The Road to Rebirth for Concrete Companies

This article is reprinted from: Zhejiang Legal Daily

Correspondent Wang Jiawei, Intern Reporter Wang Fang

Recently, in Baibu Town, Haiyan County, a once silent concrete plant area has come back to life with busy traffic and nonstop mixer trucks. Previously, it was a very different scene.

In summer 2024, within this dozens-of-acres factory site, the mixers had shut down, and nearly 200 workers had not received wages for seven months. Lawsuits flooded in like snowflakes, and the company’s actual controller, Zhao, was overwhelmed—six related companies owed over 800 million yuan, with more than 200 creditors.

This group of companies, holding pre-mixed concrete qualifications and once major local taxpayers, was on the brink of collapse.

“Absolutely cannot just let it fail,” said Shen Hongyu, Deputy Secretary of the Party Committee and Executive Vice President of Haiyan County People’s Court, who understands the value of the enterprise. “Concrete companies with special qualifications are a vital part of local infrastructure. Few companies in the county hold such qualifications. Simply declaring bankruptcy and liquidation would not only revoke the qualification and cause unemployment but also result in a very low debt repayment rate.”

In July 2024, after receiving the company’s pre-reorganization application, a court-led, government-coordinated “enterprise rescue operation” was quickly launched. The Haiyan County government and Baibu Town Chamber of Commerce coordinated, and through professional review, Zhejiang Law Firm was appointed as the temporary administrator. In August, the Haiyan Court consecutively approved the pre-reorganization applications of six companies.

The primary goal of reorganization was to restart the machinery. “Qualification and customer channels are core to the enterprise. The longer production is halted, the faster the value erodes,” said the head of the temporary management. Under court guidance and town government coordination, local innovation introduced an “integrated contracting operation” model, where Jiaxing-based Building Materials Co., Ltd. took over the plant’s production and management, operating at its own risk and paying a monthly contract fee, while retaining all workers and paying part of their wages.

Overnight, the plant was back to the sound of mixer trucks. “Seeing the trucks leave the factory again, we felt relieved, thinking the company still has hope,” said veteran employee Lao Ma. The contracting operation not only stabilized the company’s asset value and preserved its scarce qualification but also generated a new “blood supply” through monthly contract fees to help settle debts.

However, a financial maze lay ahead. Although the six companies were nominally independent, their personnel, funds, and business were deeply intertwined, with a high degree of legal personality confusion. The court-guided management hired professional auditors to thoroughly investigate related-party transactions and asset commingling, and based on this, submitted a “Consolidated Reorganization Analysis Report.”

By January 2025, due to a surge in enforcement cases, these companies officially applied for reorganization. In March, after a hearing, the Haiyan Court ruled that the six companies would undergo substantive merger reorganization. “It’s like handling a tangled ball of yarn as a whole, avoiding the huge costs of asset separation, ensuring fairness, and improving procedural efficiency,” explained the presiding judge, Hu Wentao.

After the merger, the first creditors’ meeting was successfully held, and through asset management and ongoing operation plans, the enterprise’s foundation was stabilized. But issues such as past taxes, land planning, and qualification renewal emerged one after another. Led by the local government, multiple departments—including the Political and Legal Affairs Commission, Natural Resources and Planning Bureau, and Tax Bureau—held several coordination meetings to clear obstacles one by one.

Finding investors was key to the company’s revival. Through open recruitment, Jiaxing-based Building Materials Co., Ltd. stood out in September 2025 with an investment of over 117 million yuan, becoming the reorganization investor.

Balancing the interests of all parties, especially protecting numerous small creditors, became the core challenge of the reorganization plan. The court and management innovated a “staged” repayment scheme: debts below 100,000 yuan would be repaid at 30%, and debts between 100,000 and 400,000 yuan at 15%. They also adopted a “separation” reorganization approach, bundling core assets like land, equipment, and qualifications for investors to take over, ensuring the company’s survival, while non-core assets were liquidated separately to pay creditors.

By the end of 2025, at the second creditors’ meeting, the reorganization plan draft was approved by a majority vote. The Haiyan Court approved the plan and terminated the reorganization process, officially guiding this near-dead enterprise onto the path of rebirth.