case Mainland China English summary

Chen v. Companies B and C: Debt Evasion and Horizontal Veil Piercing

陈某与乙公司、丙公司等买卖合同纠纷案

A Supreme People's Court typical case in which an actual controller used affiliated companies to shift transaction benefits and evade debts, leading the court to pierce horizontally.

Brief English Introduction

Chen supplied goods under a contract with Company B, while Company C also benefited from the same supply arrangement. The court found that the actual controller blurred the asset, personnel, decision-making, procurement, and sales boundaries between B and C, then shifted transaction benefits so that B’s creditor could not be fully paid. Company C was held jointly liable.

Use It For

Use this as a recent policy-facing example of courts treating abuse of affiliated companies as debt evasion.

Teaching Notes

Students should compare this case with Xugong and the Zhengzhou reference case. The recurring fact pattern is not only common personnel or addresses; it is the use of corporate separateness to move benefits away from the debtor.