“Green Bankruptcy”: A Study on the Legal Mechanisms for Priority Satisfaction of Environmental Claims in Corporate Bankruptcy Reorganization

Abstract

The priority‑of‑repayment right for environmental claims is vital to protecting environmental interests and advancing ecological conservation. Nevertheless, China’s Enterprise Bankruptcy Law contains no specific rules on environmental claims, and the ongoing revision of the Bankruptcy Law has not adequately addressed this issue, which misaligns with the country’s ecological‑civilization drive and green socioeconomic transition. In judicial practice, people’s courts usually classify environmental tort claims as ordinary bankruptcy claims. Ranked low in the repayment hierarchy, such claims frequently see low recovery rates. This fails to redress losses suffered by environmental tort creditors and may enable enterprises to dodge environmental liabilities via bankruptcy. Against this backdrop, it is imperative to explore and build a legal mechanism guaranteeing effective satisfaction of environmental claims in corporate bankruptcy. It will protect environmental creditors’ rights, refine the bankruptcy legal system, and underpin ecological‑civilization construction for a “Beautiful China.”