Trust companies pioneer trillion-yuan risk disposal; asset revitalization capability becomes the key to victory or defeat

Why Do AI and Tax Issues Become the Last Deadlock in Asset Revitalization?

Reporter Lin Hanyao, 21st Century Business Herald

As Suning’s trillion-yuan debt restructuring continues to advance, risk disposal service trusts once again come into the spotlight.

According to the “Reorganization Plan” approved by the Nanjing Intermediate People’s Court, all assets of Suning Appliance Group and 37 other companies will be included in a trust plan, using “trust shares” to offset debts, achieving debt repayment and asset separation. This marks another large private enterprise leveraging the trust mechanism to seek safety and rebirth.

Since the implementation of the “Notice on Regulating the Classification of Trust Business by Trust Companies” (hereinafter referred to as the “New Regulations on Trust Classification”) in 2023, risk disposal service trusts, as an important subclass of asset service trusts, have rapidly become a key tool for resolving corporate debt risks and revitalizing existing assets, relying on institutional advantages such as trust property segregation, transaction management, and value restoration.

Data from the China Trustee Association shows that by the first half of 2025, the scale of risk disposal service trusts has exceeded 2.6 trillion yuan. From early restructurings of HNA Group and Founder Group to today’s Suning restructuring, the trust industry is playing an increasingly critical role in resolving corporate debt risks and serving the real economy.

However, behind the rapid business growth, the entire industry faces profound transformation. Current risk disposal service trusts no longer merely establish a nominal “risk isolation” structure but are fully entering deep waters—activating underlying assets and realizing their value. Confronted with lagging institutional supply, complex tax barriers, and the urgent need to enhance operational and disposal capabilities, trust companies, asset management institutions, law firms, and other participants are exploring multi-dimensional breakthroughs to jointly seek a new ecosystem for revitalizing existing assets.

Legal Lag Restricts Risk Disposal Service Trusts

According to the original “Notice on Regulating the Classification of Trust Business by Trust Companies” issued by the China Banking and Insurance Regulatory Commission, risk disposal service trusts refer to trusts where trust companies, as trustees, provide entrusted services for corporate risk disposal, establishing trusts aimed at debt repayment to creditors, thereby improving disposal efficiency.

Based on risk disposal methods, risk disposal service trusts are divided into two types:

First, Corporate Market-Oriented Restructuring Service Trusts. Trust companies, as trustees, provide entrusted services for companies facing debt crises, planning debt or equity restructuring, establishing trusts aimed at repaying corporate creditors.

Second, Corporate Bankruptcy Service Trusts. Trust companies, as trustees, provide entrusted services for companies undergoing bankruptcy reorganization, settlement, or liquidation in accordance with the “Enterprise Bankruptcy Law of the People’s Republic of China,” establishing trusts aimed at repaying corporate creditors.

In recent years, the application scope and depth of trust mechanisms in bankruptcy reorganization have continuously expanded. According to Meng Fanke of China Foreign Trade Trust, over the past seven years, 27 provincial-level regions across China have participated in the application of bankruptcy service trusts.

As risk disposal service trusts expand rapidly, the contradiction of lagging legal system supply becomes increasingly prominent.

“Trust property independence is core to the trust system, and the legal effectiveness of independence heavily depends on the publicity of property rights,” said Wu Yang, partner at Beijing Zhude Law Firm’s Financial Department and deputy director of the Wealth Law Professional Committee of the Beijing Lawyers Association. He pointed out that at the level of equity registration, most local business registration systems cannot recognize the “trust shareholding” attribute, with trust companies registered as ordinary shareholders, facing legal risks such as being added as enforcement targets, property commingling, and obstacles in state-owned asset approval.

It is understood that in April 2025, Beijing took the lead in launching the country’s first pilot registration of equity trust property. Shanghai followed in March 2026, initiating a pilot for equity trust property registration, allowing trust property to be marked in the market supervision department, clearly distinguishing trust property from the trustee’s inherent assets.

Wu Yang suggested that accelerating the formulation of a unified national trust property registration procedure and mandatorily adding a “trust property” label in business and real estate registration systems would be beneficial. Simultaneously, promoting tax-neutral reforms—clarifying that asset transfers based on legally established trust documents are not considered “transfers,” and taxing only upon actual disposal—would clear obstacles for high-quality development of risk disposal service trusts within the rule of law.

Wu Yang also pointed out that risk disposal service trusts face legal dilemmas such as blurred trustee responsibilities, lack of exit mechanisms, and compliance issues among multiple trustees.

Asset Disposal Capability Determines the Success or Failure of Trust Plans

While the lagging and blank legal system is a looming concern over risk disposal service trusts, the real test of trustees’ performance lies in the actual condition and disposal difficulty of underlying assets—this is the “deep water zone.”

Lu Xiaolei, general manager of Tianjin Jinjian Sheng Enterprise Management Co., Ltd., summarized core difficulties based on over 130 billion yuan of special asset disposals.

He pointed out that assets entering service trusts are usually ancillary or low-efficiency assets that investors did not accept during restructuring, inherently “subordinate.” These assets often have unclear ownership, devaluation, high compliance risks, and carry heavy burdens such as employee settlement and historical tax arrears.

