In the process of handling enterprise bankruptcy liquidation cases, administrators often encounter the issue of transferring vehicle assets of the bankrupt enterprise or the compulsory liquidation enterprise. Usually, in addition to the above-mentioned enterprises voluntarily handing over vehicle assets to the administrator, the administrator will also go to the vehicle management agency of the local public security organ to inquire about bankruptcy or compulsory liquidation of movable property such as motor vehicles under the name of the enterprise. Especially for those enterprises filed by creditors that apply for debtor bankruptcy or compulsory liquidation, it is more necessary for the administrator to take the initiative to go to the vehicle management office to find out the situation of the motor vehicles under the name of the enterprise.

In April 2020, in order to ensure the convenience of bankruptcy administrators in performing their duties and promote the creation of a good business environment, the Beijing Municipal Higher People's Court jointly coordinated with relevant departments of the Beijing Municipal People's Government and issued nearly 30 reform measures, providing all-round facilitation system guarantees for administrators to inquire about information, handle tax-related matters, take over property, dispose of property, etc., effectively solve some bottlenecks and obstacles that affect the effective progress of bankruptcy liquidation procedures, and greatly improve the quality and efficiency of bankruptcy administrators in handling bankruptcy liquidation cases. One of the facilitation measures is that the vehicle management agency of the public security organ provides convenience for the administrator to inquire about the vehicle-related information under the name of the bankruptcy liquidation enterprise. However, inquiring about the vehicle information under the name of the bankruptcy liquidation enterprise is only the first step, and how to recover the vehicle property and improve the recovery rate of bankruptcy liquidation property is the most critical issue. In reality, it seems that the efforts of the administrators themselves to solve this key problem alone have few means and little results, and it is necessary for the court to coordinate the further cooperation of the public security organs and other relevant functional departments to be more effective.

1. The reasons why the bankruptcy liquidation enterprise does not hand over the vehicle property

Administrators often encounter situations where upon inquiry it is found that a bankrupt or liquidated enterprise owns motor vehicles in its name, but the enterprise or its shareholders fail to hand over the relevant vehicles when handing over the assets of the enterprise to the administrator, and the reasons may vary. Although some debtors voluntarily apply for enterprise bankruptcy liquidation, due to the subjective factors of the shareholders or relevant personnel of the bankrupt enterprise wanting to always occupy the enterprise's property, especially in the Beijing area bankruptcy liquidation enterprise, the vehicle occupier is unwilling to hand over the motor vehicle to the administrator when the Beijing number plate of the vehicle under its name is difficult to obtain. In some enterprises where creditors apply for bankruptcy liquidation, the debtor and related personnel often have resistance, do not cooperate with the administrator to take over the enterprise, are even more unwilling to take the initiative to hand over the vehicle property, deliberately do not provide information on the whereabouts of the vehicle, or do not know the whereabouts of the vehicle. Of course, in practice, there are indeed some situations where the whereabouts of vehicles are unknown or lost due to historical problems or objective circumstances, for example, some bankrupt state-owned enterprises are afraid of bearing the responsibility for the loss of assets due to their early establishment and frequent personnel changes, and the relevant personnel of the enterprise are afraid of bearing the responsibility for the loss of assets during bankruptcy liquidation, so they all infer that they do not know, and the person handling the handover cannot tell where the vehicle goes; Some businesses have no knowledge of the vehicle because the whereabouts of the legal representative are unknown or they are imprisoned for a crime; or the vehicle is driven away by individual creditors in possession; or vehicle theft; Or because the vehicle has reached the scrapping period, the enterprise has not taken the initiative to scrap, or has been forgotten and unmanaged, and so on. In short, the failure of bankruptcy liquidation enterprises and relevant personnel to hand over vehicles and provide information on the whereabouts of vehicles has created considerable difficulties for administrators in recovering and disposing of the bankruptcy estate.

2. Cases in which it is difficult for the administrator to recover the vehicles of the bankruptcy liquidation enterprise that have not been handed over

