[Direct answer]In the Beijing area, the effectiveness of trust companies' full repayment commitments needs to be judged based on different circumstances. First, for contracts explicitly stipulating guaranteed principal and returns: As licensed financial institutions, trust companies are subject to strict supervision, and asset management products are prohibited from promising guaranteed principal and returns. Therefore, fixed full repayment clauses in contracts violate regulatory requirements and are generally not supported in practice. Second, for temporary commitments made before repayment: If a trust company promises repayment to investors after risk exposure, and investors claim reliance interests based on this, they may be supported under certain conditions, but this requires comprehensive judgment based on the specific content of the commitment, whether it violates regulatory prohibitions, and whether it involves state-owned assets and public interests. Third, for voluntary repayments with actual solvency: If a trust company voluntarily repays and actually fulfills its obligations when it has the ability to dispose of assets, such performance is generally recognized as valid. It should be noted that full repayment commitments often lead to moral hazard and adverse selection problems, so regulatory policies disapprove of trust companies' rigid repayment and back-up repurchase arrangements. The principle of independence of trust property established in the Trust Law of the People's Republic of China (implemented on January 1, 2001) also requires that trust property be distinguished from the trustor's and trustee's own assets. In practice, when facing products with risk exposure, investors should handle the situation through three approaches: verifying the progress of underlying asset disposal, assessing the trustee's repayment ability and liability, and asserting rights through negotiation, mediation, or litigation.Financial capital and cross-border transactions involving foreign countriesThe services in this column can assist in evaluating the path to protecting one's rights.

1. Problem background and typical scenarios

Common claims include: the company promised to guarantee redemption of trust products after the occurrence of redemption risks, but failed to fulfill its commitment; the contract includes a guarantee of principal protection, but the product suffered losses; investors negotiated with the trustee to redeem the products through asset swaps; the underlying assets of trust products were disposed of too slowly; and multiple investors claimed that the trustee failed to exercise due diligence.Business and contract disputes in enterprisesThe analysis of breach of contract liability in the column can be used for reference.

II. Key points of contention

Focus One: Determining the validity of the full repayment clause. Focus Two: Protecting the credible interests of parties based on post-event commitments. Focus Three: Whether the trustee has fulfilled his duty of diligence and responsibility. Focus Four: Supervision rights over the disposal of underlying assets. Focus Five: Rules for sharing losses. Focus Six: Coordinating claims from multiple investors.Special services and other casesThe design description of the scheme in the column can be used for reference. Focus 7: Whether the trustee has an interest conflict with the parties related to the underlying assets, which directly affects the determination of responsibility and the disposal plan.

III. Professional analysis by Henglue Lawyers

Henglue Law Firm typically handles such risk events in four steps. The first step is to conduct a comprehensive investigation: verify the product structure, the investment direction of funds, the ownership and disposal status of underlying assets, the investors' contributions and earnings, and the trustee's past repayment records, in order to distinguish whether the risk is a liquidity issue or a substantial loss of underlying assets. The second step is to determine the claim path: clarify whether to claim contractual guaranteed repayment clauses, assert trust interests based on subsequent promises, allege that the trustee violated its duty of diligence and information disclosure, or claim the right to distribute underlying assets. The evidentiary requirements and success rates of different claim paths vary significantly. The third step is to preserve evidence: document the product prospectus, risk disclosure documents, communication records, custodian reports, and information disclosure documents for subsequent due diligence reviews. The fourth step is to design a resolution plan: including promoting the progress of asset disposal, seeking to use assets to offset debts or repay in installments, and, if necessary, asserting rights through arbitration or litigation. It should be particularly noted that protecting rights involving financial products often involves group claims and regulatory communication, and professional judgment is of great value. It is not advisable to take excessive measures that may affect the resolution process.Special services and other casesThe solution connection description in the column can be supplemented.

IV. Practical suggestions and legal basis

Action recommendations: 1. Check the product contract and risk disclosure documents; 2. Verify the progress of the disposal of underlying assets; 3. Keep all records of communication with the trustee; 4. Assess the trustee's solvency; 5. Evaluate whether to join forces with other investors; 6. Assess the paths of negotiation, mediation, and litigation. Legal basis: - The provisions of the Trust Law of the People's Republic of China (effective January 1, 2001) regarding the independence of trust assets and the obligations of trustees; - Regulations on the supervision of asset management products and trust businesses; - Relevant provisions of the Civil Procedure Law of the People's Republic of China (amended and effective January 1, 2022); - Specific applications shall be subject to the currently effective laws, regulations, and judicial rulings.