Lu Xiaolei emphasized that tax issues are a frequently underestimated obstacle in bankruptcy service trust disposals. He noted that the original debtor companies generally have large tax arrears before bankruptcy, and new tax obligations may arise during asset disposal. Tax authorities usually require full tax payments before transferring ownership; if trust funds are insufficient to settle the arrears, the transaction cannot be completed. This “tax bottleneck” often becomes the last deadlock in asset disposal.

Therefore, simple “transaction management” can no longer meet market needs; the disposal capability of underlying assets has become a key factor in the success or failure of trust plans. As trust companies shift from traditional financing to service trusts, the “service + value-added” model is increasingly recognized industry-wide.

Taking real estate risk disposal as an example, in the context of the overall stabilization and recovery of the real estate industry, risk resolution and revitalization of existing assets have become core issues.

Shanghai Chengzhixin Enterprise Management Co., Ltd. pointed out that the core of real estate risk disposal lies in establishing an entire industry chain ecosystem, achieving resource coordination across asset, capital, disposal, and service ends. Risk disposal is not just asset monetization but a full-process closed-loop ecosystem of “asset acquisition – value restoration – disposal and realization – capital circulation.” Disposal agencies need to integrate assets, capital, disposal, and service resources to form an “investment-finance-management-exit” integrated, customized approach.

Building a full-cycle ecosystem has pointed the way forward for the industry, but how to implement this blueprint tests the professional ability and innovative wisdom of market participants. Trust companies, asset management institutions, and law firms are exploring from different dimensions, creating replicable and promotable practical models.

For example, Guomin Trust launched the “Service+” business model, based on risk disposal trust service transactional management, introducing industrial investors, allocating financial investments, issuing benefit bonds, providing relief funds, conducting asset disposal, and improving corporate governance—supporting distressed enterprises to resume production and escape difficulties.

Last year, Guomin Trust established the “Guomin Trust·Phoenix No. 20 Xiexin Restructuring Service Trust Plan,” involving nearly 70 billion yuan of creditor scale and serving over 5,000 creditors. Besides basic trust services, Guomin Trust leverages its business resources to provide technical support in investor introduction, legal and financial consulting, and other areas for restructuring enterprises.

Bankruptcy Service Trusts as Legal Tool Business

In response to difficulties during risk disposal, Tianjin Trust Asset Management Headquarters proposed that trust companies could establish trust plans as SPVs (Special Purpose Vehicles) for risky assets and cooperate with asset management firms and other institutions.

Tianjin Trust Asset Management Headquarters stated that multiple trust companies could contribute their existing risky assets, with asset management firms and other investors providing cash, forming special trust plans as risk disposal SPVs. Within a single trust plan, they could use judicial auctions and other means to resolve existing risky assets, even upgrading measures like reconstruction and repairs.

Tianjin Trust indicated that this new model could effectively address practical difficulties in risk disposal and debt-for-asset processes. First, it could isolate problematic assets from the trust company’s balance sheet, avoiding ongoing erosion of capital and liquidity. Second, under the trust structure, cooperation with asset management firms and other institutions could introduce funds to revitalize assets. Third, specialized companies could bring in professional asset operators through equity cooperation and entrusted management.

Additionally, for distressed real estate, Zhejiang Zeda (Ningbo) Law Firm’s Wang Shun proposed a “trust + benefit debt” design framework.

Wang Shun detailed this framework, stating that trust companies, as restructuring trustees, participate to achieve project asset and original creditor bankruptcy separation, cut off historical debt recovery chains, improve asset operation efficiency, and rebuild market confidence through information disclosure mechanisms, creating conditions for subsequent financing. Then, through benefit debt investments, market-based funds are introduced, and according to Article 42 of the “Enterprise Bankruptcy Law,” debts incurred for the debtor’s continued operation are recognized as benefit debts, prioritized over ordinary bankruptcy claims.

Wang Shun explained that this statutory priority is a key incentive for attracting diversified investors such as AMC, insurance funds, and trust plans, and a core advantage that distinguishes this model from traditional financing.

While these innovative models provide technical pathways for asset revitalization, whether risk disposal service trusts can remain stable and sustainable ultimately depends on their business logic. On the other hand, with rapid growth, issues like blurred profit models and mismatched fees and responsibilities are forcing the industry to think rationally.

According to Meng Fanke, bankruptcy service trusts are a new opportunity given to the trust industry by the times. Trust companies should cherish these opportunities and foster healthy application and development. Regarding business fees, he emphasized that bankruptcy service trusts are legal tool businesses with weakened financial attributes; in a distressed environment where companies are already insolvent, high fees under entrusted affairs are neither reasonable nor feasible.

However, Meng Fanke also pointed out that bankruptcy service trusts still have profit potential—by increasing the volume of entrusted cases to achieve scale effects, provided that standardized, process-driven procedures are established; and by expanding entrusted services or market-oriented offerings to meet business needs, aiming to generate floating trust returns based on the realization of trust property.