Preface

As a production and operation plan in the process of enterprise restructuring, the implementation of the restructuring plan can be affected in practice due to adjustments in national regulations and policies, price adjustments of raw materials or products, breach of contract by the other party, claims, sudden epidemics, force majeure events, etc. For the restructuring plan, it is difficult to strictly follow the plan. To address these influencing factors and restore the execution of the restructuring plan, it is necessary to make necessary adjustments and changes to some of the contents of the restructuring plan.

The "Minutes of the National Bankruptcy Trial Work Conference of Courts" (Law [2018] No. 53) issued by the Supreme People's Court on March 4, 2018, stipulated the relevant matters regarding changes to the reorganization plan, as follows:

1、 Application subject

The applicant for changing the restructuring plan is either the debtor or the administrator.

Article 19 of the Minutes of the National Bankruptcy Trial Work Conference stipulates: "The conditions and procedures for changes in the implementation of the reorganization plan. The debtor shall strictly implement the reorganization plan, but if there are special circumstances such as national policy adjustments or legal modifications that make it impossible to implement the original reorganization plan, the debtor or administrator may apply to change the reorganization plan once. If the creditors' meeting resolution agrees to change the reorganization plan, it shall be submitted to the people's court for approval within ten days from the date of the resolution. If the creditors' meeting resolution does not agree or the people's court does not approve the change application, the people's court administrator or interested party shall request to terminate the execution of the reorganization plan and declare the debtor bankrupt

2、 Application time

The application for change of time should be made before the repayment plan cannot be fulfilled.

Article 93, Paragraph 1 of the Bankruptcy Law:

If the debtor is unable or fails to execute the reorganization plan, the people's court administrator or interested party shall, upon request, rule to terminate the execution of the reorganization plan and declare the debtor bankrupt

Once an administrator or interested party applies to the court and the court rules to terminate the execution of the reorganization plan, the debtor will be declared bankrupt. Therefore, the application for changing the reorganization plan should be made before the administrator or interested parties submit an application to terminate the execution of the reorganization plan due to its inability to be executed.

3、 Application requirements

According to Article 19 of the Minutes of the National Bankruptcy Trial Work Conference, the conditions for changing the reorganization plan include special circumstances such as national policy adjustments and legal modifications.

• National policy adjustment: should include policy documents nationwide and policy documents formulated by local governments applicable to regional scope;
• Legal amendments and changes: shall refer to normative documents such as laws, administrative regulations, local regulations, departmental rules, etc. formulated by the National People's Congress and its Standing Committee;

• Special circumstances: As a fallback condition for changing the restructuring plan, this provision should be more applicable and flexible in judicial practice, including special circumstances such as changes in investors and debt repayment methods.

4、 Change Procedure

Application: The debtor or administrator submits a change application.

Voting at the creditors' meeting: Convene a creditors' meeting to vote on the change application.

Request for court approval: If the creditors' meeting votes to approve the application for change, it shall be submitted to the people's court for approval within 10 days from the date of the resolution.

Propose a new restructuring plan: If the people's court rules to approve the application for change, the debtor or administrator shall submit a new restructuring plan within 6 months.

Group voting: The new restructuring plan shall be submitted to the creditor group and investor group that have been adversely affected by the restructuring plan change for voting. Groups whose interests have not been adversely affected do not need to vote again.

Final approval by the court: The people's court shall review whether to approve the revised restructuring plan based on the application. The procedures for voting, applying for approval from the people's court, and deciding whether to approve are the same as the original restructuring plan.