The Guangdong High People's Court began to hear a case on Wednesday asking financially troubled Proview Technology to be put into bankruptcy.
The case was filed by Taiwan Fubon Insurance in April. Fubon claims Shenzhen-based Proview owes it 60 million yuan ($9.52 million).
"According to Chinese bankruptcy law, we have the right to ask Proview to declare bankruptcy because it has failed to repay its heavy debts," said the attorney representing Fubon Insurance during the hearing.
"Proview has been unable to pay its heavy debts with all its assets, and the company has now stopped production while all the workers have left the company," the attorney said.
She added that Proview's bankruptcy would have little effect on Proview's iPad trademark case with United States tech giant Apple.
But Xiao Caiyuan, the attorney for Proview, refused to admit that Proview has been unable to pay its debts.
Xie Xianghui, another lawyer for Proview, said Proview's bankruptcy would affect the legal interests of Proview's creditors and create negative factors in the iPad trademark dispute.
According to Xie, Proview has about 200 creditors, and Fubon is just a small creditor.
In February, the Guangdong High People's Court began a public hearing on the iPad trademark dispute case between Proview and Apple, but has not yet delivered a verdict.
Proview claims it has registered and used the iPad trademark for more than a decade on the Chinese mainland.
But Apple claims it purchased the iPad trademark from Taiwan-based Proview Electronics in December 2009.
Xie said the court is now trying to mediate the trademark dispute case between Proview and Apple.