| Case description | According to the "Cooperation Agreement" signed by the plaintiff MCC20 and the first defendant Dingxin Industry on December 21, 2006, Dingxin Industry contracted the follow-up works (expansion, installation, decoration) of the New Century Hotel project located at No. 1 North Street, Aksu City, Xinjiang to the plaintiff MCC20 for construction. The agreement stipulates that the plaintiff's scope of work covers all the contents of the subsequent engineering design drawings; The total cost of the project is 80 million yuan, but in the actual construction, if the scope or standard of the project changes due to the requirements of the defendant, the pricing of the changed part shall be based on the local quota, and the charging standard shall be 10% higher; The construction period is from March 1, 2007 to October 1, 2007; All construction funds required shall be advanced by the plaintiff; The first defendant shall unconditionally pay all the project funds before September 30, 2008, and shall not delay payment for any reason such as disputes over project quality or other aspects; If the project is delayed to start, stop or rework due to the defendant's reason, the defendant shall pay the plaintiff liquidated damages of 10000 yuan for each day of delay, and the construction period shall be postponed accordingly. If the defendant delays in payment, it shall pay the plaintiff liquidated damages for overdue payment at the rate of 0.05% of the amount of overdue payment for each day overdue. After the conclusion of the agreement, the plaintiff MCC20 and the first defendant Dingxin Industrial completed the preliminary preparatory work, and signed the project contract on the basis of the above "cooperation agreement". During this period, the second defendant, our company, and the third defendant, Chunda Hotel, respectively promised the plaintiff, MCC 20, that if the first defendant failed to pay the project funds at the time agreed in the cooperation agreement, the second defendant, our company, and the third defendant, Chunda Hotel, would bear joint liability for repayment. Now, the plaintiff MCC20 and the first defendant Dingxin Industry have a dispute over the payment of project funds. The first defendant Dingxin Industry believes that the plaintiff MCC20 has not fully fulfilled all the obligations agreed in the agreement between the two parties, and has failed to deliver the New Century Hotel project agreed in the agreement so far, so it cannot meet the payment conditions of project funds. The plaintiff MCC20 believed that it had fully fulfilled all obligations agreed in the contract, so the plaintiff MCC20 filed a lawsuit to the Shanghai Second Intermediate People's Court on October 19, 2008 on the ground of the dispute over the construction contract with the first defendant Dingxin Industry, the second defendant our company, and the third defendant Chun Hotel. The claims are as follows: 1. Order the three defendants to bear joint and several liability for repaying the plaintiff's project fund principal of 90024482 yuan; 2. Order the three defendants to bear joint and several liability for the plaintiff's shutdown loss of 1.2 million yuan; 3. Order the three defendants to bear the joint and several liability of paying the plaintiff's liquidated damages for overdue payment (calculated at 45012.24 yuan/day) of about 1.2 million yuan from October 1, 2008 to the actual payment date; 4. Order the three defendants to bear joint and several liability for the litigation costs of the case. |
| Implementation | On August 8, 2008, our company signed the Equity Transfer Framework Agreement with Hunan Hongyun Cultural Industry Development Co., Ltd. to transfer 60% of the equity of the first defendant Dingxin Industry to Hunan Hongyun Cultural Industry Development Co., Ltd. The industrial and commercial registration of the above equity transfer was completed before December 31, 2008. As of March 1, 2010, the case has not yet been heard. At present, the company is actively preparing to respond to the lawsuit with the first defendant Dingxin Industry and the third defendant Chunda Hotel, and is negotiating with the current substantive controller of Dingxin Industry Hunan Hongyun Cultural Industry Development Co., Ltd. on the recovery of the company's guarantee compensation losses. |
