Chapter IX
Compromise
Article 95 A debtor may, according to the provisions of this Law, directly apply with the people's court for compromise; and he may do so after the people's court accepts the application for bankruptcy and before it declares the debtor bankrupt.
To apply for compromise, the debtor shall present the draft of a compromise agreement.
Article 96 Where upon examination, the people's court deems that the application for compromise conforms to the provisions of this Law, it shall rule on a compromise, announce it and hold a creditors' meeting at which to discuss the draft of a compromise agreement.
The creditor secured by the specific property of the debtor may exercise his right from the date when the people's court rules in favor of compromise.
Article 97 A resolution on a compromise agreement shall be adopted at the creditors' meeting with the consent of more than half of the creditors who are present at the meeting and who have the right to vote, represent two-thirds or more of the total amount of unsecured claims.
Article 98 Where a compromise agreement is adopted at the creditors' meeting, it shall be subject to decision by the people's court to confirm it and terminate the procedure for compromise, and the people's court shall announce the matter. The administrator shall hand over the property and business operations to the debtor and submit to the people's court a report on the performance of his duties.
Article 99 Where the draft of a compromise agreement is not adopted at the creditors' meeting, or the draft, though adopted at the meeting, is not confirmed by the people's court, the people's court shall decide to terminate the procedure for compromise and declare the debtor bankrupt.
Article 100 A compromise agreement that is confirmed by the people's court shall have a binding force on the debtor and all the creditors involved in the compromise.
A creditor involved in the compromise refers to a party that, at the time when the people's court accepts the application for bankruptcy, holds unsecured claims against the debtor.
Where a creditor involved in the compromise fails to declare his claims according to the provisions of this Law, he shall not exercise his right during the period when the compromise agreement is being honored. However, after the complete implementation of the compromise agreement, he may exercise his right according to the conditions for repayment as stipulated by the compromise agreement.
Article 101 The right enjoyed by the creditor in favor of the compromise against the debtor's guarantor and joint-and-several debtors shall not be affected by the compromise agreement.
Article 102 A debtor shall pay off his debts according to the conditions stipulated by the compromise agreement.
Article 103 With respect to a compromise agreement that is established through fraud or other illegal acts on the part of a debtor, the people's court shall decide to invalidate it and declare the debtor bankrupt.
Under the circumstances as specified in the preceding paragraph, the payment that a creditor involved in the compromise receives due to the honoring of the agreement shall not be returned, provided that it is in the same proportion as that received by the other creditors.