Study On The Listed Company’s Scheme Of Bankruptcy Reorganization

The Bankruptcy Law of China published in 2006 in a way created a new situation for bankrupt law practice. The appearance of Bankruptcy reorganization procedure emphasized the priority of the protection of the society interest and the rescue of debtor. Bankruptcy reorganization procedure has been developed into a mature law system in western countries. However, because of its procedural complexity and highly cost, it’s not applied in large-scale and the success rate of restructuring remains a low level. With bankruptcy law coming into effect in 2006, China set off a wave of bankruptcy reorganization with two distinct features. The first feature is that a large number of listed companies choose the Bankruptcy reorganization procedure. The second feature is that in the public practice of the listed company’s bankruptcy reorganization there is still no one case of program terminated by court decision because of failure. And these two Chinese characteristics, no doubt at this stage is focus of the bankruptcy restructuring of listed companies. And for the process of bankruptcy reorganization, the main work lies in scheme of bankruptcy reorganization. In the process of the program, the scheme of bankruptcy reorganization planning, voting, approval and implementation makes up of the major parts of reorganization program. Therefore, the research of scheme of bankruptcy reorganization can help to deal with problems for listed companies in the process of bankruptcy reorganization.Since bankruptcy is a conflict of interests that cannot be reconciled, the bankruptcy reorganization process as an important part of the insolvency system cannot avoid the conflict of interests the same. How to establish a balance by scheme of bankruptcy reorganization when facing demands of different interests is the problem for our theoretical research. Particularly in the process of bankruptcy reorganization, the listed companies as a public company, it affects not only a large number of shareholders, but also impact the economic of its areas. Therefore, the conflicts and balance of interests lies in every stage from planning to execute of bankruptcy reorganization for listed companies. Secondly, because of the historical factors in the development of listing system in China, the listed companies is not simply a commercial subject, they also have close interest relationship with the government. Correspondingly, the government will become a member of stakeholders while in the process of bankruptcy reorganization. Therefore, we discuss the relevant issues about scheme of bankruptcy reorganization plan, voting, approval and implementation and try to find out how to improve the existing relevant legislation of listed companies’bankruptcy reorganization based on the two distinct features mentioned above. This article includes seven parts:The preface briefly introduces the origin of this study, the present research situation and the idea of my writing.The first chapter is’the conception evolution of scheme of bankruptcy reorganization of listed companies in China’. In this chapter, we’ll review the change of legislation value in the development of insolvent law and analyses the basic rule of bankruptcy reorganization system that includes rule of interest balance, rule of public power intervention under autonomy and rule of restorability of the debtor. The development of listed companies under the socio-economic background in the special period are analyzed.We sum up the special needs for bankruptcy restructuring of listed companies. Taking into account the reality of social transformation and the special needs of listed companies for bankruptcy reorganization program, we think the existing of this particular demand will remarkably affect every basic rule of traditional bankruptcy reorganization program in the practice of bankruptcy reorganization of listed companies, and it will be renewed and even change the conception of evolution.The second chapter is "the government behavior in the scheme of bankruptcy reorganization of listed companies." This chapter reviews the history, describes the special relationship between the public power and commercial activities, analyses the listed companies’demand for government behavior and comes to the conclusion that government behavior affect the bankruptcy reorganization of listed companies positively and negatively at the same time. Moreover, in this chapter we take the bankruptcy law as an example to discuss the relationship between the police and legislation value, and then explain the mechanism of government behavior in the bankruptcy restructuring. Finally, We analyses the police which should be followed by government behavior in the process of bankruptcy reorganization, and point out that the basic rule for government behavior is to balance of interest and protect the social interest in the process of scheme of bankruptcy reorganization making, voting, approval and implementation. Based on this policy principle, maintain public order and safety, protect workers’interest, reserve the "shell" resource of listed companies and restore the operation capacity are the four specific policies government behavior should follow in the practice of bankruptcy reorganization at this stage.The third chapter is "The analysis of interest subject in bankruptcy restructuring plan of listed companies". This chapter firstly describes the overall change of interest relationship after the listed companies proceed into the bankrupt reorganization procedure and then analyses the change and feature of interest relationship between external and internal in the process of bankruptcy reorganization This chapter also points out that when the listed company proceed into bankruptcy reorganization procedure, new features such as finiteness and riskiness of resource, diversity of interests target and the public power in the regulation of interest conflict will appear in the bankrupt reorganization procedure because of the change of factors such as internal control power, external market forces and the intervention of public power. To address the major conflict subjects such as creditor, debtors and shareholders involved in the bankrupt reorganization procedure of listed companies, we detailed analyses the appeal of different interest in the bankrupt reorganization procedure, and discuss the expression of conflict between the interest subject based on this. We come to the conclusion that the interest conflict in the bankrupt reorganization procedure could be divided into conflict of private rights, conflict of private right and public power, conflict of public powers.The fourth chapter is "The making and voting of scheme of bankruptcy reorganization of listed companies" This chapter points out the anticipatory, bankability and feasibility characteristics of bankrupt reorganization procedure by analyses its draft rule and feature. We points out that the balance of interest is still the basic rule in the bankrupt reorganization procedure, the joint consultation rule and special protection rule should also be applied. This chapter also discuss the main development of bankrupt reorganization procedure, the contain in the plan and the specific law such as voting subject and voting group of bankruptcy reorganization procedure, considering relevant national legislation.The fifth chapter is "the approval and implementation in scheme of bankruptcy reorganization of listed company", we discuss the realization of the balance of final interest by analyses the approval and implementation in bankruptcy reorganization procedure. As far as the implementation is concerned, we also discuss the normal implementation and obliged implementation. In the normal implementation of bankrupt restructuring procedure, the court should apply the legality principle, comparative advantage principle and feasibility principle in the bankruptcy reorganization procedure as long as the fundamental principle of interest balance is kept. In the obliged implementation of bankruptcy reorganization procedure, this chapter analyses the necessity of obliged implementation system from three aspects:the legislative value expressed by the bankruptcy reorganization procedure, the potential economic benefits brought by the bankruptcy reorganization procedure and the balance of interests required in the bankruptcy reorganization procedure. We also pointed out that in the process of obliged implementation, the minimum limitation principle and the minimum benefit principle should be applied beside the feasibility principle. Besides that we will separately discuss the specific legal issues in the normal implementation and obliged implementation of bankruptcy reorganization procedure. In addition, this chapter will also discuss the shortcomings of existing legislation and some legal issue involved in the implementation of bankruptcy reorganization procedure from three aspects:executive agent, supervision of implementation and relief.The final conclusion is "The proposal to improve the legislation of scheme of bankruptcy reorganization" Based on the previous chapters and the current situation of bankruptcy reorganization, we will discuss the future and development of scheme of bankruptcy reorganization. And we also give some suggestion to improve some specific clause involved in the planning, voting, approval and implementation of scheme of bankruptcy reorganization.