Recently, the case was co-hosted by partner lawyers from Beijing Dacheng (Shanghai) Law Firm.Wu MingLawyer, Partner (in registration)Shen JunjieIn a case where four Chinese unsecured creditors filed a claim in the management process of a UK company, the administrator successfully confirmed the full amount of the claim.

Dacheng's clients are four manufacturing enterprises from mainland China, which have been manufacturing fashion items for a century-old British brand company and are the Chinese suppliers for the UK company. However, in 2023, the four Chinese companies suddenly received an email from a British law firm, informing them that three lawyers from that firm had been appointed as administrators of the UK company. Due to financial difficulties and inability to repay debts, the board of directors of the UK company had passed a resolution to enter a bankruptcy process known as 'Administration'. After entering administration, the administrator will take over the company, and their work mainly includes efforts to sell the company's valuable assets (such as trademarks and inventory in this case) to recover funds for debt repayment, and they will also attempt to reach a deferred repayment plan with creditors to revitalize the company and prevent its bankruptcy dissolution. However, if during the administration process, the company still cannot repay all debts and fails to reach an exemption or other repayment plan with creditors through the administrator's efforts, the company will be liquidated.

The total amount of claims from the four Chinese companies exceeds £10 million. To effectively respond to the UK administration process, the clients fully entrusted the Wu Ming lawyer team from our firm to represent and participate in all matters related to the administration process.

After taking the case, Dacheng lawyers thoroughly reviewed all documents sent by the administrator, including the administrator's disclosure report (pre-restructuring sale in the administration process) and the administrator's proposal, and then informed the clients about the subsequent matters in the administration process, assisting them in analyzing the UK company's asset-liability situation, the reasonableness and doubts of the pre-restructuring plan, and the expected distribution and ranking of creditors. Since the amount of claims confirmed by the administrator was only £3 million, which was a huge difference from the £10 million informed by the clients, Dacheng lawyers immediately communicated fully with the clients to clarify the details of the claims and comprehensively collected the corresponding supporting materials held by the clients, such as relevant contracts/orders, waybills, invoices, etc., with particular emphasis on distinguishing between delivered goods, in-transit goods, goods that have been produced but not yet shipped, orders for materials that are ready for production, and whether there are any goods among the above that have 'retained ownership'.

As the agents for the four clients, Dacheng lawyers, after organizing the relevant production and transaction vouchers, filled out and submitted the creditor's claim form, creditor questionnaire, and supporting evidence materials on the administration process's declaration website. They communicated, in writing, inquiries and challenges regarding the information disclosed in the administrator's disclosure report (pre-restructuring sale in the administration process), the administrator's proposal, and other disclosures. After receiving new materials from Dacheng lawyers, the administrator still only confirmed part of the claim amount and provided written opinions and reasons. Dacheng lawyers promptly rebutted and questioned the administrator's new opinions and reasons, clearly providing new rebuttal evidence, asserting that the full amount of the claims should be confirmed.

Through the professional reasoning and efforts of Dacheng lawyers, the administrator ultimately fully accepted Dacheng lawyers' views in the administration process and confirmed the claim amount of over £10 million filed by the four Chinese unsecured creditors. Recently, the clients have received distribution payments based on the final distribution plan, successfully maintaining their rights based on the full claim amount we asserted.

This case was handled by Dacheng lawyers for Chinese clients under the UK law administration process. Although it involves non-litigation matters related to UK bankruptcy and administration, since the clients and various evidence are in China, a lawyer team with dual qualifications and practical experience in both China and the UK handled this case, allowing for effective communication with Chinese clients through meetings and friendly negotiations with the UK administrator to exchange professional opinions, without any language barriers or misunderstandings of UK law. The high level of professional ability and sincere service attitude demonstrated by Dacheng lawyers in such cross-jurisdictional matters has won unanimous praise from clients.

This case was co-hosted throughout by partner lawyers Wu Ming and Shen Junjie.