25 ASIAN LEGAL BUSINESS CHINA • 亚洲法律杂志-中国版 WWW.LEGALBUSINESSONLINE.COM/CHINA years. However, Wang admits that there are indeed concerns accompanying the growth: “Firstly, the insolvency practice requires a high level of professional expertise, and jumping into projects too quickly might be stymied by a lack of adequate expertise. Secondly, this practice necessitates a collaborative team approach, and without a well-established team to undertake these tasks, especially in the role of administrators, it can be challenging to deliver results.” “Finally, the risk associated with this practice is increasing. Any anxiety for success could introduce the risk of improper practice and potential compensation liabilities. Given this, W&H has always placed a strong emphasis on consistency and excellence, ensuring the utmost quality and efficiency in our insolvency practice.” REAL ESTATE AND FINANCE When it comes to the industries that have experienced the highest concentration of insolvency and restructuring cases over the past year, Wang points out: “A distinctive aspect of the insolvency and restructuring practice is its level of high industry concentration. When an industry faces widespread overcapacity and development challenges, a significant number of companies within that industry may undergo insolvency and restructuring. This held for the photovoltaic and steel industries in previous years, and it is currently true for the real estate industry as well.” Furthermore, “another noteworthy aspect of this practice is its contagion effect. The insolvency of downstream industries results in a disruption of cash flow for upstream industries due to insolvency-related debt reduction. This, in turn, compromises their debt repayment capacity, ultimately compelling them to pursue insolvency. This trend is particularly evident in the financial sector,” says Wang. Indeed, the crises of major real estate companies such as Evergrande, Country Garden, and Sunac have garnered significant media attention over the past year. Wang tells ALB that W&H handled several insolvency and restructuring cases for real estate enterprises in 2023, including high-profile projects like Zhongmao City in Changsha, Qilin Bay in Tangshan, Jiuchang Garden in Beijing, and Lehuo Impression Garden in Qujing. “W&H has also served as the advisor for the debtors, largest creditors, and restructuring investors in multiple real estate insolvency cases.” Real estate is also a key focus area for DeHeng. “Our team has assumed the role of administrator for handling the substantive consolidation and restructuring cases across a total of 30 enterprises, including Chongqing’s largest real estate company, Xiexin Real Estate,” says Zhou. “This is the largest insolvency and restructuring case officially accepted by a Chinese court in terms of asset and liability scale, and it carries significant reference value.” Zhuojian Law Firm, headquartered in Shenzhen, has been consistently growing its insolvency and restructuring practice in recent years. It has established the Zhuojian Insolvency Law Research Centre to delve into insolvency law theory and practical applications and has handled dozens of challenging cases, particularly those about the real estate sector in and around Shenzhen. Tang Wen, senior partner at Zhuojian, tells ALB that as the insolvency administrator, Zhuojian has played an instrumental role in handling the restructuring project for Zhuhai Yangming Real Estate Company. “This serves as a noteworthy example of avoiding liquidation of real estate companies through judicial restructuring, successfully reviving commercial shopping mall projects.” Meanwhile, the insolvency cases of certain licensed financial institutions over the past year have also gained significant attention from the market. “The risk management of private conglomerates with financial licenses, encompassing judicial practices associated with administrative takeover, criminal investigation, and insolvency liquidation, deserves close attention.” INSOLVENCY “The Chinese courts and securities regulators are increasingly adopting a more open and supportive stance towards the restructuring of listed companies.” — Zhou Jie, DeHeng Law Offices “中国法院和证券监管机构对 上市公司重整持越来越开放和 支持的态度。” — 周杰，德恒
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