[Case Summary]This case involves an objection to the application for enterprise bankruptcy (non-litigation). YY Shopping Plaza Co., Ltd. applied for bankruptcy liquidation in May 2024. However, it had signed a "Market Cultivation Agreement" with 116 owners but failed to fulfill its obligations for a long time, which may make it difficult for owners to recover their debts. The owners have entrusted Beijing Henglu Law Firm to handle the case on their behalf.Liu DonghuaAttorney,Nan HuiThe lawyer intervened and reviewed the "Special Audit Report" and the "Asset Evaluation Consultation Report", finding that the authenticity of the huge accounts payable was questionable, the whereabouts of the assets were unclear, and the evaluation was too low. The lawyer submitted multiple written opinions pointing out the inaccuracies of the audit and evaluation. On December 11, 2025, the Hebei PQ City Court ruled to reject the bankruptcy application, determining that it did not meet the bankruptcy conditions set forth in Article 2 of the Enterprise Bankruptcy Law. The core dispute is whether the company "is unable to pay off its due debts and its assets are insufficient to pay off the debts or obviously lack the ability to pay off the debts". The applicable legal provision is Article 2 of the Enterprise Bankruptcy Law.

I. Review of the case

When a developer files for bankruptcy, what should owners do about their creditor's rights? This is a key concern for multiple stakeholders' creditor's rights risks. In May 2024, YY Shopping Plaza Co., Ltd. applied to the court for bankruptcy liquidation. Prior to this, the company signed the "YY International Plaza Market Cultivation Agreement" with 116 owners, but failed to fulfill its obligations for a long time, seriously damaging the owners' rights and interests. If the bankruptcy is approved, it will be difficult for owners to realize their creditor's rights. The owners have entrusted our firm's lawyers to handle the case.Liu DonghuaAndNan HuiThe intervention aims to prevent improper bankruptcy proceedings and maintain the right of recourse. The lawyer conducted an in-depth analysis of the financial situation and found that there were issues with the authenticity of the huge accounts payable submitted by the administrator, the unclear whereabouts of the assets, and the low valuation of the assets.

II. The focus of the case

  • Focus 1: Does the company truly meet the conditions for bankruptcy?Is it "being unable to pay off due debts and having insufficient assets to settle all debts or clearly lacking the ability to pay off debts"?
  • Focus II: Whether the audit and evaluation reports are inaccurate.Is the authenticity of the huge accounts payable, the whereabouts of the assets, and the valuation of the assets reflecting the true assets and liabilities?
  • Focus Three: Whether the bankruptcy proceedings should be initiated.When the assets have not been identified and may be hidden or disposed of, do they meet the statutory conditions for initiation of the investigation?

III. Professional intervention by Hengluo Lawyers

Applicant (debtor) position:YY Shopping Plaza Co., Ltd. voluntarily applied for bankruptcy liquidation, claiming that it meets the conditions for bankruptcy.

The owner's (the party with objections) position:It is believed that the company created the illusion of "insolvency" through false reports, harming the creditor's rights of 116 owners. It is requested to prevent the bankruptcy and investigate the assets.

Hengluo Lawyer's Agency Opinion:After accepting the commission, the lawyer quickly got to work: he conducted an in-depth analysis of the financial situation, submitted written opinions to the administrator and the court pointing out that the audit and evaluation were seriously inaccurate and failed to truly reflect the assets and liabilities; put forward key procedural suggestions, and submitted the "Opinions and Suggestions on the Audit and Asset Evaluation Report of YY Property", "Opinions and Suggestions on Strengthening the Investigation of YY Property", and the "Letter Urging the Administrator to Apply for a Review", demanding that the audit assets be re-cleared, the clues of illegal transfer be traced, and the acts harming creditors be revoked; focused on the core legal arguments, emphasizing that if the assets were not legally investigated, and there was a possibility of concealment or improper disposal, the statutory conditions for initiating bankruptcy liquidation would not be met. The core of the work was to expose the illusion of "insolvency".

  • Review the audit report and the evaluation report, and point out that there are doubts about the authenticity of the accounts payable
  • Submit multiple opinions and applications, requesting a re-audit and an investigation into the assets
  • The argument that the assets have not been settled and therefore do not meet the statutory conditions for bankruptcy, thereby preventing the initiation of the bankruptcy proceedings

IV. Outcome of the case

On December 11, 2025, the People's Court of PQ City, Hebei Province, issued Civil Ruling No. He ZZ (2024), ruling to reject the bankruptcy application of YY Shopping Plaza Co., Ltd. The court determined that the company did not meet the bankruptcy conditions stipulated in Article 2 of the Enterprise Bankruptcy Law of the People's Republic of China, namely "being unable to pay off due debts and having assets insufficient to pay off all debts or obviously lacking the ability to pay off debts". This move directly prevented the initiation of bankruptcy proceedings, cleared obstacles for the true liquidation of the company's assets and liabilities, and preserved key legal channels and property clues for 116 owners to pursue their claims through litigation and enforcement in the future.

5. Hengluo Law Firm's Reminder

This case is handled by Beijing Henglu Law Firm.Liu DonghuaAttorney (Practice Certificate No.: 11101199911363364, subject to the certificate issued by the judicial administrative organ);Nan HuiAttorney (Practice Certificate No.: 11101202310719853, subject to the document issued by the judicial administrative organ): Agent. Attorney's Reminder: When the debtor voluntarily applies for bankruptcy, the creditor should actively exercise the right of supervision and objection, and professionally and meticulously review the major defects of the audit and evaluation reports, which can effectively influence the court's judgment on the conditions of bankruptcy and avoid the abuse of the procedure. In bankruptcy cases involving many creditors, the creditors should take the initiative to participate in every link with the help of professional legal forces to safeguard the opportunity of fair compensation.

VI. Common Questions and Answers about Enterprise Bankruptcy Objection Cases

  1. Q: If the developer files for bankruptcy, what should the owners do about their creditor's rights?
    A:The owners may exercise their right of objection, review the defects of the bankruptcy materials, prevent improper bankruptcies, and reserve channels for litigation and enforcement. In this case, the rights and interests of 116 owners were protected.
  2. Q: What constitutes meeting the conditions for bankruptcy?
    A:It must be "unable to pay off due debts and having insufficient assets to pay off debts or obviously lacking the ability to pay off debts", as clearly stipulated in Article 2 of the Enterprise Bankruptcy Law.
  3. Q: Can a false audit report overturn a bankruptcy case?
    A:Yes. Pointing out major flaws such as inaccurate accounts payable and underestimated valuations can prove that the company does not meet the bankruptcy conditions, and the case was dismissed on this basis.
  4. Q: What's the point of having a bankruptcy application rejected?
    A:It directly prevents the program from being launched, allowing creditors to identify assets and preserve legal channels and property clues for subsequent recourse.
  5. Q: How can numerous creditors collectively protect their rights and interests?
    A:Nominate representatives, entrust professional lawyers to review the materials, submit objections and supervision applications, and actively participate in all aspects of the bankruptcy process.