In a bankruptcy liquidation case handled by our administrators' team, the bankrupt enterprise was jointly funded by a Hong Kong enterprise and a state-owned enterprise, and the Hong Kong enterprise was the controlling shareholder. When the administrator took over the bankrupt enterprise, it was found that the legal representative of the enterprise was also the actual controller of its Hong Kong shareholders and was serving a prison sentence for criminal offences. The bankrupt business ceased operations many years ago and had no employees at the time of bankruptcy liquidation. Since the other shareholder of the bankrupt enterprise is a state-owned enterprise, there is a requirement to improve quality and efficiency and clean up and dispose of "zombie enterprises" investing abroad, so it took the initiative to submit an application for bankruptcy liquidation. When the principal of the bankrupt enterprise and the administrator handle the transfer of property, there is no property to be handed over. After the administrator personally went to the vehicle management agency of the public security organ to inquire, he learned that the bankrupt enterprise still owned more than 20 Beijing-brand motor vehicles under its name. Among them, some vehicles are yellow-labeled vehicles and have reached the scrapping period, which are vehicles that are prohibited from driving on the road, and require enterprises to take the initiative to go through scrapping procedures, but bankrupt enterprises have not yet gone through scrapping procedures; Although some vehicles are nearing the end of their life date, they are still under normal annual inspection; There are also some vehicles that have a short purchase life and are luxury vehicles. In addition, when the Manager inquired about the above-mentioned vehicle violation information, he found that even during the recent COVID-19 epidemic, some of the above-mentioned vehicles still had violations in Beijing and other provinces and cities, indicating that some vehicles were still driving, but the Manager could not know the current location and owner of such vehicles. The administrator asked the relevant personnel of the Chinese shareholders of the enterprise, and all said that they did not know or had not seen these vehicles, did not know who was in possession and used these vehicles, and the bankrupt enterprise also said that it did not have the information of the above-mentioned vehicles. Since all the other assets of the enterprise had been enforced by the court before the acceptance of its bankruptcy application, the enterprise had no other property in its name for the time being, except for these vehicles whose whereabouts were unknown as inquired by the administrator. The administrator made efforts to inquire about the vehicle property in the name of the bankrupt enterprise, but did not have the competent means to find and recover the vehicle property of the bankrupt enterprise. In this regard, the manager is also very helpless.

In another bankruptcy liquidation case undertaken by the administrator, the bankruptcy case lasted several years due to the long time for tracing the books and assets of the bankrupt enterprise. When the administrator took over the bankrupt enterprise, the enterprise only handed over information and items such as business licenses and official seals, but did not hand over any property. The manager went to the vehicle management agency to inquire and found that there were two motor vehicles under the name of the enterprise, and these two motor vehicles were inspected normally every year after the manager took over the enterprise. According to the manager's understanding, the vehicle under the name of the unit needs to provide a copy of the unit's business license, a power of attorney with the unit's official seal and other documents for annual inspection procedures, but the business license, official seal, etc. have been handed over to the manager when the manager takes over the enterprise, so how does the occupier of the above-mentioned vehicle pass the annual inspection procedures? Does the vehicle occupier still have an unhanded over or even forged set of official seals or business licenses? It is also unknown.

In response to the above-mentioned administrator's own inquiry into the vehicle in the name of the bankruptcy liquidation enterprise, the administrator applied to the bankruptcy court to seize it, and notified the bankrupt enterprise agent and its shareholders in writing to hand over the above-mentioned property to the administrator, informing them of the legal consequences of refusing to hand over the above-mentioned property, but the shareholders of the enterprise repeatedly indicated that they did not actually participate in the operation of the bankruptcy enterprise and did not understand the relevant vehicles. The administrator reported the relevant situation to the court in a timely manner, but because the legal representative of the bankrupt enterprise had already served his sentence in prison, there were no left-behind personnel, and the relevant shareholders did not know the specific situation of the property, the court undertaking the bankruptcy case could not apply Article 127 of the Bankruptcy Law to punish the directly responsible person.

The administrator also communicated with the court whether it could ask the public security traffic management department to assist in seizing the vehicle if it found it, but the court held that the bankruptcy liquidation case was still a civil case and there was no basis for the public security organ to exercise the power of seizure. Therefore, the administrator was unable to recover the vehicle property of the above-mentioned bankrupt enterprise, and ultimately could only put forward an opinion on not to recover the vehicle property on the grounds that the above-mentioned vehicle with unknown whereabouts had no recovery value or the cost of recovery was too high, and submitted it to the creditors' meeting for approval. Eventually, the bankrupt business declared bankruptcy and terminated the bankruptcy liquidation proceedings because it had no property to distribute.

In short, in many cases, if the bankruptcy liquidation enterprise does not take the initiative to hand over the motor vehicle to the administrator, even if the administrator inquires on its own that the bankruptcy liquidation enterprise has a motor vehicle in its name, it cannot trace the location of the vehicle and the occupier of the vehicle, and cannot recover the vehicle property of the bankrupt enterprise in time.

