At the 2026 Viewpoint Annual Forum held on April 2nd in Guangzhou, Di Nan, Vice President of Modern Capital Management Co., Ltd., stated that companies entering bankruptcy reorganization procedures can obtain judicial protection. This includes a halt on interest accrual, preventing compound interest; termination of litigation, reducing the costs associated with lawsuits and enforcement actions across different jurisdictions; unfreezing of accounts to restore operational cash flow; implementation of centralized jurisdiction to improve communication efficiency with courts; and the ability to maintain normal operations under the supervision of an administrator.
Mainstream reorganization tools include full cash repayment for small claims, debt extensions, debt-to-equity swaps,剥离 of trust beneficiary rights, introduction of public welfare bonds, and bringing in strategic investors. In some cases, shareholding structures may change while the existing management team remains in place.
Di Nan also presented three major case studies: A-share listed company Jinke used 2.6 billion yuan in reorganization funds to restructure hundreds of billions in debt, increasing the recovery rate for ordinary creditors from 3% in liquidation to approximately 20%. Red Star Holdings achieved a self-rescue reorganization through debt-to-equity swaps, trust arrangements, and valuation adjustment mechanisms, allowing original shareholders to retain minor equity and management rights. Suning Group consolidated 38 affiliated companies into a single reorganization, which resulted in the original shareholders' equity being wiped out, although they retained operational management rights, completing the restructuring by leveraging internally generated cash flow assets.
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