China's draft amendment to the Enterprise Bankruptcy Law was submitted to the
National People's Congress Standing Committee for a second reading on the 25th.
The revised draft refines personal bankruptcy, bankruptcy protection,
restructuring and cross-border bankruptcy rules. It adds a dedicated
pre-restructuring negotiation section, defining two routes — parties reaching a
restructuring agreement or a pre-vote on a preliminary restructuring plan — and
specifies the legal consequences for entering formal restructuring from either
route. The draft allows parties that lawfully conduct pre-restructuring
negotiations to recommend an administrator to people's courts. It also clarifies
cross-border bankruptcy provisions, including extraterritorial effect of
proceedings, circumstances for Chinese court jurisdiction and mechanisms for
international judicial assistance.
