(a) In relation to each type of insolvency procedure available in the legal system of this economy, what types of claims of creditors are properly admissible for payment in the context of that procedure? (for example liquidated debts, future debts, contingent claims, secured claims, unliquidated claims for damages, interest claims, costs of administration or of legal proceedings, periodical payments, debts owed by guarantors of the business organization.)

 

• Generally, the claims against the bankrupt established prior to the adjudication of bankruptcy shall be admissible claims provable in bankruptcy unless the claims are excluded under the Bankruptcy Law. In the case of claims having fixed period but not mature yet, it shall be deemed as being mature upon adjudication of bankruptcy. In the case of future claims which cannot be exercised within 15 days after the adjudication of bankruptcy, such claims are not admissible. In the case of claims subject to a condition, the total amount thereof may be taken as the admissible claim provable in bankruptcy; provided, that (i) if the condition has the effect of canceling such claim, the counterparty shall post a bond with the court or the payment thereof shall be deposited with the court, or (ii) if the condition has the effect of validating the claim, the payment shall be deposited with the court and if such claim cannot be exercised within 15 days after the distribution table is approved by the court, such claim are not admissible.

The following claims are not admissible under the Bankruptcy Law:

• ² interest accrued after adjudication of bankruptcy;
• ² expenses incurred from participation in the bankruptcy procedure;
• ² compensation for damage and penalty for the breach of a contract in consequence of non-performance after adjudication of bankruptcy; and
• ² fines and retroactive payments.
• ² secured claims and claims with priority.

• The law does not expressly provide what claims may be admissible under the composition procedure. However, the scholars believe that since the purpose of composition proceeding is to avoid the possible bankruptcy of the debtor, the claims admissible under the bankruptcy proceeding shall also be admissible under the composition proceeding.
• Pursuant to the Company Law, all claims established prior to the adjudication of reorganization shall be admissible except for the non-admissible claims in the bankruptcy proceeding as mentioned above; provided, that the secured or preferred claims are admissible.

(b) At what date are the amounts of admissible debts computed?

 

In case of bankruptcy, composition, liquidation, or reorganization, admissible claims will be computed from the last date of the period for registration of claims.

(c) By what method are claims of creditors proven by those creditors in the context of each type of insolvency procedure?

 

Although all the insolvency proceedings require the creditors to register their claims with sufficient proof, there are no express languages under the relevant laws governing the methods of providing the proof.

(d) How are disputed claims made by creditors adjudicated upon? (for example by the administrator, or by a Court.)

 

Except that the supervisor and assistant supervisor may adjudicate the disputes among the creditors during composition procedure, the court will be the adjudicator when there is a dispute. In case of liquidation, there is no such possibility of dispute since a majority vote mechanism exists with respect to the reconciliation plan.

(a) In relation to each type of insolvency procedure available in the legal system of this economy, what principles apply to the division of available assets of the corporate debtor among those of its creditors entitled to payment? Is there a basic principle of equality of payment, or are rights of priority of payment enjoyed by secured creditors, or by certain classes of creditors over others? (for example costs of the administration, claims for taxes owed by the debtor, amounts owed to employees of the organization.)

 

• In case of the proceedings of composition, reorganization or special liquidation, the payments will be made in accordance with the proposal adopted in the creditors meeting or interested parties meeting, as the case may be. As such, there is no such issue of priority of payments. The priority of payment will then be an issue only at bankruptcy proceeding. Except for the secured claims, preferred claims, costs of the bankruptcy, tax claims, and employees' pay, all creditors shall rank pari passu for the satisfaction of their claims on a pro rata basis.

(b) Give a brief account of the order of priorities, if any, of payment of creditors prescribed by the legal system of this economy.

 

Please refer to (a) above.