How to Handle Unsettled Creditor's Rights During Company Liquidation and Deregistration
2025 02/26
In early 2019,a court accepted Company A's enforcement application against Company B.In August 2019,the court terminated the current enforcement proceedings after finding no executable assets of Company B.In September 2020,Company A was dissolved through shareholder resolution and completed deregistration after liquidation.The liquidation report stated that"all company debts and claims have been settled,and remaining assets have been fully distributed as of August 31,2020,"but failed to address the claim against Company B.
Surprisingly,the court successfully seized over 200,000 yuan from Company B in 2023.Shareholders C and D of Company A immediately applied to have themselves substituted as the enforcement applicants.The court rejected their request under Article 7 of the Supreme Court's Provisions on Alteration and Addition of Parties in Civil Enforcement,holding that the claim had not been explicitly allocated in the liquidation report.
However,the superior court granted their petition under Article 4 of the same provisions,reasoning that post-liquidation recovered assets should be distributed to shareholders according to company law.The conflicting rulings stemmed from the liquidation report's failure to specify this pending claim.Had the claim been properly allocated to shareholders in liquidation documents,the substitution request would have been approved under either article.
This case demonstrates that when dissolving a company with unexecuted but judicially confirmed claims,such claims must be explicitly allocated to shareholders(or creditors)in liquidation documents to avoid future enforcement complications.
Surprisingly,the court successfully seized over 200,000 yuan from Company B in 2023.Shareholders C and D of Company A immediately applied to have themselves substituted as the enforcement applicants.The court rejected their request under Article 7 of the Supreme Court's Provisions on Alteration and Addition of Parties in Civil Enforcement,holding that the claim had not been explicitly allocated in the liquidation report.
However,the superior court granted their petition under Article 4 of the same provisions,reasoning that post-liquidation recovered assets should be distributed to shareholders according to company law.The conflicting rulings stemmed from the liquidation report's failure to specify this pending claim.Had the claim been properly allocated to shareholders in liquidation documents,the substitution request would have been approved under either article.
This case demonstrates that when dissolving a company with unexecuted but judicially confirmed claims,such claims must be explicitly allocated to shareholders(or creditors)in liquidation documents to avoid future enforcement complications.
