China's Supreme People's Court Thursday announced new regulations
to tighten the legal processes involving bankruptcy.
The new regulations would better protect the rights of employees of
bankrupt businesses and prevent debtors from evading debts by
claiming bankruptcy, said Liu Guoguang, vice president of the
Supreme People's Court.
According to the new regulations, employees of bankrupt companies
are the preferred creditors in the process of liquidating company
debts. Employees' salaries and financial compensation due should be
treated as top priority, followed by government taxation and
creditors' rights.
By
making such stipulations, the regulations embody the principle of
protecting ordinary workers which will play a positive role in
maintaining social stability, Li said at a news briefing.
The regulations, to be implemented as of Sept. 1, also stipulate
that people suspected of making fake bankruptcy claims or found
illegally transferring property before filing for bankruptcy will
be dealt with by relevant government departments according to
law.
The regulations also clarify issues including tightening procedures
in bankruptcy cases, enhancing supervision over the trial of such
cases, and improving property distribution measures.
This is the second time that the Supreme People's Courts has
presented an overall and systematic interpretation of the law on
bankruptcy since it was formally enacted in 1988.
China has seen increasing bankruptcy lawsuits since the 1990s. From
1990 to 1997, Chinese courts at various levels dealt with a total
of 16,100 lawsuits on bankruptcy.
(Xinhua News
Agency August 2, 2002)