In the real estate sector, disputes over nominee asset holding, historical legacy debts, and financing structure design have consistently been challenges constraining the revitalization of high-value properties. Recently, the legal teams of Partners Chen Lei, Sun Ying, and Niu Yuchen from Dacheng Shanghai respectively, acting as legal counsel for the actual property owner, successfully spearheaded the M&A restructuring and structured financing transaction for a commercial asset with a transaction value of RMB 260 million, located in the core area of Tianzifang business district, Xuhui District, Shanghai. This transaction not only successfully achieved the client's recovery of the title to the target property and its value reconstruction, but also resolved multiple historical legacy issues through an innovative legal structure, establishing an exemplary case of breaking through adversity for the industry.

Project Difficulties and Pain Points​

First, "Complex Shareholder Disputes": The target property involved multi-party nominee shareholding disputes, with long-standing conflicts between the actual property owner and the nominal owners, resulting in the asset being unable to be revitalized for an extended period. Intense conflicts of interest among shareholders, high litigation risks, and significant uncertainties hindered transaction progress.

Second, "Historical Legacy Debts and Financing Dilemmas": The target property carried multiple historical debts with complex creditor relationships, making debt restructuring difficult. Against the backdrop of tightening real estate financing, traditional financing channels were unable to meet the client's needs, necessitating an innovative financing solution.

​​Third, "Tenant Eviction and Asset Upgrade Obstacles": The property housed a large number of long-term tenants with complex lease relationships, making eviction highly difficult and directly impacting the progress of asset upgrades and renovations. Some tenants refused to cooperate with eviction or even resorted to legal measures in opposition, further increasing transaction uncertainties.

​​Fourth, "Tax Compliance and Optimization Pressure": The transaction involved multiple steps such as asset restructuring and equity transfer, demanding high tax compliance. Any lapse could potentially lead to massive tax liabilities. The client sought to maximize tax cost reduction and enhance transaction efficiency while ensuring strict legal and regulatory compliance.

Professional Value Provided by Lawyer

1. Dual Approach of Litigation and Non-litigation Negotiation to Resolve Shareholder Disputes​

* ​​Litigation Strategy:​​ Regarding nominee shareholding disputes, the team simultaneously initiated a lawsuit for shareholding confirmation. Through litigation preservation measures to apply pressure, it compelled the nominal owners to return to the negotiation table.
* ​​Non-litigation Negotiation:​​ While applying litigation pressure, the team designed a non-litigation solution integrating "Title Confirmation - Financing - Operation", successfully facilitating a settlement among shareholders and ensuring the transaction was not delayed by judicial proceedings.

2. Introducing High-Quality Investors to Break Through the Financing Dilemma​

* ​​Transaction Innovation:​​ The team deeply collaborated with a top-tier domestic PE institution to design an innovative transaction structure of "Asset Restructuring + Debt-assumption Equity Transfer + Transfer of Property with Encumbrance", successfully securing financial backing.
* ​​Financing Innovation:​​ Through structured financing design, it achieved rapid capital infusion, resolving bottlenecks associated with traditional financing channels.

3.​​ Debt Restructuring and Asset Revitalization​

* ​​Debt Restructuring:​​ For historical legacy debts, the team adopted a "Debt-assumption Equity Transfer" scheme, incorporating the debts into the transaction structure and successfully overcoming creditor resistance.
* ​​Asset Revitalization:​​ Utilizing legal techniques such as asset valuation as equity contribution and SPV equity transfer, it achieved effective asset revitalization and value reconstruction.

4. Tenant Eviction and Asset Upgrade​

* ​​Tenant Eviction:​​ The team employed a combined strategy of "Categorized Negotiation + Litigation-based Vacating", formulating customized eviction solutions for different tenant groups. It successfully completed the termination of all leases within 3 months.
* ​​Asset Upgrade:​​ By pre-embedding lease termination clauses, pre-approving construction permits, and planning brand upgrades, it ensured the immediate launch of asset upgrade renovations upon transaction completion, achieving seamless transition.

5. Tax Planning and Optimization​

* ​​Tax Planning:​​ The team fully leveraged special tax restructuring policies, designing a step-by-step implementation plan of "Asset Transfer + Equity Transfer", and reasonably applied tax exemption policies for asset transactions, saving the client over RMB 10 million in taxes.
* ​​Cost Optimization:​​ While ensuring tax compliance, it maximized the reduction of transaction costs, enhancing overall commercial efficiency.

Conclusion​

In the current era where the real estate industry is transitioning from incremental expansion to intensive management of existing stock, the Dacheng Shanghai legal team consistently provides asset appreciation solutions that transcend dispute resolution, leveraging a compound perspective of "Law + Finance + Commerce". The successful completion of this complex transaction not only resolved intricate issues such as shareholder disputes, historical debts, and tenant evictions but also realized asset value reconstruction and maximized commercial benefits through innovative transaction structuring and tax planning. Moving forward, we will continue to deepen our expertise in the intersection of real estate and capital markets, empowering asset value leaps with professional wisdom.