Since the Several Provisions of Shanghai Pudong New Area on Improving the Market-Based and Law-Based Enterprise Bankruptcy System (hereinafter referred to as the Pudong Bankruptcy Regulations) went into force, what key explorations and institutional innovations have the people¡¯s courts undertaken in the field of bankruptcy adjudication? And how can bankruptcy adjudication better play the role of market clearing and corporate rescue, and continue to provide judicial support for optimizing the business environment and promoting high-quality development?

This morning (March 4), the Shanghai Pudong New Area People¡¯s Court (hereinafter referred to as the ¡°Pudong Court¡±) held a press conference on enterprise bankruptcy and compulsory liquidation adjudication for 2025, summarizing new trends, new characteristics, and new measures taken in bankruptcy adjudication, addressing key issues and problems encountered in practice, and injecting stronger judicial momentum into building a world-class business environment.

This press conference was the fifth in the series ¡°Anchoring the 15^th Five-Year Plan and Advancing Shanghai Courts to Take the Lead and Set the Example.¡±

At the press conference, Yu Wei, Vice President of the Pudong Court, reported on the adjudication of enterprise bankruptcy and compulsory liquidation cases. Xu Jingcao, Head of the Bankruptcy Adjudication Division of the Pudong Court, introduced eight typical cases. The press conference was hosted by Yan Jianyi, Deputy Director of the Political Department and Spokesperson of the Pudong Court. Participants included Deputies to the Shanghai Municipal and Pudong New Area People¡¯s Congresses, members of the Pudong New Area Committee of the Chinese People¡¯s Political Consultative Conference (CPPCC), representatives of the Shanghai Association of Bankruptcy Administrators, and journalists from central and Shanghai media outlets.

1,897 cases accepted in 2025, with 61.95bn yuan in debts cleared

According to the white paper, in 2025, the Pudong Court accepted a total of 1,897 bankruptcy, compulsory liquidation, and related derivative litigation cases, and concluded 1,647 of them. Among the concluded cases, bankruptcy accounts for 33.4%, compulsory liquidation 36.4%, and derivative litigation 30.2%.

By case type, there were eight bankruptcy reorganization cases concluded in 2025, attracting six strategic investors¡ªincluding five upstream and downstream industry chain enterprises and one enterprise that is an existing shareholder of the reorganized enterprise¡ªand one financial investor. One enterprise, without resorting to external investment, repaid its debts through a combination of methods. In bankruptcy reorganizations, the court utilized flexible approaches such as cash repayment, debt-to-equity swaps, and trust plans, revitalizing assets valued at 12.57bn yuan and clearing 43.4bn yuan in debts, significantly improving the creditor repayment rate while rescuing enterprises.

In terms of the amount disposed of, 61.95bn yuan in bankruptcy debts were cleared in accordance with the law over the year, involving 3,388 creditors, and 4.64mn yuan in wage guarantee funds were disbursed for 220 employees. In bankruptcy liquidation cases, assets totaling 539mn yuan were collected and 18.44bn yuan in debts were cleared. Four bankruptcy settlement cases were concluded, revitalizing 10.56mn yuan in assets and clearing 110mn yuan in debts.

Faced with diverse forms of assets, the court has enhanced the professionalism of asset realization and refined disposal procedures to improve asset realization efficiency, effectively protecting creditors¡¯ rights while providing opportunities for regeneration for enterprises with operational value.

By enterprise scale, small and micro enterprises account for 72.8% of bankrupt enterprises and 51.4% of enterprises subject to compulsory liquidation. To further strengthen judicial protection for small and micro enterprises and improve the quality and efficiency of bankruptcy adjudication, the Pudong Court has fully applied expedited procedures to eligible simple cases, facilitating efficient market clearing for enterprises. In 2025, nearly 30% of bankruptcy cases were subject to summary procedures, with an average adjudication period of 120 days and the shortest taking only 48 days.

Implementing the Pudong Regulations to foster a first-class business environment

The press conference reported on a series of measures taken by the Pudong Court to deepen the implementation of the Pudong Bankruptcy Regulations, continuously integrate institutional innovation with bankruptcy adjudication practices, and leverage high-quality bankruptcy adjudication to support the high-quality development of the Pudong Leading Area.

First, focusing on serving reform and development and strengthening leadership in legal innovation. The Court has actively promoted the revision and improvement of the Pudong Bankruptcy Regulations, strengthened theoretical research on personal bankruptcy systems, explored the steady advancement of coordinated personal debt resolution mechanisms, and enhanced the judicial application of innovative institutions.

Second, improving bankruptcy mechanisms to enhance adjudication quality and efficiency. The Court has optimized the differentiation between complex and simple cases, fully applying expedited procedures to eligible simple cases. It has strengthened the connection between filing, adjudication, enforcement, and bankruptcy proceedings, resolving related enforcement cases through the ¡°enforcement-to-bankruptcy¡± mechanism. It has also established a comprehensive supervision and evaluation system for administrator performance and standardized risk prevention across the entire case process.

Third, strengthening the corporate rescue function to protect the vitality of market entities. The Court has intensified efforts to rescue distressed enterprises, deepened the practice of pre-packaged reorganization, and begun developing guidelines for bankruptcy protection tailored to small and micro enterprises, providing them with low-cost, high-efficiency pathways to bankruptcy protection.

Fourth, advancing the development of the business environment and building a coordinated service system. In collaboration with multiple departments, the Court has promoted the integrated handling of bankruptcy affairs, worked to enhance mechanisms for business environment optimization, explored the establishment of early warning systems for corporate debt distress and pre-packaged reorganization identification mechanisms, strengthened digital empowerment by providing online inquiry services through the ¡°Government Online-Offline Shanghai¡± platform, and improved information disclosure mechanisms.

