(a) In relation to each type of insolvency procedure available in the legal system of this economy, by what means may the administration of the corporate debtor be terminated?

 

• The bankruptcy proceeding will be terminated in case:
  • ² a reconciliation plan is adopted by creditors and approved by the court.
• The composition proceeding will be terminated in case:
• the terms of composition are not acceptable to the creditor(s);
• the composition is made based on the false representation of the corporate debtor; or
• the corporate debtor fails to honor the terms of composition.
• The reorganization proceedings will be terminated in case:
  • ² the reorganization plan is not agreeable to the interested parties;
  • ² the reorganization plan is not approved by the court; or
  • ² there is no need or likelihood to implement the reorganization plan due to changes in situations or justifiable causes.
• The special liquidation will be terminated in case:
  • ² when the corporate debtor is entirely liquidated, and all the debts are satisfied, or the creditors agreed to the resolution of the creditors meeting. No administration is necessary since the company is winded up.
  • ² when the company is bankrupt. At such case, the trustee in bankruptcy will take over the administration of the company's remaining business and property.

(b) Who may initiate the termination of each type of insolvency procedure?

 

As provided in paragraph (a) above, the termination of administration in each type of insolvency proceeding is occurred due to the completion or failure of such proceeding or agreement among the creditors. Therefore, there is no specific person who will initiate or petition for each type of termination of administration.

(c) On what grounds may each type of insolvency procedure be terminated?

 

Please see paragraph (a) of this section.

(d) What are the consequences for the corporate debtor of termination of the insolvency procedure? (for example to whom does control of the debtor revert following termination of the procedure; or if the debtor no longer exists, what are the procedures for and consequences of its dissolution?)

 

• Upon termination of the bankruptcy proceeding because of the division of bankrupt estate, all personal restrictions posted on the corporate debtor's responsible persons are removed. The corporate debtor may resume the control and management of the assets in the bankrupt estate, if any. The other restriction once posted by the court on the corporate debtors and its responsible persons will be removed only by the court's order.

  If the bankruptcy proceeding is terminated because of the agreement made among the creditors and the corporate debtor for reconciliation, the corporate debtor may resume the power to manage and dispose the assets once in the bankrupt estate, subject to the restrictions and manners provided in the reconcile agreement.

• The composition proceeding may be terminated upon its success or failure. If succeed, the corporate debtor may continue all its management and disposition of its assets without limitation, because the creditors' composition claims are satisfied. If fail because of the following grounds, the court may, upon the creditors' motion, adjudicate to revoke the composition and order the corporate debtor bankrupt ex officio:
  • ² the creditors expressed at the creditors' meeting disagreement to the conditions of a composition, or did not attend, or did not delegate a proxy to attend, the creditors' meeting at the time when the resolution for a composition was adopted, and can prove that the composition shows bias in favor of the interests of other creditors and is therefor prejudicial to their own rights.
  • ² within one year from the date when the court approves the composition, the creditors prove that the corporate debtor has made false report on his debts, concealed his properties or promised to give extra benefits to one or some of the creditors.
  • ¨² the corporate debtor fails to fulfill the conditions of composition and is motioned by a majority of the unsatisfied creditors holding more than two thirds of the total amount of unsecured claims.
• The corporate debtor may step into the bankruptcy proceeding or continue to operate its business upon termination of the reorganization proceeding. If the corporate debtor is reorganized, it and its responsible persons may resume all the powers to manage and dispose the assets just as a regular corporation. Otherwise, all the qualified assets will become bankrupt estate and managed by the trustee in bankruptcy accordingly.
• A successful special liquidation proceeding will be ended upon the satisfaction of all the creditors, with or without reconciliation (which amend the claims). The corporate debtor may continue its business as usual after a successful special liquidation.

  On the other hand, the court will order the corporate debtor bankrupt if the creditors are not satisfied and the reconciliation is not formed, or is formed by not enforceable. The trustee in bankruptcy will then take over the power of managing and disposing the assets qualified as bankrupt estate.