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When the people's court decides to accept a bankruptcy application, the execution money that has been deducted from the account of the execution court but has not yet been paid to the applicant for execution appears to have been out of the actual control of the person subjected to execution. Can it be considered that the execution money has been paid to the applicant for execution?Or does the execution amount still belong to the bankruptcy property of the person subjected to execution?This article will reveal the answer to this question through the analysis of relevant cases. 

Referee gist

When the people's court decides to accept a bankruptcy application, the execution funds that have been deducted from the account of the execution court but have not yet been paid to the applicant for execution still belong to the bankruptcy property of the person subjected to execution; After the people's court has ruled to accept the bankruptcy application, the enforcement court shall suspend the enforcement of the property and transfer it to the court or administrator that accepted the bankruptcy case. 

Brief Introduction to the Case

1、 On March 2, 2016, in the case of contract dispute between Xu Man and Weiya Company and Sun Ran, the Supreme Court made a judgment: 1. Sun Ran should pay Xu Man RMB 173.4 million and its interest; Weiya Company shall be jointly and severally liable for Sun Ran's above debts. 

2、 On July 18, 2016, the Hainan High Court filed a case for implementation. On March 13, 2018, the court auctioned the real estate under the name of Weiya Company that Xu Man applied for seizure in the lawsuit on the judicial auction platform of Taobao. The auction price was 208 million yuan. On March 30, 2018, the Hainan High Court issued a (2016) Qiongzhi No.9-6 enforcement ruling, confirming that the real estate belongs to the buyer, Zhongke Construction Company, and the ownership will be transferred from the time the ruling is delivered to Zhongke Construction Company. 

3、 From the above auction funds, Hainan High Court paid the applicant Xu Man a sum of 111 million yuan, with the remaining 53 million yuan not yet released. 

4、 On July 18, 2018, Haikou Intermediate Court accepted the bankruptcy liquidation case of Weiya Company and appointed Hainan Weite Law Firm as the administrator on October 19, 2018. 

5、 On December 13, 2018, the Hainan High Court issued the (2016) Qiongzhi No. 32 Notice, ruling to suspend the execution of Weiya Company, and transferring the outstanding payment of over 53 million yuan from Weiya Company to the administrator on the execution case payment account of the court. 

6、 Later, the applicant for enforcement, Xu Man, was not satisfied and filed an enforcement objection with the Hainan High Court, claiming that the court made an error in the (2016) Qiongzhi No. 32nd Notice, requesting that the above notice be revoked and the execution case payment be promptly paid to Xu Man. 

7、 On February 25, 2019, the Hainan High Court issued the (2019) Qiongzhiyi No. 36 enforcement ruling, revoking the court's (2016) Qiongzhiyi No. 32 Notice. 

8、 Weiya Company and Sun Ran are not satisfied with Hainan High Court's (2019) Qiongzhiyi No. 36 enforcement ruling, and apply to the Supreme Court for reconsideration, requesting that the ruling be revoked. 

9、 After review, the Supreme Court finally ruled that the Hainan High Court's (2019) Qiongzhiyi No. 36 executive ruling should be revoked. 

Analysis of key points of adjudication

The core fact of this case is that before the debtor Weiya Company entered bankruptcy proceedings, the Hainan High Court of the enforcement court had realized the assets under the name of Weiya Company through auction procedures, and had paid most of the auction proceeds to the applicant for enforcement. After the Haikou Intermediate Court accepted the bankruptcy liquidation case of Weiya Company, the Hainan High Court ruled to suspend the execution and transfer the balance of over 53 million yuan to the administrator. Therefore, Xu Man, the applicant for enforcement, cannot continue to receive repayment, so he raised an objection to enforcement. 

The focus of controversy in this case is whether the auction money obtained through auction but not yet distributed to the applicant for execution belongs to the bankruptcy property of the person subjected to execution, given that the people's court has accepted the bankruptcy application against the person subjected to execution. If so, the amount should not be paid individually to the applicant for enforcement, but should be entered into bankruptcy proceedings for collective repayment by all creditors. 

