DeHeng Successfully Represented a “Three-Level Piercing” Enforcement Case Involving a Withdrawn General Partner

2025-02-10

Recently, DeHeng received a favorable enforcement ruling from the Supreme People’s Court in a rare case involving a three-level piercing enforcement strategy—from a corporate shareholder to a partnership, and finally to a withdrawn general partner—a novelty in Chinese enforcement practice.

The underlying dispute stemmed from an investment contract dispute represented by DeHeng, which was fully upheld by a Chinese intermediate court. As the defendant could not repay its debts, DeHeng successfully petitioned to add two limited partnerships as enforcement respondents, based on their failure to fully contribute capital. However, these two entities also lacked assets available for execution, and their executive partners had suspiciously been changed to an elderly person with no repayment capacity. At this stalemate, DeHeng made the strategic move to request the addition of former general partners who had previously withdrawn from the partnerships, thereby forming a three-level piercing enforcement framework. This application was ultimately supported by the intermediate court, higher court, and finally the Supreme People’s Court. 

This case involved two major legal challenges: first, whether a withdrawn general partner could be added as an enforcement respondent during the enforcement phase; second, whether it is legally permissible to further add the partners of an already-added enforcement respondent within the same case. 

DeHeng’s successful outcome secured additional assets available for enforcement, effectively safeguarding the client’s lawful rights and interests, and receiving strong recognition and praise from the client. The case also highlights DeHeng’s exceptional legal expertise and innovative problem-solving capabilities, setting a valuable precedent for similar cases in the future.