Is the bank loan still used to repay the bankrupt company?
[Lawyer's reply] Bank loans usually need to be repaid after the company goes bankrupt. The following is your detailed analysis: Repayment with company property As an independent legal person, the company has independent property rights. When the company goes bankrupt, it will carry out bankruptcy liquidation according to legal procedures. In this process, the company's assets, including fixed assets (such as plant, equipment, etc.), current assets (such as cash, deposits, etc.) and other property rights, will be comprehensively cleared. The assets obtained from liquidation will be distributed in accordance with the legal liquidation order. Bank loans, as debts of the company, belong to the category that needs to be repaid. Generally, bankruptcy expenses and co beneficial debts are paid first, and then if there is any remaining property, it will be used to pay off ordinary creditor's rights such as bank loans. Under special circumstances, shareholders shall bear responsibilities Under certain special circumstances, shareholders may be liable for repaying the company's bank loans: Inaccurate contribution of shareholders: if shareholders fail to pay their capital contributions in full in accordance with the provisions of the Articles of Association, then when the company goes bankrupt, shareholders need to make up their unpaid capital contributions to repay the company's debts, including bank loans. For example, the company's articles of association stipulate that shareholder A should contribute 1 million yuan, but only 500000 yuan was actually contributed. When the company goes bankrupt, Party A needs to make up the remaining 500000 yuan to repay debts. The shareholders abuse the independent status of the company as a legal person and the limited liability of the shareholders: if the shareholders abuse the independent status of the company as a legal person and the limited liability of the shareholders, evade debts and seriously damage the interests of the company's creditors, they shall bear joint and several liability for the company's debts. For example, shareholders confuse company property with personal property, and arbitrarily misappropriate company funds for personal consumption, resulting in the company's inability to repay bank loans. At this time, the bank has the right to require shareholders to assume repayment responsibility for the loans. Debt forgiveness Although this situation is rare, in some specific cases, banks may choose to exempt some or all of the company's loans based on their own interests or other factors. For example, after assessment, the bank believes that it is unable to recover all loans even through bankruptcy liquidation, and in order to avoid further losses and costs, it has reached a debt exemption agreement with the company or related parties. However, this situation usually requires strict approval procedures within the bank.