Regarding this issue, the Supreme Court believes that: 

First, in accordance with Article 19 of the Enterprise Bankruptcy Law, after the people's court accepts the bankruptcy application, the preservation measures related to the debtor's property should be lifted, and the execution procedure should be suspended. According to this provision, if the execution procedure has not yet been concluded, the preservation measures for the property of the person subjected to execution shall be lifted, the execution procedure shall be suspended, and the outstanding amount shall not be repaid. In the event that the property of the person subjected to execution cannot repay all claims, the above provisions aim to achieve fair repayment of claims through bankruptcy proceedings. 

Secondly, Article 16 of the "Guiding Opinions of the Supreme People's Court on Several Issues Concerning the Transfer of Execution Cases for Bankruptcy Review" clearly stipulates that the execution court shall, within seven days after receiving the acceptance ruling of the transferred court, transfer the property of the person subjected to execution, such as bank deposits that have been deducted and transferred to the account, movable property actually detained, and securities, to the court or administrator that accepts the bankruptcy case. Article 17 stipulates that when the execution court receives the acceptance ruling from the transferred court, it has completed the transfer, remittance, and cash delivery of the execution funds to the applicant for execution. Due to changes in the ownership of the property, the property that does not belong to the person subjected to execution will not be transferred. "If execution funds such as bank deposits have been deducted from the account of the enforcement court, but the transfer, remittance, or cash delivery to the applicant for execution has not been completed, the ownership of the property rights has not changed, and still belongs to the property of the person subjected to execution. After the enforcement court receives the acceptance ruling from the transferred court, it shall not make any further payment to the applicant for execution, but shall transfer it to the court or administrator that accepts the bankruptcy case.". 

Thirdly, in the Reply Letter No. 72 of the Supreme Court of Justice and the People's Republic of China (2017), it is once again clear that the money that has been deducted from the account of the enforcement court but not yet paid to the applicant for enforcement when the people's court ruled to accept the bankruptcy application still belongs to the debtor's property. After the people's court ruled to accept the bankruptcy application, the enforcement court should suspend the enforcement of the property. 

To sum up, the execution funds that have entered the account of the execution court but have not yet been released and distributed to the applicant for execution shall still belong to the responsible property of the enforced person who has not completed the execution and can be used to pay off the debts of the enforced person. After the court accepts the bankruptcy application, the execution court shall suspend the execution and transfer it. 

We agree with the above reasons and views of the Supreme Court. 

Summary of practical experience

As in this case, when the debtor's property is insufficient to pay off all debts, although individual creditors took legal action first, they obtained a large amount of cash available for execution through a forced auction. However, once the debtor enters bankruptcy proceedings, individual creditors cannot monopolize the auction proceeds. This mainly involves the conflict of interest between individual creditors and all creditors. Which is better or worse, and how to solve this problem?The relevant legal rules are as follows: 

According to the provisions of Article 508, Paragraph 1, and Article 513 of the Interpretation of the Supreme People's Court on the Application of the Civil Procedure Law of the People's Republic of China, if the person subjected to execution is a citizen or other organization, and the property of the person subjected to execution is unable to pay off all claims, fair payment of the claims can be achieved through participation in the distribution process, When the person subjected to execution is an enterprise legal person, fair liquidation of the creditor's rights is achieved through bankruptcy proceedings. 

"The execution funds that have been transferred, remitted, or delivered in cash to the applicant for execution have not been the property of the person subjected to execution due to changes in the ownership of property rights.". On the contrary, if the execution funds such as bank deposits have been deducted from the account of the enforcement court, but the transfer, remittance, and cash delivery to the applicant for execution have not been completed, the ownership of the property rights has not changed, and they still belong to the property of the person subjected to execution. After the enforcement court receives the acceptance ruling of the transferred court, it shall not make any further payments to the applicant for execution, It should be transferred to the court or administrator that accepts the bankruptcy case. From the perspective of value measurement, this reflects the spirit of fair repayment to creditors. The measurement of conflicts of interest between individual creditors and all creditors should be biased towards all creditors. 

