Mergers And Acquisitions: Who Moved The Cheese?

Mergers and Acquisitions: who moved the cheese?

In Feidong County, Hefei City, Anhui Province, a large number of enterprises revolve around a bankrupt enterprise.

But this may not be the final ruling, as Han Hongliang, chairman of the Anhui Feida synthetic fiber Limited company (hereinafter referred to as "Anhui Feida"), said in an interview with reporters, "we have put forward the application for reconsideration, and will also participate in the auction section after that.

As long as there is no exceptional accident, we are determined to win. "

A bankrupt enterprise involved many in bankruptcy.

The bankruptcy case stems from the Binzhou Oriental Chemical Fiber Co., Ltd. (hereinafter referred to as "Oriental Chemical fiber") in June 6, 2008, in Hefei auction in the way of Anhui Huayuan Chemical Fiber Co., Ltd. (hereinafter referred to as "Anhui Huayuan") 71.36% of the equity and Anhui Feida 100% stake.

Dongfang Chemical fiber is a subsidiary of Shandong Oriental carpet Group Co., Ltd. (hereinafter referred to as "Oriental carpet"). In recent years, China's woven carpet market has developed rapidly, and Eastern rugs are also looking for investment opportunities. The company is a famous brand enterprise in China's carpet industry, ranking third in the same industry, with international advanced equipment, first-class production technology and research and development level, the existing assets scale is 1 billion 500 million yuan, and the annual output value is 1 billion 300 million yuan.

After many investigations, the eastern carpet saw the development opportunities of Hefei and the preferential investment policies of local governments. Therefore, through its subsidiary subsidiary, Dongfang Chemical fiber, the two local textile enterprises were accepted.

Through this acquisition, the layout plan of Oriental carpet is to build 3 yuan to 500 million yuan in Hefei Feidong Longgang Industrial Zone in 2 to 3 years to establish a chemical fiber raw material base for woven carpet industry.

"But after takeover, it was found that one of the pferee companies, Huayuan, Anhui, had problems such as insolvency, confusion in management and so on. It was difficult to start production normally, while Anhui Feida achieved better asset quality. For this reason, Donghua chemical fiber decided to implement bankruptcy liquidation in Anhui Huayuan, and in the future, relying on Anhui Feida, it will invest, produce and operate in the economic development zone.

Orient chemical fiber responsible person told reporters.

Anhui Huayuan was declared bankrupt by the court in August 17, 2009. Before that, the Feidong County People's Court issued a settlement agreement in December 25, 2008 on the basis of the December 25, 2008 agreement signed by Anhui Huayuan and Anhui Feida in December 26, 2008. (2008) the Feidong ruling No. 572-1 civil ruling, ruled that Anhui Huayuan's nearly 20000 square meters of factory buildings and land, Ruifeng business vehicle (license plate number Wan A95881) and other properties to assess the price of 10486173.28 yuan to compensate for the 9944213.2 yuan debt owed to the executor Anhui Fei Da.

The ruling also states that "two application executors, Anhui Feida Synthetic Fiber Co., Ltd., pay the Executive Yuan Anhui Huayuan Chemical Fiber Co., Ltd. RMB 541960.08 yuan."

The decision has been settled, but the problem of the property rights and interests of the bankrupt enterprise has not ended.

In June 8, 2010, the people's Court of Feidong county made a decision again, "to withdraw the civil ruling of Feidong County People's Court (2008) Feidong's word 572-1".

Three points become a thread.

The judgment has been issued, but it is a twists and turns, mainly involving the distribution of interests of many creditors.

Before the failure of Huayuan in Anhui, the creditors of the company were not only one in Anhui, including the Jingwei Textile Machinery Limited by Share Ltd Yichang textile machinery branch (hereinafter referred to as "Jingwei Textile") and the Huizhou Merchants Bank Hefei branch.

During the period, the two companies raised objections to the affirmation issued by the people's Court of Feidong County, but they were all rejected.

The two creditors are not satisfied with the ruling made by the people's Court of Feidong county.

Jingwei Textile and Hefei branch of Huizhou Merchants Bank have submitted an objection to the people's Court of Feidong County, Hefei City, Anhui province. It is considered that the Feidong County People's Court (2008) Feidong ruling No. 572-1 civil ruling verdict that Huayuan company paid off debts in arrears due to material debts, and they should participate in the distribution, so the people's Court of Feidong county held a hearing in March 12th.

One of the focuses: how to allocate multiple creditors' interests? Anhui Huayuan is already an insolvent company. How to allocate the bankrupt property of the company is the focus of every creditor.

At the hearing held by the court in March 12th, reporters obviously felt the confrontation and duel of several parties in the distribution of bankruptcy property.

On the hearings, the two enterprises of Jingwei Textile and Hefei branch of Huizhou Merchants Bank have repeatedly suggested that their enterprises have applied for compensation in front of Anhui Feida to Anhui Huayuan. Among them, Huizhou Merchants Bank Hefei branch had made many representations to Feidong court in June 2008, and the two enterprises should be cleared before Anhui Feida.

