[Direct answer]In the Beijing area, if the performance commitments of listed companies fail to meet the standards, they can generally seek compensation according to the contract. As long as clear and feasible compensation arrangements have been agreed upon during the restructuring, the failure of the commitment party to meet the standards constitutes a breach of contract. The listed company can claim for continued performance, payment of compensation and breach of contract damages in accordance with Articles 577 and 585 of the Civil Code of the People's Republic of China. Related parties with joint and several liability should also be listed as defendants. The difficulty lies not in whether it can be claimed, but in obtaining compensation. Once the commitment party falls into a debt crisis or enters bankruptcy proceedings, the compensation confirmed by the judgment may still face enforcement difficulties. It is necessary to arrange for property preservation and priority of compensation when suing.

I. Problem Background and Typical Scenarios

When a listed company acquires assets, the counterparty often makes performance commitments regarding the net profit or return on net assets of the target assets over the next few years, and agrees on the compensation method if the targets are not met. There are three typical scenarios: the performance of the target assets deteriorates, with the actual figures far below the promised figures; the counterparty refuses to compensate on the grounds of industry cycles or changes in accounting standards; and the counterparty's parent company's capital chain breaks down and is unable to compensate. When handling similar cases in Beijing, the disputes often focus on the scope of the compensation amount and the division of responsibilities among the parties involved.

II. Key points of contention

First, the effectiveness of the clauses. The performance commitment itself is usually valid, but the differential compensation clause based on short-term stock prices in the secondary market for compensation may be deemed to violate the principle of equal rights for shareholders and the pricing mechanism of the securities market, and be deemed invalid on the grounds of harming financial security and public interests. After being deemed invalid, the actual losses shall be shared according to the proportion of fault. Second, the compensation basis. The calculation basis of stock compensation and cash compensation is different. Adjustments after stock split and dividend adjustment shall be handled in accordance with the agreement. Third, the subject of liability. Whether the controlling shareholders and actual controllers bear joint and several liabilities depends on the agreement and the determination of the affiliated relationship. Fourth, the ability to perform the obligation. If the party making the commitment enters bankruptcy liquidation, the compensation claims shall be timely declared and the order of repayment verified.

III. Professional analysis by Henglue Lawyers

When handling such cases, Henglue Law Firm generally conducts three verification steps first: First, read through the restructuring report, compensation agreement, and supplementary agreement to confirm the triggering conditions, calculation formula, and calculation period; Second, fix the evidence of performance differences, including audit reports, annual reports, and special audit opinions; Third, verify the assets, pledges, and litigation situations of the promisee and related parties to determine the enforceability of the judgment. The statement in the agreement that the compensation obligation does not depend on whether the promisee is still employed or continues to hold shares is particularly crucial for locking in liability. Such matters span across multiple legal fields.\nFinancial capital and cross-border transactions involving foreign entities、Business and contract disputes in enterprisesIn these two major areas, it is advisable to integrate evidence and strategies into a unified system.

IV. Practical suggestions and legal basis

According to Articles 577 and 585 of the Civil Code of the People's Republic of China (adopted on May 28, 2020 and implemented on January 1, 2021), if the party making the commitment fails to fulfill its obligation of performance compensation as agreed, it shall bear such contractual liabilities as continuing performance and compensation for losses; the "Measures for the Management of Major Asset Restructuring of Listed Companies" (issued by the China Securities Regulatory Commission and subject to the current effective version) require that when purchasing assets from controlling shareholders, actual controllers, and their controlled related parties, a clear and feasible compensation agreement should be signed in the event that the actual profit is less than the profit forecast; the "Memorandum on the Judicial Work of Civil and Commercial Cases of the National Court" (issued on November 8, 2019) provides guidance on the validity and performance of the hedging agreement. Suggestions: First, send a written reminder to the party making the commitment upon the expiration of the commitment period and pay attention to the statute of limitations; Second, list the party making the commitment and its jointly and severally liable related parties as defendants; Third, apply for property preservation simultaneously and prioritize seizing the unpledged equity and accounts; Fourth, pay attention to the bankruptcy process, timely declare claims, and seek assistance from relevant institutions.Creditor's rights and debts, and enforcementThe experience assessment evaluates the compensation range.