It should be noted that the Supreme Court once held that "the people's court has taken corresponding enforcement measures against the property to be enforced, and the property has been separated from the actual control of the debtor, which is deemed to have been delivered to the obligee. The execution has been completed, and the property should not be included in the bankruptcy property." "The viewpoint of" "has become outdated and no longer applies due to the issuance of the Supreme Law and People's Republic of China Document No. 72 (2017).". 

Relevant laws and regulations

Bankruptcy Law of the People's Republic of China

"Article 16 After the people's court accepts a bankruptcy application, the debtor's payment of debts to individual creditors is invalid.". 

"Article 19 After the people's court accepts a bankruptcy application, the preservation measures related to the debtor's property shall be lifted, and the execution procedure shall be suspended.". 

Provisions of the Supreme People's Court on Several Issues Concerning the Application of the Enterprise Bankruptcy Law of the People's Republic of China (II)

"Article 5 After the acceptance of a bankruptcy application, if the execution procedures related to the debtor's property are not suspended in accordance with the provisions of Article 19 of the Enterprise Bankruptcy Law, the relevant units that have taken execution measures shall make corrections according to law.". The people's court shall recognize the property that has been converted according to law as the debtor's property. 

Interpretation of the Supreme People's Court on the Application of the Civil Procedure Law of the People's Republic of China

"Article 508 If the person subjected to execution is a citizen or other organization, and after the commencement of the execution procedure, any other creditor of the person subjected to execution who has obtained the basis for execution finds that the property of the person subjected to execution is unable to pay off all his claims, he may apply to the people's court for participation in the distribution.". Creditors who have priority or security interests in property sealed up, detained, or frozen by the people's court may directly apply for participation in the distribution and claim a priority right to compensation. 

"Article 513 In the course of execution, if the enterprise legal person who is the subject of execution meets the circumstances specified in Paragraph 1 of Article 2 of the Enterprise Bankruptcy Law, the execution court shall, with the consent of one of the applicants for execution or the subject of execution, rule to suspend the execution of the subject, and transfer the relevant materials of the execution case to the people's court of the place where the subject of execution resides.". 

"Article 515 If the people's court of the place where the person subjected to execution is domiciled decides to accept a bankruptcy case, the enforcement court shall lift the measures to preserve the property of the person subjected to execution.". "If the people's court at the place where the person subjected to execution has its domicile has ruled to declare the person bankrupt, the execution court shall rule to terminate the execution of the person subjected to execution.". "If the people's court of the place where the person subjected to execution resides does not accept the bankruptcy case, the execution court shall resume execution.". 

"Article 516 If a party does not agree to be transferred for bankruptcy or the people's court in the place where the person subjected to execution is domiciled does not accept a bankruptcy case, the enforcement court shall, after deducting the enforcement costs and paying off the priority claims, pay off the ordinary claims in the order of property preservation and the sealing up, attachment, and freezing of property during execution.". 

"Guiding Opinions of the Supreme People's Court on Several Issues Concerning the Implementation of Cases Transferred for Bankruptcy Review" 

"After the enforcement court has made a decision to transfer, it shall notify all known enforcement courts in writing, and the enforcement court shall suspend the enforcement proceedings against the person subjected to enforcement.". However, the enforcement court shall promptly dispose of the seasonal commodities, fresh, perishable, and other items that are not suitable for long-term preservation of the person subjected to enforcement, and the disposal price shall not be distributed. "If the transferred court has ruled to accept a bankruptcy case, the enforcement court shall, within seven days from the date of receiving the ruling, transfer the price to the court that accepted the bankruptcy case.". "If the case meets the conditions for terminating this execution procedure, the execution court may simultaneously rule to terminate this execution procedure.". 

"After receiving the acceptance ruling of the transferred court, the enforcement court shall, within seven days, transfer the bank deposits that have been deducted and transferred to the account, the movable property actually detained, securities, and other properties of the person subjected to enforcement to the court or administrator that accepts the bankruptcy case.". 

