The auto parts supply industry has been beset by financial problems for several decades. Original equipment manufacturers ("OEMs") typically have the right to immediately seize their tooling, which the supplier holds in order to make parts. This allows OEMs to quickly move the tooling to another supplier and avoid an assembly line shutdown if the supplier fails. The right to immediately reclaim tooling, however, may be restricted if the supplier files for bankruptcy.

The retail sky is falling. At least that is how it appears from recent and unprecedented number of retailers filing for bankruptcy. From iconic stores such as Sears and Toys ‘R’ Us, to department stores such as Bon Ton, to mall stores including Brookstone, The Rockport Company, Nine West, among others. The reasons given for such filings vary as much as their products but one theme seems to be constant — the inability of retailers to maintain “brick and mortar” operating expenses in the era of online shopping.

On December 29, 2008, the State Administration for Taxation (SAT) and the Ministry of Finance (MOF) jointly promulgated the Circular on Several Deed Tax Policies Concerning Enterprise Reorganization and Restructuring, (Cai Shui (2008) 175, Circular 175). Circular 175 took effect on January 1, 2009, and will be effective through December 31, 2011.