Case playback:

　　In 2001, A limited liability company because of poor management and other reasons a comprehensive business. In 2005 June, A company shares transfer to B, C two. In 2005 September, A company issued an IOU, to all the staff stated: "for the Surety Company after the share transfer, the transfer procedures can be successfully completed, from the consideration of stability, not for the resettlement of workers and liquidation of companies of all, in the procedures for land applications, guarantee in 2006 March for liquidation, now owe the placement and compensation costs 2967200 yuan to pay workers, with the company's existing fixed assets guarantee." As of July 31, 2006, Agricultural Machinery Co., Ltd. the total assets of 4548680.19 yuan, total liabilities 6405501.69 yuan, net assets of -1856821.50 element. Ious called land for the lease of state-owned land. In 2006 June, A company all staff to A company can not pay off the resettlement and compensation for employees, to the people's court for A company bankrupt. A company argued: land transfer formalities have not been completed, the conditions have not yet achievement, firms need not perform the obligations agreed upon. At the same time, the company did not terminate the labor contract with employees, resettlement compensation shall not be filed for bankruptcy claims. The court rejected the bankruptcy application request, the conclusion of the bankruptcy proceedings.

　　Intensive analysis:

　　The enterprise bankruptcy procedure in China began with two steps of bankruptcy and bankruptcy acceptance, respectively, have the following risks:

　　A. bankruptcy risk

　　The main application for bankruptcy in China are mainly the debtor, creditors and liquidation responsibility of the three class, there are some differences between their respective application conditions, materials and procedures. If the subject qualification, application conditions, application materials do not meet the requirements, the court will not be accepted. The company, the enterprise through the hiding property, bearing the fictitious debt or otherwise transfer, disposal of property, the implementation of false bankruptcy, serious damage to the interests of creditors and other people, constitute crime of false bankruptcy.

　　B. The accepts the risk of bankruptcy

　　Since the court accepts the bankruptcy procedures, officially started, the strictly perform their statutory obligations, otherwise will be punished by law:

　　1, the debtor in violation of the provisions, refused to submit to the people's court or submit false property status, a detailed list of debts, a detailed list of claims, the relevant financial and accounting reports, and social insurance payment of wages to pay, the people's court may directly responsible shall be fined;

　　2,The relevant personnel the debtor in violation of the provisions, to leave the place of domicile, the people's court may reprimand, detention, may also impose a fine;

　　3, the people's court accepts the application for bankruptcy, the debtor's individual creditors debt is invalid;

　　4, the people's court accepts the application for bankruptcy, the debtor or the debtor's property holders should be provided to the administrator to pay off the debts or deliver the property. The debtor's debtor or property holder intentionally violates the above provisions to the debtor to pay off the debts or deliver the property, thus causing losses to creditors, are not exempt from the obligation to repay debts or deliver property.

　　In this case, the main focus for the two aspects of subject qualification, the conditions of bankruptcy. China's current bankruptcy law on labor claims can apply for bankruptcy is not prohibited, the workers as the creditor of the enterprise can apply for bankruptcy. A company leasing state-owned land is not the procedures for transferring the IOUs, conditional impossible achievement. While the ious attached period has expired, A company shall perform its obligations to the workers agreed. Although the staff not to terminate the labor contract relationship with A, resettlement compensation money and uncertain, not as bankruptcy claims, but the company owes a worker living expenses for living expenses is determined, the A company can not pay off, the employee has the right to apply for bankruptcy. A company have the corporate conditions, by the administrative department for Industry and Commerce approved according to law, have the status of enterprise legal persons, have the capacity of bankruptcy. By 2006 July, A company is unable to repay debts that are due, in accordance with the conditions of bankruptcy. The court accepted the bankruptcy petition, the stakeholders shall strictly perform their statutory obligations.

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