On December 30, 2024, the Zhenjiang Intermediate People’s Court of Jiangsu Province (“Zhenjiang Court“) ruled that the restructuring plan for Flower King Eco-Engineering Inc. (“Flower King“, stock code: 603007.SH) was complete and that the restructuring could formally conclude. Fangda as a member of the liquidation team served as interim administrator during the pre-restructuring phase and as administrator during the formal restructuring phase. With the guidance and support of governments, courts, and regulatory authorities at various levels, the restructuring achieved several pioneering outcomes:

• the first pre-restructuring case involving a convertible bond issuer in China
• the first — and currently only — listed company in China to fully resolve its convertible bond issues during pre-restructuring through a “voluntary conversion + early redemption” mechanism
• the first successful restructuring of a listed company in China after the issuance of the new State Council Nine-Point Guidelines (“New Nine Rules”).

On April 26, 2025, in recognition of the significance of the restructuring, the Flower King pre-restructuring to restructuring case was nominated for the 2024 “National Bankruptcy Classic Case” Award.

Flower King is registered in Danyang, Zhenjiang City, Jiangsu Province. Founded in 2003 and listed in August 2016, it became the second landscape architecture company nationwide and the first from Jiangsu Province to be listed on the main board of the Shanghai Stock Exchange. In recent years, due to external environmental factors, industry-wide volatility and adjustments to industrial policies, Flower King experienced a continual decline in performance, project construction delays and slower-than-expected cash flow recovery. The former controlling shareholder’s failure to timely repay its occupation of funds from the listed company further constrained Flower King’s financing options, which severely restricted Flower King’s core operations and development and eventually led to a liquidity crisis. Thus, the company urgently needed judicial restructuring to overcome its challenges and turn around its financial situation.

Due to Flower King’s inability to repay its maturing debts and obvious incapability of clearing off its debts, upon application by the creditor, the Zhenjiang Court decided to initiate pre-restructuring proceedings on May 12, 2022. On May 24, 2022, the court appointed the liquidation team as interim administrator, with Fangda Partners as a team member.

As of the date when pre-restructuring was accepted, Flower King had an approximate CNY 329 million outstanding balance on its convertible bonds, involving many bondholders. More important than that amount, it was the first case in China where a convertible bond issuer had entered pre-restructuring. Without any guiding precedent, it was a significant and complex challenge to resolve the risks associated with Flower King’s convertible bonds and safeguard the rights and interests of bondholders and other stakeholders.

With careful guidance and strong support from governments, courts, and regulatory bodies at various levels, Fangda collaborated with all parties to design a comprehensive solution involving “regulatory-compliant downward revision of conversion prices + maintaining specified trading and conversion periods after the commencement of restructuring + information disclosure according to legal requirements + proactive protection of bondholders’ conversion rights”. Ultimately, all issues were fully resolved during pre-restructuring through a “voluntary conversion + early redemption” of the convertible bonds. And, by February 27, 2024, all of Flower King’s convertible bonds had been delisted after being fully converted or redeemed.

On September 9, 2024, the Zhenjiang Court accepted Flower King’s formal restructuring application and appointed the liquidation team as administrator, with Fangda continuing as a member. On November 15, 2024, the court approved Flower King’s restructuring plan and concluded the formal restructuring proceedings. After accepting the administrator’s supervision report, the Zhenjiang Court, on December 30, 2024, confirmed the full execution of the restructuring plan and officially ended the restructuring process. This made Flower King the first listed company in China, after the issuance of the New Nine Rules on April 12, 2024, to initiate the formal restructuring proceedings and successfully complete the legal proceedings within the same year.

Leveraging the strong collaboration mechanism between the government and the judiciary, Flower King successfully addressed its historical issues through judicial restructuring, resolved its convertible bond and other debt problems, and prudently assessed its restructuring value as a listed company under the strict framework set by the New Nine Rules.

The Fangda team was led by partner JI Nuo as the general coordinator, with partners LI Kai and ZHANG Wang acting as executives-in-charge and members of the liquidation team. Team members also included partner Yvette LIU, counsel Penny POON, and Stone CHEN, JIANG Rui, Morissa ZHANG, Jaynie LI, ZHANG Longhao, and Evie WANG.

In addition to the nomination for the Flower King case, multiple cases led and handled by Fangda have received nominations or won awards of “National Bankruptcy Classic Case” in four consecutive years since its inauguration in 2021. Those Fangda cases that were recognized include:

• Restructuring of Dalian Shipbuilding Offshore Co., Ltd. (2021);
• Pre-restructuring to restructuring of ZK Engineering & Development Corporation Headquarters (2022);
• Recognition and assistance of the Japanese civil rehabilitation proceedings for Shanghai International Holding Co., Ltd. (2023);
• Substantive Consolidation Bankruptcy proceedings of CEFC Shanghai Group Limited (2023);
• Pre-restructuring to restructuring of Shanghai Trendzone Holding Group Co., Ltd. (2023).