Chapter VI
RESTORATION PROCEDURES, LIQUIDATION PROCEDURES
Section 1. BUSINESS OPERATION RESTORATION PROCEDURES
Article 68.- Conditions for application of business operation restoration procedures
1. The judges shall issue decisions to apply the business operation restoration procedures after the first conferences of creditors adopt resolutions approving solutions to reorganize business operations, plans on repayment of debts to creditors and request the enterprises or cooperatives to work out plans on business operation restoration.
2. Within thirty days as from the date the first conferences of creditors adopt the resolutions, the enterprises or cooperatives which fall into the state of bankruptcy must work out plans to restore their business operations and submit them to the courts; if deeming it necessary to have more time therefor, they must send their written requests to the judges for extension. The extension duration shall not exceed thirty days.
Within the above-said time limit, any creditors or persons who undertake the task of restoring the business operations of the enterprises or cooperatives shall all have the right to draft plans on business operation restoration for the enterprises or cooperatives and submit them to the courts.
Article 69.- Contents of plans on business operation restoration
1. Plans on restoration of business operations of enterprises or cooperatives which fall into the state of bankruptcy must clearly state the necessary measures to restore business operations; conditions; time and plans for debt repayment.
2. The necessary measures to restore business operations shall include:
a) Mobilizing new capital;
b) Changing goods of production and/business;
c) Renewing production technologies;
d) Reorganizing the managerial apparatus; merging or dividing production sections in order to raise productivity and production quality;
e) Reselling shares to creditors;
f) Selling or leasing unnecessary properties;
g) Other measures not contrary to law.
3. Before commencing or at the creditors’ conferences, the business operation restoration plans can be amended and/or supplemented under agreement among the parties.
Article 70.- Considering business operation restoration plans before they are presented at creditors’ conferences
Within fifteen days as from the date of receiving the business operation restoration plans, the judges must consider them in order to make one of the following decisions:
1. To present the plans at creditors’ conferences for consideration and decision;
2. To request the amendment and/or supplementation of the business operation restoration plans if deeming that such plans fail to ensure the contents prescribed in Article 69 of this Law.
Article 71.- Consideration and adoption of plans on business operation restoration
1. Within ten days as from the date of deciding to present the plans on restoration of business operation of the enterprises or cooperatives which fall into the state of bankruptcy before creditors’ conferences, the judges must convene the creditors’ conference to consider and adopt the restoration plans.
2. The conferences consider and discuss the business operation restoration plans.
The resolutions on plans for restoration of business operations of enterprises or cooperatives shall be adopted when they are voted for by more than half of the present unguaranteed creditors representing two-thirds or more of the total unsecured debts.
Article 72.- Recognition of resolutions on business operation restoration plans
1. The judges shall issue decisions to recognize the creditors’ conferences’ resolutions on plans for restoration of business operations of the enterprises or cooperatives which fall into the state of bankruptcy. These resolutions are binding on all parties concerned.
2. The courts must send the decisions to recognize the creditors’ conference’s resolutions on business operation restoration plans to the enterprises or cooperatives which fall into the state of bankruptcy and the creditors within seven days as from the date of issuing the decisions.
Article 73.- Supervising the implementation of business operation restoration plans
1. After the judges issue decisions to recognize the creditors’ conferences’ resolutions on plans for restoration of business operations of the enterprises or cooperatives which fall into the state of bankruptcy, the property-managing and-liquidating teams shall dissolve.
2. Once every six months, enterprises and cooperatives must send to the courts their reports on the implementation of business operation restoration plans.
3. The creditors are obliged to supervise the implementation of plans on restoration of business operations of the enterprises or cooperatives.
Article 74.- Time limit for implementation of plans on business operation restoration
The maximum time limit for implementation of a plan on restoration of business operation of an enterprise or cooperative falling into the state of bankruptcy is three years as from the last day of publishing in newspapers the court’s decision to recognize the creditors’ conference’s resolution on plan for restoration of business operation of the enterprise or cooperative.
Article 75.- Amending, supplementing plans on business operation restoration
1. In the course of implementing business operation restoration plans, creditors and enterprises or cooperatives shall have the right to reach agreements on amendment and/or supplementation of business operation restoration plans.
2. The agreement on amendment and/or supplementation of plans for restoration of business operations of enterprises or cooperatives shall be approved when it is reached by more than half of the number of unguaranteed creditors representing two-thirds or more of the total unsecured debts.
3. The judges shall issue decisions to recognize the agreement between the parties and send such decisions to the enterprises or cooperatives which fall into the state of bankruptcy as well as creditors within seven days as from the date of issuing the decisions.
Article 76.- Suspension of business operation restoration procedures
1. The judges shall issue decisions to suspend the procedures for restoration of business operations of the enterprises or cooperatives which fall into the state of bankruptcy in one of the following cases:
a) The enterprises or cooperatives have fulfilled the plans on business operation restoration;
b) It is so agreed upon through voting by more than half of the unguaranteed creditors representing two-thirds or more of the total outstanding unsecured debts.
2. The courts must send and publicize the decisions to suspend the procedures for restoration of business operation of enterprises or cooperatives as provided for in Article 29 of this Law.
Article 77.- Legal consequences of the suspension of business operation restoration procedures
1. When the judges issue decisions to suspend the procedures for restoration of business operation of the enterprises or cooperatives which fall into the state of bankruptcy, such enterprises or cooperatives shall be regarded as no longer falling into the state of bankruptcy.
