Enterprise Bankruptcy Law of China Ⅴ

Chapter V 

Expenses for Bankruptcy Proceedings and Debts Incurred for the Common Good of Creditors

Article 41 The following expenses that are entailed after the people's court accepts an application for bankruptcy are expenses for bankruptcy proceedings:

（1） litigation cost involved in a bankruptcy case;

（2） expenses for management, realization and distribution of the debtor's property; and

（3） expenses involved in the administrator's performance of his duties and paid for his remuneration and expenses for the employees recruited.

Article 42 The following debts incurred after the people's court accepts an application for bankruptcy are debts incurred for the common good of creditors:

（1） debts incurred because the administrator or debtor requests the other party to fulfill a contract which both parties have failed to fulfill;

（2） debts to the debtor through spontaneous agency on the debtor's property;

（3） debts incurred as a result of the debtor's unjust enrichment;

（4） remunerations for work and social insurance premiums payable for sustaining the debtor's business operations, and other debts arising therefrom;

（5） debts incurred by the administrator or an employee who causes losses to another person in the course of performing his duties; and

（6） debts incurred by the debtor's property for causing losses to another person.

Article 43 The expenses for bankruptcy proceedings and the debts incurred for the common good of creditors shall be paid off with the debtor's property at any time.

Where the debtor's property is not enough for paying off all the expenses for bankruptcy proceedings and the debts incurred for the common good of creditors, the former shall be paid off first.

Where the debtor's property is not enough for paying off all the expenses for bankruptcy proceedings or the debts incurred for the common good of creditors, such payment shall be made on a pro rata basis.

Where the debtor's property is not enough for paying off the expenses for bankruptcy proceedings, the administrator shall request the people's court to conclude the procedure for bankruptcy. The people's court shall, with 15 days from the date it receives the request, decide to conclude the procedure for bankruptcy and announce the decision. Chapter VI

Declaration of Claims

Article 44 As of the time when the people's court accepts an application for bankruptcy, the creditor that enjoys the claims against the debtor may exercise his right in respect of his claims according to the procedures as prescribed by this Law.@@page@@

Article 45 After accepting an application for bankruptcy, the people's court shall specify the time limit for a creditor to declare claims. Such time limit, calculated from the date when the people's court announces its acceptance of the application for bankruptcy, shall be not less than 30 days at least but not more than three months at the most.

Article 46 All claims undue shall be deemed to be due at the time when the application for bankruptcy is accepted.

Beginning from the time when the application for bankruptcy is accepted, calculation of the interest on claims shall be stopped.

Article 47 A creditor may declare his claims which are attached with certain conditions or time limit and the claims for which an action or arbitration is pending.

Article 48 A creditor shall, within the time limit specified by the people's court for declaration of his claims, declare his claims to the administrator.

It is not necessary for the debtor to declare the wages, subsidies for medical treatment, injuires and disability and the pensions for the disabled and the families of the deceased which he owes, the basic old-age insurance premiums and medical insurance premiums which he owes and fails to enter in the employees' personal accounts, and the compensations which should be paid to the employees as prescribed by relevant laws and administrative regulations, for all of which the administrator shall compile a list after investigation and have it published. Where an employee has objections to what is recorded in the list, he may request the administrator to make corrections; and if the administrator refuses to do so, the employee may file an action with the people's court.

Article 49 When a creditor declares his claims, he shall make a written statement on the amount of his claims and on whether there is any property guaranty, and present the relevant evidence. If the claims declared are joint-and-several claims, he shall give an explanation thereof.

Article 50 Joint-and-several creditors may choose one from among them to declare their claims on their behalf or declare their claims jointly.

Article 51 Where the debtor's guarantor or any joint-and-several debtor has paid off the debts on behalf of the debtor, he may declare his claims on the basis of his right of recourse to the debtor.

Where the debtor's guarantor or any joint-and-several debtor has not paid off the debts on behalf of the debtor, he may declare his claims on the basis of his future right of recourse to the debtor, unless the creditors have declared all their claims to the administrator.

Article 52 Where it is ruled that the procedure as prescribed in this Law should be applicable to more than one joint-and-several debtor, their creditors shall have the right to declare all of their claims in each of the bankruptcy cases.

Article 53 Where an administrator or debtor revokes a contract according to the provisions of this Law, the other party may declare his claims on the basis of his right to compensation for the damages caused by the revocation.@@page@@

Article 54 Where it is ruled that a debtor who is the entrusting party of an entrustment contract should be governed by the procedure as prescribed in this Law and the entrusted party, without knowledge of the fact, continues to deal with the entrusted business, the entrusted party may declare his claims on the basis of the right of claim derived therefrom.

Article 55 Where it is ruled that a debtor being the producer of a negotiable instrument should be governed by the procedures as prescribed in this Law, the payer of the negotiable instrument continues his payment or acceptance, the payer may declare his claims on the basis of the right of claim derived therefrom.

Article 56 Where a creditor fails to declare his claims within the time limit for declaration of claims as specified by the people's court, he may declare such claims afterwards before distribution of the bankruptcy property in the final installment. However, if the property has been distributed earlier, no more distribution shall be made to him. The expenses for examining and confirming the claims declared afterwards shall be borne by the party that makes such declaration.

Where a creditor fails to declare his claims according to the provisions of this Law, he shall not exercise his right according to the procedure as prescribed in this Law.

Article 57 After receiving the materials for declaration of claims, the administrator shall have them registered, examine the claims declared and fill out a form of claims.

The form of claims and the materials for declaration of claims shall be preserved by the administrator for reference by the interested parties.

Article 58 The form of claims as filled out according to the provisions of Article 57 of this Law shall be submitted to the first creditors' meeting for checking.

Where the debtor and creditor have no objections to what is recorded in the form of claims, the people's court shall make a ruling on its confirmation.

Where the debtor or creditor has objections to what is recorded in the form of claims, he may file an action with the people's court that has accepted the application for bankruptcy.