Guiding Case No. 163: Jiangsu Textile Industry (Group) Import & Export Co., Ltd. and Five Subsidiaries Substantive Consolidation Reorganization
Where affiliated companies display a high degree of commingling, separation of assets would be excessively costly, and separate proceedings would materially prejudice fair creditor recovery, courts may order substantive consolidation reorganization on application. After consolidation, inter-company claims are extinguished and assets are pooled for distribution in a single proceeding.
Holding
Where affiliated companies display a high degree of commingling, separation of assets would be excessively costly, and separate proceedings would materially prejudice fair creditor recovery, courts may order substantive consolidation reorganization on application. After consolidation, inter-company claims are extinguished and assets are pooled for distribution in a single proceeding.