24 ASIAN LEGAL BUSINESS CHINA • 亚洲法律杂志-中国版 MARCH 2024 last year, including the restructuring of listed companies, real estate bailouts, administrator system reform, crossborder restructuring, and modifications to China’s bankruptcy law and restructuring system. Lawyers are particularly focused on the role of administrators. A recent article on the People’s Forum website highlighted the importance of reforming the administrator system to enhance the insolvency and restructuring mechanism. It emphasized how such reform could aid distressed companies in recovery, stabilize the market system, protect social and public interests, and foster a more favorable business environment. In insolvency and restructuring cases, the administrator tasked with overseeing the debtor’s property and managing bankruptcy affairs holds significant importance. Xu Shengfeng notes that both restructuring settlement and bankruptcy liquidation fall under the Bankruptcy Law’s framework. Thus, administrators should be regulated under unified system guidelines, covering aspects such as recommendation, appointment, and compensation, which currently lack reasonable distinction. “We need to grant creditors and debtors more freedoms and rights, rather than adopting a one-size-fitsall approach. Restructuring is akin to seeking medical treatment. As restructuring lawyers, we must respect the market and the rights of distressed companies to choose their own ‘hospitals’ and ‘doctors’,” Xu states. Additionally, the establishment of an administrator management system and debtor selfmanagement, along with the significant differentiation in administrator compensation, are crucial topics requiring discussion. Xu adds, “The role of administrators is still evolving in China. Many cases involve no assets available for liquidation.” In instances where there aren’t enough assets to settle debts, lawyers must possess sound legal knowledge, effective communication skills, and a strong sense of responsibility to protect the legitimate rights and interests of all parties as much as possible within limited resources. Wang Chunsheng, the inaugural president of the Sichuan Association of Bankruptcy Administrators, concurs with this perspective. He remarks, “This role requires me to truly represent the administrator industry and advocate for practitioners.” Regarding administrator compensation, he is frank: “Currently, instances of high remuneration for administrators in China are rare. Most administrator teams are still in their nascent stages, struggling to meet their basic needs. Thus, we expect the courts to objectively evaluate factors such as case complexity, workload, and performance, and provide fair and reasonable compensation to administrators.” From Xu Yu’s observation, in recent years, the insolvency and restructuring field has gradually spawned many key topics. First, there are a large number of unfinished building nationwide, and the unfinished projects often have huge debts, lack of funds to continue construction, and are frozen by a large number of judicial seizure, which makes it difficult for government-led project relief or enterprise self-help to be successfully promoted. Secondly, due to the wide variety of financial claims and their complex composition, how to fairly dispose of and legally protect financial claims in insolvency proceedings has become a key issue in the study of practical and theoretical circles. Finally, Xu Yu points out that the pre-reorganization system is not a new topic. But due to its high flexibility, the insolvent enterprise itself, creditors, investors, financial institutions and other interested parties can take more ways outside the procedure to communicate with each other on the enterprise’s reorganization plan, so that the prereorganization plan can be more easily accepted by all parties and the success rate of reorganization can be improved effectively. OPPORTUNITIES AND CHALLENGES In the face of the normalization and deepening of corporate restructuring, lawyers are undoubtedly encountering greater challenges while also welcoming opportunities for business growth. The evolving landscape continually demands bankruptcy lawyers to possess increasingly comprehensive professional capabilities. Zhao Jiuguang, a partner at Global Law Office deeply immersed in insolvency and restructuring for over two decades, brings a wealth of business experience from multiple perspectives including creditors, investors, and administrators. Leading the Global insolvency and restructuring department, Zhao actively fosters internal learning within the department on key frontier areas of business development, earning market recognition for his handling of numerous typical cases. According to Zhao, the upward trend of insolvency and restructuring cases in recent years presents both opportunities and challenges for lawyers in this domain. Restructuring lawyers often find themselves under dual pressures, as Zhao bluntly states, “The fundamental value of insolvency and restructuring lies in enabling struggling companies to achieve renewal and rejuvenation. Economic pressures today make restructuring investors more cautious in their investment approach.” Simultaneously, market demands for the capabilities of restructuring lawyers are increasing. “It takes a skilled artisan to forge fine steel,” Zhao suggests. “Restructuring lawyers must enhance their skills and abilities, continually enrich their knowledge, broaden their perspectives, consider the diverse interests of all parties involved in insolvency and restructuring, as well as societal impacts, and design systematic and comprehensive investment paths and plans. Lawyers should also leverage their abilities to integrate relevant social resources, actively facilitating successful restructuring and assisting companies in mitigating risks.” For Wang Chunsheng, managing and building the insolvency and restructuring team poses a significant challenge. “Developing local and regional administrator teams is quite challenging,” Wang remarks. “Late entry into the TOP 15 INSOLVENCY & RESTRUCTURING LAWYERS
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