On February 28, 2024, the People's Court of Pudong New Area in Shanghai accepted the bankruptcy reorganization of Shanghai Dongying Real Estate Co., Ltd. ("Dongying") and appointed JunHe’s Shanghai office as the bankruptcy administrator. On October 24, 2024, the People's Court of Pudong New Area approved the reorganization plan that was passed at the creditors' meeting by a majority of affirmative votes. (See: JunHe Deals | JunHe Assists Dongying in the Court Approval of its Reorganization Plan).
Before the reorganization plan was approved, the administrator received a loan of RMB 130 million in the form of a debt for the common benefit. This allowed the Yipin Yayuan project developed by Dongying (Yipin Yayuan was the registered name and Binjiang Yipinyuan was its promotional name ) to resume construction on April 10, 2024, after a two-year suspension.
According to the reorganization plan, the administrator was required to deliver housing by March 31, 2025, to more than 270 buyers who had signed legally valid Shanghai Commodity Housing Pre-sale Contracts and paid the full amount. Since Dongying entered the reorganization process, apart from the legal representatives, no other personnel cooperated, so the administrator had to perform the duties of a real estate development company during the execution of the reorganization plan and handle the historical issues of Dongying. Under the guidance, supervision and support of the Pudong New Area government task force and the Pudong New Area court, the administrator hired a construction agency and investment supervision entity and formed a team to supervise the construction work on-site. The JunHe team worked tirelessly throughout the reorganization, construction, and delivery process.
To ensure the safety of the investment funds, the administrator, under the guidance of the district government task force, jointly supervised the specific use of the funds with the construction agency, the subdistrict where the project was located, and the fund supervision company, and formed a strict and swift approval process for the fund’s use. Based on the actual funding needs for the continuation and the reorganization plan’s execution, the administrator applied for RMB 450 million of beneficial debt investment funds in installments from selected investors and promptly repaid the RMB 130 million loan, to improve the efficiency and effectiveness of the use of the debt proceeds.
Regarding the project’s resumption and the continuation management, the administrator and the construction agency stayed on-site to guide the construction work, fully accelerating the schedule while ensuring safe and civilized construction and making sure that no construction accidents occurred. Since most of the construction entities were also creditors in this case, with many pre-reorganization project payments unsettled, the administrator explained the bankruptcy reorganization process and the reorganization terms to each construction entity, seeking their understanding, while fully paying the new project payment beneficial debts incurred after the reorganization, and setting up rush work rewards to enhance the cooperation of the construction entities.
The Yipin Yayuan project had been suspended for nearly two years by the time the bankruptcy reorganization application was accepted. The delivery of the housing for the first batch of buyers had been delayed for over four years, and the buyers were very dissatisfied. The administrator established multiple communication channels such as WeChat official accounts, WeChat, phone, and emails to ensure the buyers' right to information. We accepted inquiries from owners around the clock, fully understood their needs, and met all reasonable demands as much as possible. The administrator held weekly petition meetings in the subdistrict where the project is located, informed buyers of the project’s progress and answered questions, allowing the purchasers to understand the progress of the case. This not only resolved buyers' concerns and misunderstandings but also enhanced their confidence in the reorganization, the project’s continuation and its delivery.
Through a public bidding process and as approved by the Pudong court, the administrator arranged for the property service provider to meet with the owners’ representatives, and demanded the property service provider investigate, collect, and integrate the owners’ demands. They also conducted surveys on the owners' expectations for future services. The property service provider dispatched a team of engineering, housekeeping, security, and cleaning personnel to the Binjiang Yipinyuan project to assist the administrator in conducting pre-viewing, parking space lotteries, payments, and other work. The administrator coordinated the communications between the construction agency and the property service provider to ensure timely responses to and quick repairs of the issues found after the housing was delivered to the owners, aiming to give the owners peace of mind, reassurance and comfort.
Through the diligent work of the administrator and through the guidance of the Pudong New Area task force and the Pudong New Area court, a comprehensive completion acceptance certificate was obtained for the Yipin Yayuan residential project on March 21, 2025, and then a new residential housing delivery permit was obtained on March 27, 2025. On March 28, 2025, the delivery of the Yipin Yayuan residential project started ahead of schedule. On April 30, the centralized delivery was completed with the assistance of the property service provider and the construction agency. The delivery work has now been more or less completed.
The JunHe team was recognized by the Pudong New Area government task force, the court, creditors, investors and other stakeholders. On March 31, 2025, the owners’ representatives presented JunHe with a banner made in the name of all the owners, praising the administrator thus: "For upholding integrity and innovation: tirelessly ensuring delivery of overdue housing projects and setting a benchmark for legal relief"
JunHe partner LIU, Zhengdong led the team in this project, and counsel LIU, Xin was responsible for the execution of the reorganization plan. JunHe partners LI, Chenghao and DONG, Ming, and counsel WU, Ling also provided strong support for the execution of the reorganization plan.