17. When the execution court receives the acceptance ruling from the transferred court, the auction property that has been disposed of through the auction process and the transaction ruling has been delivered to the buyer, the debt repayment property that has been repaid with goods and the debt repayment ruling has been delivered to the creditor, and the execution funds that have been transferred, remitted, and delivered in cash, do not belong to the property of the person subjected to execution due to changes in property ownership, No further handover. 

Reply of the Supreme People's Court to the Chongqing High Court's Request for Instructions on Whether the Amount that has been deducted from the Account of the Enforcement Court but not yet paid to the Applicant for Enforcement before the Acceptance of the Bankruptcy Application Belongs to the Property of the Debtor and Whether the Enforcement Court Should Suspend Enforcement After Receiving the Notification Letter from the Bankruptcy Administrator ([2017] No. 72 of the Supreme People's Court)

"The money that has been deducted from the account of the enforcement court but not yet paid to the applicant for enforcement when the people's court ruled to accept the bankruptcy application remains the property of the debtor. After the people's court ruled to accept the bankruptcy application, the enforcement court shall suspend enforcement of the property.". "If the execution court continues to execute after receiving the notification letter of suspension of execution sent by the bankruptcy administrator, it shall make corrections in accordance with Article 5 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of the Bankruptcy Law of the People's Republic of China (II). Therefore, it agrees with the biased opinion of the judicial committee of your court. Due to changes in laws, judicial interpretations, and judicial policies,", The "Reply to the Request for Instructions on How to Understand Article 68 of the Supreme People's Court's Judicial Interpretation on Bankruptcy" ([2003] Min Er He Zi No. 52) issued by our court on December 22, 2004 shall be repealed accordingly. 

Reply of the Supreme People's Court on How to Understand Article 68 of the Judicial Interpretation of the Bankruptcy Law of the Supreme People's Court ([2003] No. 52, Expired)

"Before the people's court accepts a bankruptcy case, it has initiated enforcement proceedings against the debtor's property, but if the enforcement proceedings have only made an enforcement ruling after the people's court accepts the bankruptcy case, and the property has not yet been delivered to the applicant, it does not belong to the situation where the judicial interpretation refers to the completion of enforcement, and the property should be included in the bankruptcy property after the debtor is declared bankrupt.". However, the following situations should be noted: 

1、 The ongoing enforcement proceedings have not only made an effective enforcement ruling, but also performed necessary evaluation and auction procedures for the disposal of the property to be enforced. Although the relevant person has paid the consideration, at this time, the change registration procedures have not been completed, and it is not the fault of the relevant person, it should be deemed that the enforcement property has been delivered to the applicant, and the enforcement has been completed, and the property should not be included in the bankruptcy property; 2、 "The people's court has taken corresponding enforcement measures against the property to be enforced. If the property has left the debtor's actual control, it is deemed to have been delivered to the obligee. If the enforcement has been completed, the property should not be included in the bankruptcy property.". 

Court decisions

After examination, the Supreme People's Court stated in the "Opinions of the Court" section: 

"Our court believes that the main issue in dispute in this case is whether the auction money obtained through auction but not yet distributed to the applicant for execution belongs to the bankruptcy property of the person subjected to execution, when the people's court accepts the bankruptcy liquidation application for the person subjected to execution.". 

