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Recently, the renowned international legal business rating agency, LegalOne, announced its "2023 Outstanding Cases." Senior partner Zhang Li Esq. from Beijing JAVY Law Firm was recognized for his representation in the "Creditor's Lawsuit Against Tianlong Company Ordinary Bankruptcy Claims Confirmation Dispute Case" and was listed on the LegalOne Merits as "Remarkable."

In this case, Mr. Wang is an investor and creditor of Tianlong Company, headquartered in Shunping County, Hebei Province. After Tianlong Company entered bankruptcy proceedings with a liquidation rate of less than 30%, Mr. Wang faced the threat of being unable to recover his investment. His creditors were at risk as the bankruptcy administrator classified his 9.3 million RMB loan claim as subordinated debt due to suspicions of false capital contribution, potentially preventing him from recovering the 9.3 million RMB.

Mr. Zhang served as Mr. Wang's legal counsel, initiating legal proceedings in bankruptcy court to protect his rights as a creditor. Mr. Zhang presented evidence to the judge that Mr. Wang's rights had been confirmed through arbitration, with no evidence of misconduct on his part. Ultimately, both the first and second-instance courts determined Mr. Wang's claim as an ordinary debt, granting him the right to recover his investment under Chinese bankruptcy law.

In recent years, an increasing number of Chinese courts have adopted the "Equitable Subordination Rule," also known as the "Deeprock Principle," when ruling on cases. According to this rule, if a creditor's claim is deemed defective, the bankruptcy court may categorize it as subordinated debt. However, due to the lack of uniform standards, this rule is often misapplied, undermining the effectiveness and judicial fairness of the bankruptcy process. Mr. Zhang’s arguments received judicial support, preventing the erroneous application of the rule and securing victory for his client.

The quality of handling bankruptcy cases has become a crucial indicator for assessing a region's business environment. The significance of this case lies in its broader implications, revealing the underlying logic of the application of the "Deeprock Principle." Currently, in the context of protecting the interests of the majority and promoting social harmony, voices advocating for the protection of honest investor rights are relatively weak. Emphasizing such considerations in individual cases contradicts judicial fairness and damages the business environment of the region.

This case is relatively rare in China and is groundbreaking. It also holds certain reference value for the future revision of the "Enterprise Bankruptcy Law of the People's Republic of China."