3. The hidden danger of the vehicle of the bankruptcy liquidation enterprise cannot be recovered

Similar cases such as those mentioned above, involving the difficulty of recovering the property of vehicles in the name of a bankrupt enterprise, are not isolated cases. Since motor vehicles are not like real estate such as houses and land, motor vehicles have a large liquidity, and when the administrator takes over the bankrupt enterprise, if the bankrupt enterprise or its shareholders do not hand over the motor vehicle to the administrator, it is difficult for the administrator to find the vehicle by himself, and even if the vehicle information is found, there is no corresponding means to recover the property. Not only in bankruptcy liquidation cases, but also in other civil enforcement cases, cases where the whereabouts of motor vehicles are unknown and enforcement difficulties are also common. In fact, unless a criminal case is involved, the public security organ or procuratorate will take the initiative to seal or directly seize the suspect vehicle ex officio, otherwise, as far as the general civil and commercial dispute cases or bankruptcy liquidation cases are concerned, the seizure measures taken by the court against motor vehicles are often simply to serve the vehicle management department with a seizure enforcement ruling and a notice of assistance in enforcement, and such seizure measures can only restrict the owner of the motor vehicle from going through the registration procedures such as vehicle change, transfer, mortgage, etc., but cannot actually control the vehicle. The current Road Traffic Safety Law of the People's Republic of China and other relevant laws and regulations do not give the public security department the right to seize the vehicles of enterprises that have been sealed for bankruptcy liquidation. Based on this, many owners or users of seized vehicles simply do not take the initiative to perform the obligation to return the vehicle property in a timely manner, and ignore or even maliciously evade the administrator's request to recover the property or the court's enforcement measures. These vehicles that cannot be recovered and disposed of will cause the following hidden dangers:

1. Hidden dangers that should be scrapped vehicles that cannot be recovered

First of all, if the motor vehicles of the bankruptcy liquidation enterprise that have reached the end of their life cannot be recovered and disposed of and continue to drive on the road, their exhaust emissions exceed the standard, which will cause atmospheric environmental pollution; Secondly, the vehicle has reached the mandatory scrapping period but is still driving on the road, which has great safety hazards and is very prone to road traffic safety accidents; Third, vehicles that have been scrapped and cannot be driven, if placed or discarded somewhere, will not only occupy parking resources, but also cause serious pollution to the surrounding environment, such as waste engine oil, waste batteries, and waste parts.

2. Hidden dangers that can be recovered by vehicles that can be used normally

For vehicles that are still under normal annual inspection and use in the name of the bankruptcy liquidation enterprise, it means that they still have certain economic value. Since these vehicles are part of the assets of the enterprise in bankruptcy liquidation, if they cannot be recovered, they will inevitably harm the interests of creditors. In addition, as mentioned above, after the administrator takes over the bankruptcy liquidation enterprise and applies to the court to seize the unhanded over vehicle, some vehicles continue to be in possession and use by whom, and can still go through the vehicle annual inspection procedures normally, indicating that it is not excluded that the vehicle occupier still holds the official seal of the bankruptcy liquidation enterprise that has not been handed over, or that forged official seals and licenses may be used. Since the above-mentioned unhanded vehicles are still registered in the name of the bankruptcy liquidation enterprise, once a major traffic liability accident occurs and the perpetrator escapes, the bankruptcy liquidation enterprise, as the owner of the vehicle, will legally bear the corresponding joint and several liability, but since the bankrupt enterprise may have no other property, the victim can neither pursue the real responsible person nor obtain compensation from the bankrupt enterprise. Therefore, if the above-mentioned vehicles or official seals are not handed over to the administrator or cannot be recovered, further losses may be caused to the bankrupt enterprise or others.

4. Break down obstacles and recommendations for managers who are difficult to recover vehicles

The administrator is only the temporary manager of a bankruptcy liquidation enterprise, and does not have much authority and means. The administrator's performance of duties is based on the Bankruptcy Law and the strong support of the court accepting the bankruptcy case. At present, with the joint efforts of relevant departments of the Beijing Municipal Government, the Beijing Municipal High People's Court and the Beijing Bankruptcy Administrators Association, the business environment in Beijing has been significantly improved, and the administrators have indeed felt that the convenience of some aspects has been optimized and enhanced in the process of performing their duties. However, in order to further improve the convenience of the administrator in performing their duties and increase the recovery rate of the bankruptcy estate, the relevant functional departments and courts can take further improvement measures.

As mentioned above, at present, it is difficult to deal with the problem of actually finding and recovering the vehicle in the name of the bankrupt enterprise if only the existing means or measures of seizure by the administrator or the court are relied on. However, are these so-called "unaccounted for" vehicles really impossible to find? It's not. In the era of big data, the activity trajectory of vehicles can be monitored nationwide, but to really recover these vehicles, it is also necessary for the court to coordinate and cooperate with other government functional departments, especially public security organs, vehicle inspection agencies, parking fee management departments, etc., to assist the court and the administrator in investigating and controlling these vehicles belonging to bankruptcy and liquidation enterprises.

