, the nominal legal representative of Suijing Company, has lost its practical significance and should be lifted. (4) "Answers to Several Questions of the Guangdong Provincial Higher People's Court on Restricting Consumption and Inclusion in the List of Persons Subject to Enforcement of Dishonesty" (April 2020) Twenty-four, Q: After the executed person enters the bankruptcy proceedings, should the people's court lift the restrictions on consumption? A: Before the people's court makes a ruling on the acceptance of the bankruptcy application, it is not necessary to lift the consumption restriction measures against the person subject to execution; after making the ruling on the acceptance of the bankruptcy application, the consumption restriction measures against the person subject to execution shall be lifted. Feasibility analysis of the lifting of the high limit measures after the acceptance of the 3. bankruptcy petition. The author tends to think that the restriction of consumption is also an enforcement act in the enforcement procedure, which should be suspended in accordance with the law after the executed person enters the bankruptcy procedure. Therefore, after the enterprise enters the bankruptcy proceedings, the consumption restriction order imposed on the related personnel of the enterprise because of the debtor's breach of trust should be lifted. The reasons are as follows: First of all, in accordance with the principle of "lifting weights with lightness", the measures to restrict high consumption should be lifted with reference to the provisions on the list of dishonesty. Article 10, paragraph 1, of the provisions on the list of untrustworthy persons stipulates: "under any of the following circumstances, the people's court shall delete the untrustworthy information within three working days: (5) due to trial supervision or bankruptcy proceedings, the people's court shall, in accordance with the law, rule to suspend the execution of the person subject to breach of trust." According to this article, after the court decides to accept the bankruptcy application, the untrustworthy person may apply for deletion of the untrustworthy information accordingly. However, the scope of sanctions and deterrence of the dishonest list are significantly higher than the measures to restrict high consumption. According to the legal principle of "lifting weights to lighten the weight", after the court accepts the bankruptcy application, it should refer to the "Regulations on the list of dishonest" to lift the high limit measures for related personnel of enterprises. Secondly, from the legislative purpose, the restriction of consumption of enterprise related personnel is not a disciplinary measure for enterprise related personnel, but only to prevent enterprise property from being squandered and transferred by operators, thus increasing the difficulty of implementation in place. Once an enterprise enters into bankruptcy proceedings, the administrator will fully take over the enterprise's property and business matters, and accept the supervision of the people's court and creditors, effectively manage the enterprise's property, there is no possibility of abusing the company's property for high consumption, and then restrict its personal private consumption has no legal significance. Moreover, Article 3, paragraph 2, of the "Regulations on Restricting Consumption" and Article 17, paragraph 1, item 1, of the "Opinions on the Implementation of Good Faith Civilization" both stipulate that the private consumption of high-level personnel associated with enterprises is not within the scope of restriction. Third, the lifting of the restrictions on high consumption by the enterprise's affiliates after the bankruptcy petition is accepted will not harm the interests of creditors.</关于限制被执行人高消费及有关消费的若干规定></中华人民共和国民事诉讼法>

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