2. Where the civil judgment execution or case settlement is suspended under the provisions in Article 57 of this Law, immediately after the issuance of the decisions to suspend the procedures for restoration of business operations of the enterprises or cooperatives which fall into the state of bankruptcy, the civil judgment execution or the case settlement shall resume. The courts which issue decisions to suspend the restoration procedures must return the case dossiers to the competent courts for settlement of cases according to law provisions.
Section 2. PROPERTY LIQUIDATION PROCEDURES
Article 78.- Decision to open property liquidation procedures in special cases
Where enterprises which have conducted business operation at a loss, have enjoyed special measures applied by the State to restore their business operation but still cannot restore their business operation and cannot repay their due debts at the creditors’ requests, the courts shall issue decisions to open the procedures for liquidation of the enterprises’ properties without having to convene the creditors’ conferences to consider the application of restoration procedures.
Article 79.- Decision to open property liquidation procedures when the creditors’ conferences fail
The judges shall issue decisions to open property liquidation procedures when the creditors’ conferences fail in the following cases:
1. Where the owners of enterprises or lawful representatives of enterprises or cooperatives fail to participate in the creditors’ conferences without plausible reasons or where after the creditors’ conferences are postponed once and the applicants for opening of the property liquidation procedures fall into the cases prescribed in Articles 13 and 14 of this Law;
2. Where there are not enough creditors defined in Clause 1, Article 65 of this Law to participate in the creditors’ conferences after the creditors’ conferences were postponed once if the applicants for opening of the bankruptcy procedures fall into the cases prescribed in Articles 15, 16, 17 and 18 of this Law.
Article 80.- Decision to open the property liquidation procedures after the adoption of the resolutions of the first conferences of creditors
After the first conference of creditors adopts the resolution agreeing with the proposed solutions to reorganize business operation, plans on debt repayment to creditors and requests the enterprises or cooperatives to work out plans to restore their business operation, the courts shall decide to open procedures for liquidation of properties of the enterprises or cooperatives in one of the following cases:
1. The enterprises or cooperatives cannot draw up plans for business operation restoration within the time limit prescribed in Clause 1, Article 68 of this Law;
2. The creditors’ conferences fail to adopt plans on restoration of business operation of enterprises or cooperatives;
3. The enterprises or cooperatives have implemented improperly or fail to implement the business operation restoration plans, except otherwise agreed upon by the involved parties.
Article 81.- Contents of decisions on opening of property liquidation procedures
1. The decision to open the property liquidation procedures prescribed in Articles 78, 79 and 80 of this Law must contain the following principal contents:
a) The day, month, year of issuing the decision;
b) The name of the court, the full name of the judge in charge of carrying out the bankruptcy procedures;
c) The name and address of the enterprise or cooperative subject to the application of property liquidation procedures;
d) The grounds of application of property liquidation procedures;
e) The plan on division of the properties of the enterprise or cooperative according to the principles prescribed in Article 37 of this Law;
f) The right to complain and protest and the time limit for lodging complaints and protests.
2. The decisions on opening of procedures for liquidation of the properties of enterprises or cooperatives which fall into the state of bankruptcy must be dispatched and publicized by courts according to the provisions in Article 29 of this Law.
Article 82.- Activities of enterprises, cooperatives in the course of property liquidation
In the course of executing decisions on opening of property liquidation procedures, at the proposals of the property-managing and-liquidating teams, the judges may issue decisions permitting the enterprises or cooperatives to conduct a number of activities necessary for the property liquidation or for the increase of the properties of such enterprises or cooperatives.
Article 83.- Complaints about, protests against, decisions on opening of property liquidation procedures
1. The enterprises and cooperatives which fall into the state of bankruptcy and creditors may complain about, and the people’s procuracies of the same level may protest against, decisions on opening of property liquidation procedures.
2. Persons owing debts to enterprises or cooperatives may complain about the sections of decisions on opening procedures for liquidation of the properties of the enterprises or cooperatives, which are related to their respective debt repayment obligations.
3. The time limit for lodging complaints or protests shall be twenty days counting from the last day of publishing the decisions on opening of property liquidation procedures in newspapers.
Within five days as from the date the time limit for lodging complaints or protests expires, the courts which have issued decisions on opening of procedures for liquidation of properties of enterprises or cooperatives must send the bankruptcy dossiers enclosed with the written complaints, protest decisions to the immediate superior courts for considering and settling the complaints about, or protests against, decisions on opening of property liquidation procedures.
Article 84.- Settlement of complaints about, protests against, decisions on opening of property liquidation procedures
1. Immediately after receiving the bankruptcy dossiers enclosed with the written complaints or protest decisions, the chief judges of the immediate superior courts shall each appoint a three judge- team to consider and settle the complaints about, or protests against, decisions on opening of property liquidation procedures.
2. Within sixty days as from the date of receiving the bankruptcy dossiers, the judges’ teams must consider and settle complaints about, or protests against, decisions on opening of property liquidation procedures. The judges’ teams may issue one of the following decisions:
a) To reject the complaints or protests and retain the subordinate court’s decisions on opening of property liquidation procedures;
b) To amend the subordinate court’s decisions on opening of property liquidation procedures;
c) To cancel the subordinate court’s decisions on opening of property liquidation procedures and hand the bankruptcy dossiers to the subordinate court for continuing with the restoration procedures as provided for by this Law.
3. The immediate superior courts’ decisions on settlement of complaints or protests shall be the final ones and take legal effect after the issuance thereof.
Article 85.- Suspension of property liquidation procedures
The judges shall issue decisions to suspend the property liquidation procedures in the following cases:
1. The enterprises or cooperatives no longer have properties for implementation of the property division plans;
2. The property division plans have been fulfilled.
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