Asset Repossession

Judicial Order

Statutory procedures govern the seizure of property in cases of contractual breach. To ensure a lawful asset repossession, a creditor often obtains a preservation order from a local court before moving equipment from a debtor’s premises. The Supreme People’s Court clarifies that forcible entry without judicial oversight is prohibited.

This protection ensures that the recovery does not violate the rights of other tenants in a shared industrial space.

Contractual Right

Security agreements often specify the right to seize property without a separate lawsuit for every breach. For a successful asset repossession, the lender relies on a pre-existing interest registered with the Unified Register of Movable Property Financing. This registration provides notice to other creditors and establishes priority in the event of multiple claims.

If the debtor objects during the process, the creditor must stop and seek judicial assistance to avoid potential liability.

Administrative Obstacle

Resistance from local industrial zone managers can hinder the physical removal of equipment even when a court order is present. Because asset repossession often involves heavy machinery, the logistics of transport require cooperation from the site where the goods are located. Local officials might prioritize the continuity of factory operations over the rights of an outside creditor.

These delays force the creditor to engage in further negotiations or seek higher-level judicial intervention to complete the recovery.