On August 18th, the JSTE liquidation group released a notice regarding the next steps in the self-liquidation process of JSTE Electronic Technology (Dongguan) Co., Ltd., citing the reasons for the company's application for bankruptcy reorganization.
The full contents of the report are as follows:
To all creditors of JSTE Company:
Combining the actual progress of JSTE company's self-settlement work, the liquidation team has currently submitted an application for bankruptcy reorganization to the Dongguan Intermediate People's Court in accordance with Article 237 of the Company Law of the People's Republic of China, Article 2 and Article 70 of the Enterprise Bankruptcy Law of the People's Republic of China. Currently, the online application for case filing has been approved, and the offline mailing of documents is still in the review process.
Question One: Why did the self-liquidation transition to bankruptcy reorganization?
Answer: Article 237 of the Company Law states that "If the liquidation team, after clearing the company's assets, preparing the balance sheet and inventory, discovers that the company's assets are insufficient to settle its debts, it shall apply for bankruptcy liquidation to the People's Court in accordance with the law. After the People's Court accepts the bankruptcy application, the liquidation team shall transfer the liquidation affairs to the bankruptcy administrator designated by the People's Court.
Question 2: What are the advantages of a bankruptcy reorganization program compared to liquidation by the debtor?
The repayment rate for creditors has clearly increased.
Through restructuring, the repayment rate of creditors can be improved, potentially resulting in higher repayment amounts compared to liquidation. Bankruptcy restructuring, through methods such as debt restructuring and asset reorganization, aims to restore the profitability of a company, ultimately increasing the repayment rate for creditors.
Furthermore, it can better protect the interests of all creditors.
In the bankruptcy restructuring process, creditors can play a more active role in the formulation of the restructuring plan, making the asset liquidation process more fair and transparent.
Beneficial for the sustainability and protection of the value of the company.
Reorganization in bankruptcy can help businesses preserve their market resources and commercial value, especially for those with unique business assets or qualifications and licenses that are difficult to transfer. It can help maintain a company's market position and brand value while also protecting their relationships with customers, suppliers, and other business partners.
This will be more beneficial for attracting restructuring investors.
Bankruptcy reorganization is a quasi-judicial procedure that, compared to liquidation procedures, is advantageous for quickly resolving conflicts between creditors and debtors, as well as for attracting investors to the reorganization process and protecting their interests.
Question three: What do JSTE creditors need to do currently?
Please be patient and wait for the next announcement or notification from the Dongguan Intermediate People's Court. If JSTE company enters bankruptcy reorganization proceedings, the relevant procedures will be followed accordingly. The bankruptcy administrator will fulfill their duties in accordance with the relevant laws and continue to advance the matters related to debt repayment.
JSTE Electronic Technology (Dongguan) Co., Ltd. liquidation team
August 18th, 2024
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