Enterprise Bankruptcy Law of China Ⅳ

Chapter IV

A Debtor's Property

Article 30 A debtor's property includes all of the property that belongs to a debtor when the application for bankruptcy is accepted, as well as the property as obtained by the debtor during the period from the time when the application for bankruptcy is accepted to the time when the procedures for bankruptcy are concluded.

Article 31 An administrator shall have the right to request the court to nullify any of the following actions taken within one year before the people's court accepts the application for bankruptcy in respect of the debtor's property:

（1） transferring the property gratis;

（2） trading at an obviously unreasonable price;

（3） providing property guaranty to unsecured debts;

（4） paying off debts not due; or

（5） abandoning claims.

Article 32 Within six months before the people's court accepts the application for bankruptcy, if a debtor is under the circumstances as specified in the first paragraph of Article 2 of this Law but chooses to make repayment to individual creditors, the administrator shall have the right to request the people's court to nullify it, except where such individual repayment is beneficial to the debtor's property.

Article 33 The following actions taken in respect of the debtor's property are invalid:

（1） concealing or transferring the property in order to avoid repayment of debts; and

（2） fabricating debts or acknowledging unreal debts.

Article 34 Where the property is obtained from the debtor by means of such actions as specified in Article 31, 32 or 33 of this Law, the administrator shall have the right to recover it.

Article 35 Where after the people's court accepts an application for bankruptcy, any of the debtor's capital contributors that fails to fulfill his obligation of capital contribution in full, the administrator shall require the capital contributor to contribute the capital he has subscribed to, irrespective of the time limit set on capital contribution.

Article 36 The administrator shall recover the irregular incomes obtained from the enterprise and the property of the enterprise illegally taken into his possession by a director, supervisor or senior manger of the debtor through taking advantage of his position.

Article 37 After the people's court accepts an application for bankruptcy, the administrator may take back the pledge or lien through paying off the debts or providing a guaranty acceptable to the creditor.@@page@@

With respect to payment of debts or provision of guaranty as a substitute, as mentioned in the preceding paragraph, if the value of the pledge or lien is lower than the amount of the claim for which the guaranty is provided, the value of the pledge or lien shall be limited to its market value at the time when the pledge or lien was made.

Article 38 After the people's court accepts an application for bankruptcy, the property, which has been taken by a debtor into his possession but which does not belong to the debtor, may be taken back by the obligee of the property through the administrator, unless otherwise provided for by this Law.

Article 39 At the time when the people's court accepts an application for bankruptcy, if the seller has sent the goods to the debtor as the buyer and the latter has neither received the goods nor paid the money in full, the seller may get back the goods in transit. However, the administrator may pay the money in full and request the seller to deliver the goods.

Article 40 Where a creditor is in debt to the debtor before the application for bankruptcy is accepted, the former may lodge a claim with the administrator for offsetting the debts. However, the debts shall not be offset under any of the following circumstances:

（1） being in debt to the debtor, he obtains another person's claims against the debtor after the application for bankruptcy is accepted;

（2） getting into debt to the debtor when he already knows the fact that the debtor is incapable of paying off his debts due or has applied for bankruptcy; unless it is otherwise provided for by law or he gets into debt because of the developments that take place one year before the application for bankruptcy is made; or

（3） being a debtor to the debtor, he obtains the claims from the debtor when he already knows the fact that the debtor is incapable of paying off his debts due or has applied for bankruptcy; unless it is otherwise provided for by law or he obtains the claims because of the developments that take place one year before the application for bankruptcy is made.