Article 19 of the "Enterprise Bankruptcy Law of the People's Republic of China" stipulates that after the people's court accepts the bankruptcy application, the preservation measures related to the debtor's property shall be lifted, and the execution procedure shall be suspended. According to this provision, if the execution procedure has not yet been concluded, the preservation measures for the property of the person subjected to execution shall be lifted, the execution procedure shall be suspended, and the outstanding amount shall not be repaid. In the event that the property of the person subjected to execution cannot repay all claims, the above provisions aim to achieve fair repayment of claims through bankruptcy proceedings. Article 16 of the "Guiding Opinions of the Supreme People's Court on Several Issues Concerning the Transfer of Execution Cases for Bankruptcy Review" further stipulates that the execution court shall, within seven days after receiving the acceptance ruling of the transferred court, transfer the property of the person subjected to execution, such as bank deposits that have been deducted and transferred to the account, movable property actually detained, and securities, to the court or administrator that accepts the bankruptcy case. Article 17 stipulates that when the execution court receives the acceptance ruling from the transferred court, it has disposed of the auction property through the auction process and the transaction ruling has been delivered to the buyer, repaid the debt with goods, and the ruling on debt repayment has been delivered to the creditor, and completed the transfer, remittance, and cash delivery of the execution funds, as the ownership of the property has changed, "Property that does not belong to the person subjected to execution shall not be transferred.". From the perspective of the provisions of Articles 16 and 17, the execution funds that have been transferred, remitted, and delivered in cash to the applicant for execution have not belonged to the property of the person subjected to execution due to changes in the ownership of property rights. "If execution funds such as bank deposits have been deducted from the account of the enforcement court, but the transfer, remittance, or cash delivery to the applicant for execution has not been completed, the ownership of the property rights has not changed, and still belongs to the property of the person subjected to execution. After the enforcement court receives the acceptance ruling from the transferred court, it shall not make any further payment to the applicant for execution, but shall transfer it to the court or administrator that accepts the bankruptcy case.". Xu Man, the applicant for enforcement, believes that the execution payment for completed transfer, remittance, and cash delivery in this provision refers to the transfer, remittance, and cash delivery by the buyer to the enforcement court, which lacks evidence and is inconsistent with the spirit of the provision. In practice, in the handling of individual cases, it was once again clarified in the Supreme Court's (2017) Reply Letter No. 72 that the amount that has been deducted from the account of the enforcement court but not yet paid to the applicant for enforcement when the people's court ruled to accept the bankruptcy application still belongs to the debtor's property. After the people's court ruled to accept the bankruptcy application, the enforcement court should suspend the enforcement of the property. "There is no need to distinguish between the proceeds of the auction or other payments that have been executed into the court's account, and the costs borne by the applicant for execution in evaluating the auction can be resolved through other means.". The announcement fee and evaluation fee advanced by Xu Man in this case have been refunded. Therefore, the execution funds that have entered the account of the execution court but have not yet been released and distributed to the applicant for execution shall still belong to the responsible property of the person subjected to execution that has not been completed and can be used to repay the debt of the person subjected to execution. After accepting the bankruptcy application, the execution shall be suspended and transferred. 

At the same time, Article 8 of the "Guiding Opinions of the Supreme People's Court on Several Issues Concerning the Transfer of Enforcement Cases for Bankruptcy Review" also stipulates that after the enforcement court makes the transfer decision, it shall notify all known enforcement courts in writing, and the enforcement court shall suspend the enforcement proceedings against the person subjected to enforcement. This provision actually moves the time point of suspension of execution forward to the time when the enforcement court makes the transfer decision. It can be clearly understood from the above provisions that when the property of the person subjected to execution is obviously unable to repay all debts, it is necessary to provide fair protection to all creditors and achieve fair compensation, which is completely consistent with the legislative purpose of the "Enterprise Bankruptcy Law of the People's Republic of China" on suspension of execution. From the perspective of value measurement, the measurement of conflicts of interest between individual creditors and all creditors should be tilted towards all creditors in order to facilitate the resolution of conflicts and disputes. In this case, during the process of obtaining the auction proceeds and distributing them through auction, Hainan High Court has been aware of the fact that relevant creditors have applied for distribution and that the proceeds are unable to repay all debts. Due to the fact that there are other applicants involved in the distribution and the possibility of bankruptcy creditor's rights distribution in this case, the remaining 53140245.5 yuan auction proceeds have not been released, In line with the spirit of the provisions of the "Interpretation of the Supreme People's Court on the Application of the Civil Procedure Law of the People's Republic of China" and the "Guiding Opinions of the Supreme People's Court on Several Issues Concerning the Implementation of Cases Transferred for Bankruptcy Review" regarding fair liquidation of creditors through bankruptcy proceedings. In the objection ruling, the Hainan High Court applied the case payment payment deadline specified in Article 10 of the "Provisions of the Supreme People's Court on the Implementation of Money and Property Management Work", assuming that the achievement time of the remaining payment payment conditions was earlier than the time when Weiya Company was accepted for bankruptcy, and considered that the payment conditions for the execution case had been met and had not been paid due to reasons other than the applicant for execution, It should not be recognized as bankruptcy property and lacks legal basis. In view of the fact that when Haikou Intermediate Court ruled to accept the bankruptcy application of relevant creditors against Weiya Company, the auction amount of 53140245.5 yuan involved in the case had not been actually paid to Xu Man, the applicant for enforcement, so it is necessary to stop individual liquidation in accordance with the spirit of relevant regulations and transfer the enforcement amount to the court or administrator that accepted the bankruptcy case, "Hainan High Court (2016) Qiongzhi No. 32 Notice is not inappropriate." 

