DeHeng Advised Henan Hailin Real Estate Co., Ltd.
on Reconciliation with Creditors
2020-10-27
Recently, Zhoukou Intermediate People's Court issued a civil ruling to approve Henan Hailin Real Estate Co., Ltd.'s reconciliation agreement and terminate its reconciliation process. After more than two years of hard work, the reconciliation gave Hailin's bankruptcy liquidation case another chance.
On June 25, 2018, Zhoukou Intermediate Court ruled to accept the bankruptcy liquidation application filed by creditors against Hailin. On the same day, the Court appointed DeHeng's Zhengzhou Office and Henan Tuanjie Law Firm as joint administrators of the case.
Despite all the difficulties, the administrators did not hold back. Under the supervision and guidance of Zhoukou Intermediate Court, the administrators explained with great patience and in detail the bankruptcy procedures and rights protection to parties involved, inquired about the case from multiple sources, and made substantial progress in the bankruptcy work. The turning point appeared in October 2019 when some shareholders of Hailin began to talk to the administrators. After rounds of negotiation and communication, in early 2020, the administrators made the preliminary decision to shift bankruptcy liquidation procedures to reconciliation procedures. Later, they submitted to Zhoukou Intermediate Court a detailed report on the liquidation-to-reconciliation transition.
With the strong support of the Court, the administrators helped the debtor Hailin draft a specific reconciliation agreement, and convened the second creditors' meeting on October 16, 2020, which voted to pass the draft agreement. In the future, the administrators will actively assist Hailin to carry out various operational activities such as project renewal, project development, and property conditions improvement to ensure the normal and smooth implementation of the agreement.
As the co-administrator, the DeHeng team, led by partner Liu Tao, participated in the whole process from liquidation to reconciliation agreement approval, terminated the bankruptcy procedures, and supervised the agreement implementation, provided the client with professional, efficient, and high-quality legal services, and delivered win-win results for the debtor, creditors and other stakeholders. The bankruptcy of real estate companies requires special, delicate handling. It's not only because such cases often involve multiple stakeholders, but also because once the company declares bankruptcy, its credit, brand value and other resources cannot be restored, which is undoubtedly a major loss to the company and even the society. Therefore, in this case, a priority for the administrators was to put existing projects into active use, enable the company to participate in market competition again, and leverage its market value while protecting the lawful rights of all creditors as much as possible.