5. Henglue Law Firm's Advice

The greatest adversary of recovering compensation from performance commitments is time. Once the party making the commitment enters a chain reaction of debt crisis, the available assets for enforcement will be quickly divided. Every day of early preservation increases the scope of compensation. Recovery does not always start with litigation. Requiring them to fulfill their commitments and claiming compensation for the difference are also effective means of pressure; for those involving overseas assets, we should also consider the overseas recognition and enforcement of the judgment in advance.Beijing Henglu Law FirmIt is recommended to get involved in the evaluation as soon as the commitment period is about to expire, and make good use of it.\nCross-border transactions involving foreign entitiesService resources.

VI. Frequently Asked Questions

Q1: If the performance commitment is not met, what is the likelihood of recovering the compensation?

As long as the compensation clause is valid and the performance gap can be proven, the claim is usually supported; the difficulty lies in the ability of the obligor to pay, and there is a possibility that even if the judgment is won, it may be difficult to enforce it.

Q2: What evidence do I need to prepare for a claim for compensation?

The restructuring report, compensation agreement and supplementary agreement, audit report and annual report during the commitment period, special audit opinions on performance differences, reminder letters and delivery certificates, and the property of the commitment party and clues related to litigation.

Q3: What are the approximate attorney fees and litigation costs for such cases?

The litigation fees shall be prepaid in stages according to the amount of the disputed subject matter, and the losing party shall bear the fees in accordance with the proportion determined by the court after the plaintiff wins the case; the attorney's fees shall be collected in accordance with the entrustment contract, and the preservation and enforcement fees shall be calculated according to the actual expenses incurred.

Q4: How long does it typically take from filing a lawsuit to actually receiving the money?

The first-instance trial usually lasts about six months, and the time for major and complex cases to be concluded may be even longer. The time for the funds to be credited after the judgment comes into effect depends on the financial status of the obligor. If the obligor enters bankruptcy proceedings, they need to file a separate claim for their debts.

Q5: If you find that your performance doesn't meet the target, what should you do first?

Immediately review the terms of the agreement and secure evidence of performance discrepancies. Concurrently, verify the property clues of the committed party. Within the statute of limitations, send a written reminder and apply for property preservation as soon as possible during the litigation process.

The above answer is based on the judicial practice in Beijing. The judicial interpretation in other provinces and cities may vary. For specific cases, please refer to the local rules and evidence situation.

VII. Relevant public cases (for reference only, not handled by our firm)

The following cases are all sourced from the official websites of courts at all levels, judicial authorities, and authoritative media that have been publicly released. They are unrelated to the cases handled by our firm and are provided solely for reference in understanding relevant adjudication rules. They do not constitute opinions on specific cases.

[Case Number](2024) Case No. 86 of the Civil Division of the Supreme People's Court
[Trial Court]The Supreme People's Court (final appellate court)
[Judicial Summary]The listed company and the original controlling shareholder's related party made a performance commitment regarding the annual net asset return on the LCD module business, but the commitment failed due to the commitment party's parent company falling into a debt crisis. The Supreme People's Court ultimately dismissed the appeal, upheld the first-instance judgment, and ordered the commitment party to pay the listed company a performance compensation of 3.029 billion yuan, with the related party assuming joint and several liability for repayment. The judgment also noted that the commitment party has entered bankruptcy liquidation and some of its assets have been pledged as collateral, so there are still execution risks for the actual recovery of the compensation.
[Source]Pengpai News (Report on the Major Lawsuit Announcement of Huaying Technology) (2025-12)

[Case No.]The case number has not been made public.
[Trial Court]Beijing Financial Court (Jindian Case)
[Judicial Summary]In equity investment, the agreed upon differential compensation clause, which uses the short-term stock price of the target company in the secondary market after its backdoor listing as the basis for compensation, violates the principle of equal rights for equal shares in the Company Law and the mandatory provisions of the Securities Law on the pricing mechanism of the securities market and financial risk prevention. It exceeds the scope of private disposal between the parties and constitutes a harm to financial security and public interests of society. Therefore, it should be deemed invalid. After the agreement is deemed invalid, the actual losses shall be shared according to the proportion of the parties' faults, and the actual losses shall be determined based on the net losses.
[Source]The official website of the Beijing Financial Court features a "Classic Case" titled "Invalidity of the Difference Compensation Clause in the Betting Agreement for Equity Investment in a Listed Company, and the Parties Shall Share the Actual Losses According to the Degree of Their Fault".

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

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