Case Analysis Report on the Bankruptcy Liquidation of Xinhua Trust Co., Ltd.

Abstract

The bankruptcy liquidation case of New China Trust Co., Ltd., as the first nationwide case of a trust institution's bankruptcy liquidation, was accepted by the Chongqing No. 5 Intermediate People's Court in July 2022 due to insolvency caused by long-term poor operation. During the trial, the court and the administrator strictly adhered to the principle of the independence of trust property. By categorically disposing of 34.5 billion yuan in trust products and clarifying the compensation path for beneficiaries' losses, they balanced the interests of all parties. Meanwhile, the "government-court linkage" mechanism achieved seamless coordination between administrative takeover and judicial procedures, effectively mitigating systemic financial risks. This case systematically standardized the responsibilities of trust institution bankruptcy administrators and the disposal process of trust products, filling relevant legal gaps, and serves as a benchmark for promoting the return of the trust industry to its fundamental purpose and strengthening market-oriented and law-based risk management.