But no reply was received.

However, Anhui Feida reached a value of more than 1000 yuan, so it objected to the ruling made by Feidong county court.

In response, Liu Jun, an agent of Anhui Feida synthetic fiber Limited company and a lawyer of the Yellow River law firm, said that many creditors apply for a debtor and apply for participation in the distribution system. They only apply to the executed citizen or other organizations, but not to the legal person of the enlisted person.

In this case, the executed person is an enterprise legal person. Therefore, there is no legal basis for the application of the case in the case to participate in the distribution.

After consulting the relevant legal documents, the reporters found that the eighty-eighth provisions of the Supreme People's Court on Several Issues concerning the implementation of the people's Court (Trial Implementation) clearly stipulate that many creditors who have taken effective legal documents to determine the contents of the money payment shall apply to the same executor respectively. Each creditor shall be compensated in accordance with the order in which the execution court takes enforcement measures.

The focus of debate between the two sides is whether the bankruptcy property in Anhui Huayuan includes more than 30 mu of land.

The 30 acres of land were originally the property of Huayuan, Anhui. Due to the dispute between Anhui Huayuan and Anhui Feida, after the civil mediation of the court, the people's Court of Feidong county made (2007) civil mediation paper No. 127th, No. 128th, 129th, 130th, 131st and 132nd on the two words of Feidong people. After that, Anhui Huayuan and Anhui Feida reached the implementation reconciliation. The court ruled in December 25, 2008 (2008) that the 572-1 acres of land were in debt to Anhui Feida.

Both the Jingwei Company and the Huizhou Merchants Bank objected to the court. Huizhou Merchants Bank said that the Feidong County People's court made the ruling that "the conciliation statement has two claims that have not yet been paid, and that the behavior of the executor's early settlement obviously infringed on the interests of other creditors who had already applied for execution.

(2008) in the Feidong ruling Document No. 572-1, the Feidong Land Resources Bureau of Feidong Province, the land resources notice of the Feidong County Land Administration Bureau [2008] the right of land use in the 5447.8 square metre country confirmed by the 25 announcement has not yet been confirmed.

When the court did not determine the ownership of the land, the court decided to compensate the envoy for the execution of the law, so he applied for the cancellation of (2008) the 572-1 civil ruling of Feidong.

Accordingly, Feida of Anhui pointed out that the 30 acres of land had not yet been pferred to the real estate pfer procedures. However, according to the twenty-eighth provision of the People's Republic of China property law, "the establishment, alteration, pfer or elimination of property rights, due to the legal documents of the people's court, the arbitration commission or the decision of the people's government, will take effect when the legal documents or the collection decisions of the people's government take effect."

Feida of Anhui had acquired the ownership of over 30 acres of land when the ruling No. 572-1 of the Feidong word no. 2008 came into force. The ownership of 30 acres of land in Anhui Feida was not affected by the absence of registration procedures. Therefore, the 30 acres of land can not be incorporated into the bankruptcy property of Huayuan, Anhui.

Focus two: how to ensure the interests of employees. Jingwei Textile and Huizhou Merchants Bank Hefei branch objected to the reconciliation of Anhui Feida and Anhui Huayuan at the hearing, including the pfer of more than 1000 yuan of assets. The Jingwei Textile and Huizhou Merchants Bank Hefei branch drew the Feidong County People's court to withdraw (2008) the civil ruling No. 572-1 of the word "Feidong".

As for this objection, Liu Jun said that the creditor's rights advocated by Jingwei Textile were due to its business dealings with Huayuan, Anhui.

The Hefei branch of Huizhou Merchants Bank and Anhui Huayuan creditor's rights came from the loan of Anhui Huayuan bank.

According to the propositions of Jingwei Textile and two creditors of Hefei branch of Huizhou Merchants Bank, these assets will be divided by Jingwei Textile and Hefei branch of Huizhou Merchants Bank, which has nothing to do with the employees of Huayuan, Anhui.

So doing so will not play a role in ensuring the interests of workers.

According to the relevant person in charge of Binzhou Oriental Chemical Fiber Co., Ltd., according to the original plan, the 140 employees of Anhui Huayuan bankruptcy will continue to work in Anhui Feida, which has better assets quality. In the future, they will invest and produce in the economic development zone based on Anhui Feida, so as to ensure that the employees of Anhui Huayuan bankruptcy can achieve no need to wait for re employment.

But until now, bankruptcy liquidation has not yet ended, so the follow-up work can not be carried out.

In an interview, reporters learned that Feida of Anhui supported the success of bankruptcy in Anhui Huayuan, ensured the stability of the workers' feelings and prevented the accidents. The company, under the guidance of the bankruptcy court of the Hefei intermediate people's court, took the initiative in accordance with the spirit of the Supreme Court's judicial interpretation to encourage the third party to advance, and paid nearly 3 million yuan of funds.

Feidong County People's Court Executive Board Cui (sound) surnamed director told reporters that the issue of labor and employment has become an important aspect of the court's attention in the implementation of corporate disputes. To ensure the legitimate treatment of employees, a fair decision is made.

