The liquidation case of Shanghai Quantuo Real Estate Brokerage Co., Ltd. (hereinafter referred to as "Quantuo Real Estate"), a major real estate agency for which Llinks lawyers served as the Bankruptcy Administrator (Liquidator), has been selected as a showcase case by the Shanghai Bankruptcy Court. This bankruptcy liquidation case involved RMB 470 million in debt and over a hundred disputes. Under the guidance of the Shanghai Third Intermediate People's Court and through the joint efforts of the Administrator, creditors, debtors, and other parties, the case ultimately achieved full repayment of employee wages and tax claims, and the repayment rate for ordinary creditors was raised to approximately 20.72%.

Triple Challenges Faced by Llinks Lawyers as the Bankruptcy Administrator:

I. Severe Difficulties in Asset Verification

Due to the nature of the real estate brokerage business, Quantuo Real Estate had hundreds of highly decentralized branches and stores (described as 'single-entry, single-unit') across Shanghai. Many of these stores faced numerous disputes, including expiring leases, conflicts related to construction and operations, and intermediary contract disagreements, resulting in a massive workload for asset verification and extremely high costs for communication and on-site visits.

II. Creditor Claim Review Required Extra Prudence

Quantuo Real Estate adopted an operating model characterized by "small registered capital and large operating investment." Its operating funds were highly dependent on loans from shareholders or affiliated parties, involving substantial amounts. The legal classification of these related loans had a significant impact on other ordinary creditors.

III. Challenges in Debt Collection

Due to the company's cessation of operations and lack of oversight in its final phase, a large number of brokers engaged in the "jumping-the-gun" phenomenon (circumventing the agency to complete deals directly), and there were also large sums involving individual preferential repayments. The issue of debt collection was therefore quite challenging.

Llinks Lawyers Wisely Resolve the "Liquidation Dilemma"

Leveraging rich professional experience and a deep understanding of regulatory rules, Llinks lawyers assisted Quantuo Real Estate in categorizing disputes by type and implementing targeted responses:

Store Lease Disputes: The team systematically reviewed the situation of each store and developed a comprehensive non-litigation resolution plan based on the case facts.

Decoration/Construction Disputes: The team communicated and provided reasonable defense based on factors such as project progress, construction qualifications, and warranty periods to determine the company's actual payment liabilities.

Labor Disputes: The team clarified the rights and obligations between the company and third-party labor dispatch companies to strictly define the responsibilities for compensation payment.

Through this "categorization + strategy" approach, Llinks lawyers appeared in court more than 70 times, handling cases involving 17 courts and labor arbitration institutions both within and outside Shanghai, allowing Quantuo Real Estate's various conflicts and disputes to be resolved one by one.

The case lasted two years, and its innovative practices offer three levels of demonstration significance for similar corporate bankruptcies, providing a vivid example of optimizing the business environment.

In bankruptcy liquidation, efforts should be focused on analyzing the special characteristics of the bankrupt enterprise and formulating targeted strategies to resolve existing conflicts and disputes.

For enterprises operating with "small capital and high leverage," key attention must be paid to reviewing the reasonableness of related-party claims to prevent damage to creditor interests.

The exploration of measures such as 'Model Litigation' and 'Non-litigation Collection' can achieve a balance between efficiency and results.

Llinks Engagement team:

Amy Ren, Partner

Shawn Xu, Partner

Kevin Zhang, Associate