The scope of public security organs and other relevant functional departments assisting courts or administrators in locating and seizing vehicles is limited to bankruptcy cases or compulsory liquidation cases. Since the bankruptcy liquidation procedure is a general fair liquidation procedure, which is the last link in the disposal of all claims and debts of the bankruptcy liquidation enterprise, after the bankruptcy liquidation procedure is completed, the administrator needs to go through the cancellation procedures of the bankruptcy liquidation enterprise, and the main qualification of the bankruptcy liquidation enterprise will be extinguished, and the unpaid claims of creditors will also be deemed extinguished with the end of the bankruptcy case. Therefore, coordinating the work of the public security organ to cooperate with the court or administrator, and seizing the vehicle of the bankruptcy liquidation enterprise will not lead to the error of sealing or seizure. However, if the sealing or seizure of other vehicles that are not bankruptcy liquidation cases has entered the court enforcement procedure, but has not entered the enforcement procedure, it is not appropriate to be within the scope of cooperation of the public security organ in order to avoid losses caused to the parties due to the mistake of sealing or seizure. Specific recommendations could be taken as follows:

1. Public security organs and other relevant departments assisting in the seizure of bankruptcy liquidation enterprise vehicles may refer to the "Investigation Procedures for Suspected Vehicles" stipulated in Chapter V of the Regulations for Motor Vehicle Registration (Order No. 124 of the Ministry of Public Security) issued by the Ministry of Public Security.

When the administrator inquires about the vehicles in the name of the bankruptcy liquidation enterprise at the vehicle management office of the public security traffic management department, it submits to the court the relevant documents for accepting the bankruptcy or compulsory liquidation case of the enterprise. After receiving the above-mentioned documents, the vehicle management office shall inform its business posts that in the process of handling motor vehicle registration and related business, the relevant procedures of the manager must be presented before proceeding. Otherwise, once it is found that the motor vehicle belongs to the name of the bankruptcy liquidation enterprise, it will enter the "bankruptcy liquidation enterprise vehicle investigation procedure" - that is, if it cannot be ruled out that the vehicle is a vehicle of a non-bankruptcy liquidation enterprise, the vehicle should be detained, the owner or agent of the motor vehicle should be questioned and a record of the inquiry should be made, a certificate of administrative compulsory measures should be issued to the owner or agent of the motor vehicle, and the court or administrator should be contacted, and if it is verified that it is indeed a vehicle of the bankruptcy liquidation enterprise, assist in handing over the stranded vehicle to the court or administrator. In the process of handling road traffic accidents, road inspections, etc., such as at the scene of traffic violation enforcement, the law enforcement personnel should add a verification item, that is, to verify whether the owner of the motor vehicle is included in the "bankruptcy liquidation enterprise list". If it is found that the owner of the motor vehicle is an enterprise that has been accepted by the court for bankruptcy liquidation cases, it will also enter the above-mentioned "bankruptcy liquidation enterprise vehicle investigation procedure". In addition, the vehicle management department should also network with the vehicle inspection agency, and in the process of handling the annual inspection of motor vehicles, if it is found that the owner of the motor vehicle is a bankruptcy liquidation enterprise, it must present the procedures of the bankruptcy administrator before the annual inspection, otherwise it should refuse to go through the annual inspection procedures of the vehicle and promptly notify the vehicle management office or the public security traffic management department to initiate the "vehicle investigation procedure for bankruptcy liquidation enterprises", and feedback the situation to the relevant bankruptcy acceptance court or administrator, so as to block the arbitrary flow of vehicles from the vehicle inspection link. Of course, public security departments, vehicle inspection agencies, etc. should establish a data and information sharing mechanism with judicial organs and other relevant departments to improve the possibility of investigation, control and recovery of bankruptcy liquidation enterprise vehicles.

2. In view of the fact that Beijing has reformed road parking and has realized unified electronic toll collection in some urban areas, we can also refer to the recent case of the enforcement judge of the Chaoyang District People's Court of Beijing Municipality using the "Beijing Traffic Road Parking System" to find and locate the vehicle with the parking record information of the seized vehicle, so as to promote the advancement of bankruptcy liquidation cases and enforcement cases.

In short, there are always more solutions than difficulties, and the recovery of vehicles in bankruptcy liquidation cases can be achieved as long as the judicial organs coordinate the cooperation of relevant departments such as public security and transportation organs, and use big data to discover vehicles hidden by bankruptcy liquidation enterprises or occupied and used by others for other reasons. In addition, even if the bankruptcy liquidation case has been completed, and even some bankruptcy liquidation enterprises have been deregistered, creditors can also request the court to make additional distributions in accordance with the bankruptcy estate distribution plan within two years after the conclusion of the case, so these vehicles that originally belonged to the bankruptcy liquidation enterprise should not be abandoned for tracing within the above period.

(This article is translated by software translator for reference only.)