5. Henglu Law Firm's Advice

Firstly, the existence of guarantee clauses does not necessarily mean that they can be asserted. This needs to be judged in light of regulatory requirements. Secondly, the effectiveness of ex post commitments is subject to certain conditions and requires specific analysis. Thirdly, the fiduciary's duty of diligence and responsibility is an independent avenue for claims. Fourthly, the progress of the underlying asset disposal directly determines the actual recovery ratio. Fifthly, group-based rights protection requires a unified stance and standardized authorization. Sixthly, attention should be paid to changes in the regulatory authorities' policy guidelines on related businesses.\nFinancial capital and cross-border transactions involving foreign entitiesThe column can also provide an explanation of risk assessment.

VI. Frequently Asked Questions

Q1: The contract states that there's a guaranteed principal and yield. Can I request a payout now?

It's quite difficult to obtain support. Asset management products are subject to regulatory restrictions, and investors cannot be promised guaranteed principal and returns. Therefore, the fixed guaranteed principal and return clauses in the contract may have compliance issues and are usually not supported in practice. A more feasible claim direction for investors is: claiming that the trustee failed to perform the information disclosure and fiduciary obligations as agreed and should bear compensation liability for the faults; or claiming distribution rights based on the actual situation of the underlying assets. Therefore, when signing such contracts, attention should be paid to compliance risks. After discovering problems, the focus should be on the trustee's faults and asset disposal, rather than simply relying on the guaranteed redemption clause.

Q2: Was it useful for the trust company to later verbally promise to make repayments?

It does have some effect, but it needs to be analyzed in detail. The repayment commitment made after the event may constitute an investor's reliance interest, and the court will consider protecting it under certain conditions. However, the court will usually review several factors: whether the content of the commitment is specific and clear, whether there are circumstances where regulatory authorities explicitly prohibit immediate repayment, whether the trustee had the actual repayment ability when making the commitment, and whether there are circumstances that harm the public interest. Therefore, after obtaining the commitment, it is necessary to fix the written evidence, including the specific expression of the commitment, the time and personnel who made it; if it is only an oral commitment, it is recommended to confirm it in writing as soon as possible. At the same time, it should be noted that the claim path relying on the post-event commitment is uncertain, and it should be evaluated in parallel with other paths.

Q3: If the trustee fails to dispose of the assets in a timely manner, can I claim compensation?

It's possible, but it requires proving that the trustee failed to perform their duties in accordance with the agreement and legal obligations. The main arguments include: first, whether the trustee disposed of the underlying assets in a timely manner as agreed; second, whether there were circumstances where disposal was necessary but was delayed; third, whether there were issues with the disposal price being clearly unreasonable; and fourth, whether there were situations where major risks were not disclosed as agreed. For evidence, it's necessary to prepare the provisions on asset disposal in the product brochure and trust contract, regular reports and information disclosure documents, communication records on the progress of disposal, and market price data of the underlying assets. If there are evaluation opinions issued by professional institutions supporting the pricing being clearly low, they can also be used as evidence. It's worth noting that the specific determination of the trustee's liability requires a comprehensive judgment based on the provisions of the entrustment relationship and the actual performance of duties. It is recommended to sort out the evidence before making claims.

Q4: If there's a problem with the product, who should I contact?

It needs to be handled in layers. The first layer is to claim against the trustee: requiring the performance of information disclosure and fiduciary obligations, promoting the disposal of underlying assets, and explaining the risk disposal plan. The second layer is to understand the situation from the custodian: the custodian has the obligation to supervise and verify the trustee's investment behavior, and can understand the real situation of the underlying assets. The third layer is to reflect through regulatory channels: if it is believed that the trustee has violated regulations or failed to fulfill its obligations, it can be reported to the relevant financial regulatory authorities. The fourth layer is to resort to judicial means: if no agreement can be reached, litigation or arbitration can be initiated.\nFinancial capital and cross-border transactions involving foreign entities.The column can also provide guidance on how to choose a path.

Q5: If many investors suffer losses together, how can they protect their rights and interests?

The key to collective rights protection lies in the organization and path design. Practical suggestions include: first, unifying demands and talking points to avoid dispersing efforts due to individual actions; second, selecting clear representatives and issuing standardized authorization documents; third, jointly verifying underlying assets and preparing written reports; fourth, assessing the feasibility of jointly filing lawsuits or participating in arbitration; fifth, monitoring the disposal process and maintaining communication with trustees and regulatory authorities; sixth, evaluating whether to engage third-party institutions to assess asset values. It is important to note that during collective rights protection, parties should protect their own trade secrets and personal information to avoid triggering new legal risks due to improper information disclosure.

The above Q&A is mainly based on the judicial practice in Beijing. There may be differences in the adjudication standards in different regions. It is recommended to consult a professional lawyer based on the specific circumstances of the case.

If you are currently facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the relevant evidence materials, to avoid missing the statutory time limits.Financial capital legal services·Beijing Henglue Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and open adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdiction differences of individual cases may affect the conclusions. In case of disputes, please consult a practicing lawyer in time.