Case Source

Hainan Weiya Industry Co., Ltd. and Sun Ran's Application for Bankruptcy Liquidation Implementation Review Class Execution Ruling Letter [(2019) Supreme Law Enforcement No. 65 and 90]

Extended Reading

Similar case 1: Anhui Yonghe Real Estate Co., Ltd. Execution Review and Enforcement Ruling Letter [(2017) Supreme Law Enforcement Supervision No. 422, Supreme People's Court]

In this case, the Supreme Court held that: "The focus of controversy in this case is whether the funds that have been executed to the court's account but have not been distributed to the applicant for execution during the execution process should be paid to the applicant for execution or transferred to the court that accepts the bankruptcy case for disposition, when the people's court accepts the bankruptcy liquidation application of the person subjected to execution.". 

Article 19 of the "Enterprise Bankruptcy Law of the People's Republic of China" stipulates that after the people's court accepts the bankruptcy application, the preservation measures related to the debtor's property shall be lifted, and the execution procedure shall be suspended. According to the spirit of this provision, if the execution procedure has not yet been concluded, the preservation measures for the property of the person subjected to execution shall be lifted, the execution procedure shall be suspended, and the outstanding amount shall not be repaid. In response, the "Reply of the Supreme People's Court on How to Understand Article 68 of the" Judicial Interpretation of the Bankruptcy Law by the Supreme People's Court "(hereinafter referred to as the" Reply ") clarifies two specific situations that should not be included in the bankruptcy property: 'First, the ongoing enforcement process not only makes effective enforcement decisions, "In addition, necessary evaluation and auction procedures have been performed for the disposal of the property to be executed, and the relevant person has paid the consideration. Although no change registration procedures have been completed at this time, and it is not the fault of the relevant person, the property to be executed shall be deemed to have been delivered to the applicant. The execution has been completed, and the property shall not be included in the bankruptcy property;"; 2、 "The people's court has taken corresponding enforcement measures against the property to be enforced, and the property has left the debtor's actual control, which is deemed to have been delivered to the obligee. The execution has been completed, and the property should not be included in the bankruptcy property." The first situation is mainly aimed at real estate that requires changes in registration procedures, while the second situation mainly determines whether the property to be enforced has been separated from the actual control of the debtor and is included in the bankruptcy property, without specifically distinguishing between types of property. The main reason why the Anhui High Court in this case determined that the money involved in the case has been delivered to the obligee is that the money involved in the case has been separated from the actual control of the debtor, which is basically consistent with the spirit of the Reply. However, the Reply was issued on December 22, 2004, with the view that the property to be executed is deemed to have been delivered to the obligee based on the boundary of "being out of the actual control of the debtor", The spirit of the relevant provisions of the "Interpretation of the Supreme People's Court on the Application of the Civil Procedure Law of the People's Republic of China" implemented since February 4, 2015 and the spirit of the "Guiding Opinions" issued by the Supreme People's Court on January 20, 2017 are not entirely consistent. 