Focal point three: whether assets are pferred or not is another key point of the case is that creditors and debtors belong to a parent company, namely Oriental Chemical fiber, and the special status of the conciliation Party of this property has more suspicions for Jingwei Textile and Hefei branch of Huizhou Merchants Bank.

At the hearing, the agents of Jingwei Textile and Huizhou merchants bank respectively pointed out that Anhui Huayuan owed more than 900 yuan to Anhui Feida, but in the settlement agreement, the total value of the reconciliation property reached 1000 yuan, exceeding the amount owed.

"While other creditors have not yet received compensation, Feida, Anhui, has received more compensation than its arrears, and the property of reconciliation is not inseparable, and such a result is unacceptable to us."

The agent of Hefei branch of Huizhou Merchants Bank said.

Liu Jun did not make a positive rebuttal against the other party's query, but Liu Jun said there was not enough evidence to prove that there was a pfer of assets between Anhui Feida and Anhui Huayuan.

Liu Jun said, "after our investigation, we found that Huizhou Merchants Bank Hefei branch applied to Hefei intermediate people's court to sue Huayuan for returning its loan in Anhui intermediate people's court.

However, the case was terminated in September 2007, and the court in charge of Huayuan bankruptcy in Anhui was the Feidong County People's court. Although the Hefei intermediate court had had an exchange with Feidong County People's court for this matter, Huizhou Merchants Bank did not submit an application to Anhui Feidong Huayuan bankruptcy liquidation from beginning to end.

It is not surprising that his request has not been supported.

The Oriental Chemical fiber became a shareholder of Huayuan company in June, 2008.

As for the problem of excess arrears of assets, Liu Jun said, "the assets that determine the debt repayment amount to more than 1000 yuan, of which land accounts for about 5 million yuan; and according to the property survey report issued by the manager of Huayuan company, a bankrupt enterprise, Huayuan company has other assets (assessed) more than 1600 yuan by August 14, 2009.

Therefore, it is not the property or the main property of Huayuan company that the assets determined to pay debts are made.

Liu Jun said at the same time, "on the other hand, the other assets of the bankrupt enterprise Huayuan company, whose valuation value is more than 1600 yuan, will be sold at the end of 2009. The auction price is only 10 million yuan. If so, if the ratio of 1000 yuan in 2008 is only 1000 yuan, if it is auctioned, it will only take 6 million yuan, which is far from enough to repay debts. This does not include the price difference between the real estate market at the end of 2009 and the end of 2008."

Finally, on the case, Liu Jun said that Anhui Huayuan is already a debt paying company. Therefore, at the hearing, there are no objections to whether the company should go bankrupt, and how to distribute the property after bankruptcy has become the focus of every creditor.

So no matter how many disputes, the final conclusion will be attributed to the property of Anhui Huayuan after bankruptcy.

After hearing the hearing, the reporter interviewed the chief judge of the case. He said that it was not easy to say more about the case, and they would deal with the case fairly.

Han Hongliang told reporters on the matter, "no matter what the result is, I am optimistic about the development prospect of Hefei, and at the same time, as an asset of a company already owned by itself, whether or not it will be listed as a bankrupt asset will fight for it.

If the previous ruling is overturned, we will participate in the auction.

As long as there is no exceptional accident, we are determined to win. "

When private enterprises merge to do Datong, they need to be cautious.

Since 2007, there have been no final results. The above cases can be described as twists and turns, but such a private enterprise's capital operation is not uncommon.

Under the condition of market economy, Chinese private enterprises face fierce market competition after they have completed the primitive accumulation of capital in production and operation. It is no longer an effective way to increase market competitiveness by simply enlarging reproduction.

From accumulation of capital to concentration of capital, from industrial operation to capital operation, almost all private enterprises are quick to do "big" and "strong".

Li Guoqiang, director of the Enterprise Research Institute of the State Council Development Research Center, said that mergers and acquisitions by private enterprises are mainly to re allocate resources, extend and restructure the industrial chain, and enhance the core competitiveness.

In 2008, the acquisition of APPTEC laboratory service company in Wuxi by China's largest pharmaceutical research outsourcing service, the new pharmaceutical development Co., Ltd., was the main consideration of the acquisition.

ZOOMLION has re optimized and configured the resource company's industrial chain through mergers and acquisitions, and has been further enriched and improved. Its performance growth and anti market risk capabilities have been upgraded.

At the same time, he pointed out that it is a prerequisite for the success of the enterprises to improve the internal strength of private enterprises. The development of private enterprises is the ultimate driving force for mergers and acquisitions. Enterprises should fully study their own resource conditions, establish corporate governance structure, establish effective management system, and do well in the integration work after M & A, including establishing a new system to enhance the economic benefits of M & A enterprises, and establishing a risk prevention mechanism for M & A enterprises.

This involves three creditors' cross regional mergers and acquisitions cases for 3 years, and the case is still under trial. This newspaper will continue to pay attention to the reports and hope to finally leave a successful case for M & A in a win-win situation.