Linzi Court Case: Malicious Extension and Accelerated Contribution

Reference Case: Trading Company v. Chemical Company, Chemical Partnership, and Zhang Mou

If shareholders know that company debts have already arisen, or that the company has already been sued, and nevertheless push contribution deadlines back through a temporary shareholders' resolution and charter amendment, the extension is ineffective against creditors. If the company cannot pay due debts, the shareholders must bear supplementary liability within the principal and interest of the originally subscribed contribution.

Holding

If shareholders know that company debts have already arisen, or that the company has already been sued, and nevertheless push contribution deadlines back through a temporary shareholders' resolution and charter amendment, the extension is ineffective against creditors. If the company cannot pay due debts, the shareholders must bear supplementary liability within the principal and interest of the originally subscribed contribution.

Issues

malicious extension of contribution deadlinesaccelerated contributionsupplementary creditor recovery