According to the provisions of Article 508, Paragraph 1, and Article 513 of the Interpretation of the Supreme People's Court on the Application of the Civil Procedure Law of the People's Republic of China, if the person subjected to execution is a citizen or other organization, and the property of the person subjected to execution is unable to pay off all claims, fair payment of the claims can be achieved through participation in the distribution process, When the person subjected to execution is an enterprise legal person, fair liquidation of the creditor's rights is achieved through bankruptcy proceedings. Article 16 of the Guiding Opinions stipulates that the enforcement court shall, within seven days after receiving the acceptance ruling of the transferred court, transfer the bank deposits, movable property actually detained, securities, and other properties of the enforced person that have been deducted and transferred to the account to the court or administrator that accepts the bankruptcy case. Article 17 stipulates that when the execution court receives the acceptance ruling from the transferred court, the auction property that has been disposed of through the auction process and the transaction ruling has been delivered to the buyer, the debt repayment property that has been repaid with goods and the debt repayment ruling has been delivered to the creditor, and the execution funds that have been transferred, remitted, and delivered in cash have been completed, as the ownership of the property has changed, "Property that does not belong to the person subjected to execution shall not be transferred.". From the perspective of the spirit of Articles 16 and 17, the execution funds that have been transferred, remitted, and delivered in cash to the applicant for execution are not the property of the person subjected to execution due to changes in the ownership of property rights. "If execution funds such as bank deposits have been deducted from the account of the enforcement court, but the transfer, remittance, or cash delivery to the applicant for execution has not been completed, the ownership of the property rights has not changed, and still belongs to the property of the person subjected to execution. After the enforcement court receives the acceptance ruling from the transferred court, it shall not make any further payment to the applicant for execution, but shall transfer it to the court or administrator that accepts the bankruptcy case.". The relevant provisions of the Interpretation of the Supreme People's Court on the Application of the Civil Procedure Law of the People's Republic of China and the Guiding Opinions reflect the spirit of fair repayment to creditors. "From the perspective of value measurement, the measurement of conflicts of interest between individual creditors and all creditors should be biased towards all creditors in order to facilitate the resolution of conflicts and disputes." 

Similar case 2: Li Lixia and Kangda Precision Gear Co., Ltd. Civil Judgment of the Second Instance on the Dispute over the Right to Recall [(2020) Yuminzhong No. 859, Henan Higher People's Court]

In this case, "According to the Interpretation of the Supreme People's Court on the Application of the Civil Procedure Law of the People's Republic of China," Article 508, Paragraph 1, and Article 513 provide that if the person subjected to execution is a citizen or other organization, and if the property of the person subjected to execution is unable to pay off all the claims, the fair payment of the claims can be achieved through participation in the distribution process, while if the person subjected to execution is a corporate legal person, the fair payment of the claims can be achieved through bankruptcy proceedings. Article 16 of the Guiding Opinions of the Supreme People's Court on Several Issues Concerning the Transfer of Execution Cases for Bankruptcy Review stipulates that the execution court shall, within seven days after receiving the acceptance ruling of the court to which the transfer is made, transfer the bank deposits, movable property actually detained, securities, and other properties of the person to whom the transfer has been made to the court or administrator that accepts the bankruptcy case. Article 17 stipulates that when the execution court receives the acceptance ruling from the transferred court, the auction property that has been disposed of through the auction process and the transaction ruling has been delivered to the buyer, the debt repayment property that has been repaid with goods and the debt repayment ruling has been delivered to the creditor, and the execution funds that have been transferred, remitted, and delivered in cash have been completed, as the ownership of the property has changed, "Property that does not belong to the person subjected to execution shall not be transferred.". The above provisions clearly define whether the execution funds have been delivered as the standard for determining the ownership of property rights, The reply letter of the Supreme People's Court to the Chongqing High Court's "Request for Instructions on Whether the Funds that have been deducted from the Account of the Execution Court but not yet paid to the Applicant for Execution before the Acceptance of the Bankruptcy Application belong to the Debtor's Property and Whether the Execution Court Should Suspend Execution After Receiving the Notification Letter from the Bankruptcy Administrator," i.e. the (2017) Supreme People's Court's Reply No. 72, It is consistent with the value orientation of the above judicial interpretations and guidance. "Therefore, the land auction funds of Kangda Company that have not yet been delivered to the applicant for execution during the execution process still belong to the bankruptcy property."