SPC Typical Civil/Commercial Case: Asset Management Company Henan Branch v. Trading Company
In enterprise restructuring, a newly established company cannot automatically escape liability merely because a shareholders' resolution purports to strip away the predecessor's debts. Courts should examine the assets actually received, the continuity of operations, and creditor prejudice to decide whether the restructuring arrangement unlawfully evades legacy debt and to define the successor company's liability.
Holding
In enterprise restructuring, a newly established company cannot automatically escape liability merely because a shareholders' resolution purports to strip away the predecessor's debts. Courts should examine the assets actually received, the continuity of operations, and creditor prejudice to decide whether the restructuring arrangement unlawfully evades legacy debt and to define the successor company's liability.