Piercing the Corporate Veil: SPC Provisions Offer Hope for Creditors in Enterprise Restructuring
October 31, 2003 | BY
clpstaff &clp articlesState enterprise reform is an urgent issue facing the Chinese government. Among the important legislation issued in 2003 in this area are provisions from the Supreme People's Court that govern disputes involving enterprise restructuring.
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By Steven Blayney, Lovells, Hong Kong
On January 3 2003, the Supreme People's Court promulgated the Several Issues Concerning the Trial of Civil Dispute Cases Relating to Enterprise Restructuring Provisions (the Provisions).1 The Provisions give creditors recourse to the courts to adjudicate disputes arising out of the restructuring of enterprises in the PRC. The Provisions recognize for the first time under PRC law the strategy of piercing the corporate veil and recovering debts from heretofore protected (and usually state-owned) enterprises in certain circumstances.