The Simple Analysis To The Legislation And Object Of The Right Of Revocation In Insolvency Law

The Law of the People's Republic of China on Enterprise Bankruptcy, which came into force on June 1,2007, stipulates the right of revocation whose purpose is to correct insolvent debtor's illegal actions before the initiation of the procedures for bankruptcy, so that the debtor's assets are restored to its original condition in order to protect the interests of the creditor who is not secured with property.The specific provisions are as below:Article 31:Within 1 year before the people's court accepts an application for bankruptcy, a bankruptcy administrator has the right to plead the court to revoke any act relating to the debtor's assets:(1) Transferring the assets free of charge;(2) Trading at an obviously unreasonable price;(3) Providing asset guaranty to those debts without any asset guaranty;(4) Paying off the undue debts in advance; or(5) Giving up the creditor's right.Article 32:Within 6 months before the people's court accepts an application for bankruptcy, if a debtor is under any circumstance as prescribed by paragraph 1, Article 2 of the present Law where it makes repayment to individual creditors, its bankruptcy administrator has the right to plead the people's court to revoke it, except where individual repayment may do good to the debtors' assets.Total six actions could be revoked as stipulated in the insolvency law,from which the main contents of this article will be elaborated as follows:Chapterâ… A) The deficiencies of the list-style legislation of revocation for bankruptcy in China and the advantages of the summarization-style legislation of it.B) The proposal to combine the two styles aforesaidC) The analysis of the general elements in summarization-style provisions based on the introduction of some foreign legislations.Chapterâ…¡A) To prove the conflict between the definite list-style provisions and the variable illegal actions based on the analysis of the additional three revocable actions excluded from the provisions in ChinaB) The necessity to change the current legislation by the combination of the two styles aforesaidChapterâ…¢&â…£A) The improvement proposal for the six revocable actions in the current insolvency lawB) The analysis of two kinds of revocable actions (fraud action and biased action) who are classified by the extent of the creditor's interests infringed from the debtor.To summarize the point of the article, the conclusion is that the right of revocation in insolvency law should be improved not only in the legislation style,i.e.the combination of list-style and the summarization style but also in the deficiencies of the current provisions,i.e.to specify the compositions of the typical revocation actions.