The pre-reorganization-to-reorganization case of the Geo-Jade Petroleum Corporation
The pre-reorganization-to-reorganization case of the Geo-Jade Petroleum Corporation
[Keywords]
civil, bankruptcy, pre-reorganization, reorganization
[Case summary]
Geo-Jade Petroleum Corporation (Geo-Jade Petroleum), the incorporation of which was approved by Haikou Administration for Market Regulation on August 20, 1984, is a Shanghai Stock Exchange-listed company principally engaged in overseas petroleum and natural gas prospecting and exploitation businesses, including petroleum prospecting and exploitation, petrochemical project investment, and related engineering technologys development, consultation and service; the sale of petrochemical products, and pipeline production and building materials, equipment and devices; petroleum refining and petrochemical products production, sale, warehousing (excluding items requiring special approval), etc. A sufferer of the international petroleum price fluctuation and the covid-19 pandemic, Geo-Jade Petroleum found itself in liquidity crisis on April 6, 2023, when Shanghai XX Investment Holding Co., Ltd., a creditor, applied to the court for the reorganization of Geo-Jade Petroleum, on the grounds that the company failed to pay off its due debts, plainly lacked liquidity, but was of considerable reorganization value. To evaluate the companys reorganization value and reorganization viability, the court decided on the pre-reorganization of Geo-Jade Petroleum, and approved the intermediary that Geo-Jade Petroleum recommended as the interim administrator on April 20, 2023. During pre-reorganization, the interim administrator, under the oversight and guidance of the court, finished the claim declaration and examination, assets investigation, recruiting of interesting investors, and other fundamental works, and worked out a reorganization plan approved by principal creditors.
[Verdict]
On September 20, 2023, upon receiving the reply of the Supreme Peoples Court approving the reorganization of Geo-Jade Petroleum, the court made out the (2023) Qiong 01 Po Shen No. 12 civil judgement, accepting the application for bankruptcy reorganization of Geo-Jade Petroleum, and decided that the interim administrator proceeded with the companys reorganization procedure as administrator. During reorganization, the court guided and oversaw the administrator to complete the procedural connection, draft plan formulation and voting, signing of investment agreement, information disclosure, etc., and the company worked out and submitted the draft reorganization plan as scheduled. On November 2, 2023, Geo-Jade Petroleum hosted the first creditors meeting, where the draft reorganization plan was passed by voting at the creditors groups and at the investors group. On November 21, 2023, the court made out the (2023) Qiong 01 Po No. 36-1 civil judgment, which approved the reorganization plan and terminated the relevant procedures. During the execution of the reorganization plan, Geo-Jade Petroleum, under the oversight of the administrator, carried out the execution of the reorganization plan, and the completed execution works complied with the execution standards as set forth in the reorganization plan. The administrator submitted on December 29, 2023 the oversight report, and the court upon examining the report, decided that the reorganization plan of Geo-Jade Petroleum had been executed, and made out on December 29, 2023 the (2023) Qiong 01 Po No. 36-2 civil judgement, affirming the completion of the execution of reorganization plan, and terminating the reorganization procedures.
[Significance]
The pre-reorganization-to-reorganization case is the first of its type for a listed company in Hainan, as well as the first case of listed company bankruptcy reorganization in Haikou. It is the first case of listed company reorganization in which a Hainan court has applied the pre-reorganization mechanism at the reorganization application examination stage, and has successfully concluded the case. During the hearing of the case, the court made full use of the government-court linkage mechanism, communicated earnestly with the relevant regulatory authorities and superior courts before accepting the reorganization case, and ensured that the acceptance of the bankruptcy reorganization case did not lead to mass incidents or market panic; upon entering reorganization procedures, the court guided the administrator to assist by law the company to perform its obligations as a listed company to disclose information, ensuring that the company did not violate any rules concerning the disclosure of information. Meanwhile, the court made full use of the pre-reorganization-to-reorganization mechanism to convert the outcomes of pre-reorganization into reorganization results, and the case took only 43 days from the acceptance to the voting on the creditors meeting to pass the reorganization plan, greatly lowering the procedural costs. The successful reorganization of Geo-Jade Petroleum has safeguarded fairly the legitimate rights and interests of small and medium shareholders and financial creditors, effectively prevented and resolved regional financial risks through bankruptcy reorganization procedures, and is a model case of Hainan to follow the marketized, law-based principle to resolve the liquidity crisis of a listed company.