Fifth, continuously strengthening team building to solidify the foundation of judicial protection. One case was selected for inclusion in the People¡¯s Court Case Database, and multiple Q&As on Fada, an internal information-sharing platform, were rated as excellent. The Court has conducted research on several topics and published papers that received awards. Its working mechanisms and related cases have been covered by mainstream media. It has held multiple seminars, invited experts to exchange ideas, and actively engaged in teaching and lecturing at universities.

Eight typical cases demonstrating judicial wisdom

The eight typical cases released at the press conference cover different types including bankruptcy reorganization, settlement, and liquidation, and focus on sectors such as chip manufacturing, real estate development, and e-commerce. They fully demonstrate the judicial wisdom of the Court in actively exercising bankruptcy adjudication functions, facilitating the orderly exit of market entities, and helping distressed enterprises overcome difficulties and achieve rebirth.

For example, in one bankruptcy reorganization case, a real estate company faced a capital chain break during the development of a residential project, resulting in nearly 300 pre-sold homes being unable to be delivered on time. With a view to ¡°stabilizing people¡¯s livelihoods,¡± the Pudong Court helped resume the construction through a combination of mechanisms involving emergency DIP (debtor-in-possession) financing, introduction of market-based investment, and specialized construction management. Meanwhile, leveraging the government-court coordination mechanism, it worked with multiple departments to address key issues such as acceptance inspection and filing, ultimately ensuring the successful completion and delivery of the project. By doing so, it has not only protected people¡¯s livelihoods and safeguarded the public¡¯s aspiration for secure housing, but also provided a reference for rescuing real estate enterprises and restoring asset value.

In a case involving the conversion from pre-packaged reorganization to formal reorganization, a commercial center developed by a property company had been stalled for five years. The Pudong Court, for the first time, applied the pre-packaged reorganization system¡ªappointing an interim administrator, convening a creditors¡¯ meeting, and securing an investor¡ªto formulate a reorganization plan in advance, gaining a critical time window. Subsequently, the Court tailored its approach to the case, flexibly adopting an ¡°asset sale restructuring¡± strategy, which involved divesting the core assets of the bankrupt enterprise and injecting them into a subsidiary, followed by the investor acquiring the subsidiary¡¯s equity. This ring-fenced risks, balanced the interests of all parties, resolved the challenge of assets being frozen due to criminal cases, and facilitated the resumption of construction, helping the enterprise achieve a ¡°rebirth.¡±

In a bankruptcy derivative litigation case, the Pudong Court, for the first time, applied the provisions of the Pudong Bankruptcy Regulations concerning the special duties of the management when the enterprise is nearing bankruptcy, ruling that a corporate executive should bear liability for tortious compensation. This case established clear boundaries for management conduct during a company¡¯s near-bankruptcy phase, filled a blank in judicial practice, and was selected as a typical case in the development of a law-based business environment by Shanghai courts.

Journalists also asked questions on topics such as measures for bankruptcy protection tailored to small and micro enterprises, how to improve the success rate of bankruptcy reorganization and rescue distressed enterprises, and the guiding significance of judgments on the special duties of the management in the zone of insolvency. The responsible officials answered each question.

Comments from Deputies and Members

Shen Yi: Deputy to the Shanghai Municipal People¡¯s Congress

With the release of the bankruptcy adjudication white paper and typical cases, the Pudong Court demonstrates its commitment to the overall development of the Leading Area. By actively applying and refining the Pudong Bankruptcy Regulations, it has responded to market development needs through legal practice. Through detailed data, it showcases the critical role of bankruptcy adjudication in optimizing resource allocation and facilitating the survival of the fittest. By advancing institutional innovation and enhancing adjudication efficiency through typical cases, it highlights the Court¡¯s commitment to serving high-quality development and provides high-quality examples for market-based and law-based bankruptcy practices.

Chu Jiayu: Deputy to the Shanghai Pudong New Area People¡¯s Congress

The white paper comprehensively reviews the Pudong Court¡¯s adjudication of cases over bankruptcy and compulsory liquidation in 2025, clearly presenting the judicial practice of market entity exit and rescue and outlining a picture of bankruptcy judicial governance through systematic adjudication practices. The typical cases precisely address difficulties and obstacles in bankruptcy adjudication, transforming the institutional advantages of the Pudong Bankruptcy Regulations into adjudication effectiveness and driving institutional innovation and practical exploration. Through corporate rescue, rights protection, and mechanism improvement, they strengthen legal safeguards and inject judicial momentum into regional high-quality development.

Feng Xiaojun: Standing Committee Member of the CPPCC Shanghai Pudong New Area Committee

With comprehensive data and typical cases, the white paper presents a panoramic view of the Pudong Court¡¯s bankruptcy adjudication achievements in 2025. The eight typical bankruptcy cases highlight the Court¡¯s core values of seeking judicial innovation, rescuing bankrupt enterprises, and providing bankruptcy protection for small and micro enterprises. Through deepened government-court coordination, improved pre-packaged reorganization mechanisms, and accelerated summary procedures, the Court has continuously optimized the law-based business environment, serving the development of the Leading Area with high-quality bankruptcy adjudication. This provides solid judicial support for Pudong¡¯s accelerated efforts to become a benchmark for a market-based, law-based, and internationalized business environment, reflecting the Court¡¯s commitment to and responsibility in ensuring the high-quality development of private enterprises.

Shanghai Pudong New Area People¡¯s Court: Report on Adjudication of Cases over Enterprise Bankruptcy and Compulsory Liquidation (2025).pdf

Shanghai Pudong New Area People¡¯s Court: Typical Cases on Enterprise Bankruptcy (2025).pdf