Event Study On Bankruptcy Reorganization Of Listed Companies

June 1,2007 onwards, China's newly enacted "PRC Enterprise Bankruptcy Law" into effect, including an increase of one important element which is about bankruptcy reorganization provisions. The new "Bankruptcy Law" stipulates that the Corporate whose debts due, and the assets are insufficient to discharge all debts, or the apparent lack of liquidity or that in front of a significant loss of liquidity, can re-engineering according to law.The relevant provisions of bankruptcy reorganization first appeared in U.S. bankruptcy law, because of its long history of development of the most widely legislators reference to countries in the world. As early as 1898, the United States passed a new bankruptcy law, and in 1938, added by the Chandler Act. The introduction of this supplementary bill stems from the lawmakers involved in business disputes, claims and debts of the characteristics of a profound understanding of:the company in financial difficulties, if the creditor's bankruptcy petition immediately agreed to terminate business operations may lead to the consequences of the debtor and the creditors lose-lose. Since the crisis of the companies often have broken through the normal firm's capital structure "red lines", even at the top of the creditors of debt is difficult the first sequence of the remaining assets from the enterprise to recover most of the claims. At this point, the best option for creditors and debtors should be "able to continue to maintain the debtor's going concern value." This marks the bankruptcy reorganization as an important mechanism to prevent the system initially established in the bankruptcy system. With the bankruptcy reorganization in 1978, the United States to make further significant amendments to relevant laws and regulations, bankruptcy law has gone through six sub-series of amendments, ultimately making the system of bankruptcy reorganization bankruptcy cases in the United States to play a growing role, to the verge of bankrupt enterprises "Green land" in a sound institutional arrangements. From its basic conception, the bankruptcy reorganization that is equivalent to "bankruptcy protection" meaning-best to protect the debt crisis, making them effectively avoid the premature dissolution of the liquidation by creditors, prompting creditors and debtors to solve the problem through negotiations. The significance of this system lies in the operating difficulties of the enterprise took place and the final winding-up has created a buffer zone between, a negotiating platform that allows businesses to avoid bankruptcy as much as possible, but also to restore the maximum extent possible the interests of creditors. This win-win mechanism of reducing the adverse consequences that occurred two possibilities: that the bankruptcy could bring a range of socio-economic impact of the consequences of, as well as creditors in bankruptcy may be the consequences of crop failure.There is no doubt, a listed company because of its public nature of the impact of the event of bankruptcy liquidation will be very extensive. In the traditional "Bankruptcy Law" within the framework of the creditor in order to promptly and fully to ensure recovery of their own interests, if they find that a certain degree of operating the debtor into a crisis and are unable to debt service, it will have great motivation as soon as possible the judiciary to apply the debtor's insolvency. This tended to a single negative protection of creditor's legal framework is the root cause of the insolvency law is consistent:for example, "the first English bankruptcy law statutes point to the merchant debtors, and they are full of malicious punishment." However, with the socio-economic development, in such a dispersed ownership of listed companies and with interests involved in a wide range of modern enterprise since the birth of the unilateral protection of the debtor will have a greater number of shareholders, with disastrous consequences. In this context, in order to protect the relief of debtors and creditors, equal emphasis was to be the birth of modern bankruptcy law.China's Insolvency Law short time, until 1986 only the true sense of the first "Bankruptcy Law" was born. With the rapid development of China's economy short period of time, more and more companies are seeking financing through capital markets, corporate shares began to spread among the whole community. At this point, refer to the introduction of foreign advanced legislation relating to bankruptcy reorganization, regulate, and guide China's listed companies may be involved in insolvency dispute is particularly necessary. So far, China's latest revision of the "Bankruptcy Law" was passed in August 2006 and was launched in June 2007, and for the first time with the relevant provisions of the bankruptcy reorganization.New "Bankruptcy Law" As soon as it passed, immediately dispute involving bankruptcy of listed companies invoking the new Act of the active application for bankruptcy reorganization. For example,* ST-Canghua and S*ST-Tianyi, respectively, the new "Bankruptcy Law" adopted in the same year in June and July on the filed for bankruptcy reorganization. Now we look back the situation of China's listed companies, bankruptcy reorganization, it is easy to see because of China's Listed Companies "shell value," to settle financial disputes in bankruptcy reorganization after the introduction of high-quality assets, asset restructuring of listed companies has become a commonly used "rebirth of the Road". Of course, poor management of listed companies in crisis, after all, belongs to a minority, since 2007, the new "Bankruptcy Law" has been implemented for more than* three years upon the completion of the reorganization of assets from the bankruptcy reorganization of the entire process and even fewer listed companies, Only 10. This is no doubt new "Bankruptcy Law" the implementation of the reasons for the near future, but the re-engineering process involves a multi-stakeholder and repeated negotiations must take up more time. The entire process from the point of view, the fastest completion of listed companies also used about half a year, while slower than a year.From China's capital markets involved in a bankruptcy reorganization and successful asset restructuring of listed companies responses so far, "The concept of reorganization," and all are brought to the market speculation excellent theme. This paper attempts a listed company and complete the bankruptcy reorganization of the market value before and after the reorganization of assets and financial position to explore the bankruptcy reorganization of listed companies to bring new legislation before and after the performance, the impact of restructuring.This first chapter is the introduction, introduces the topics of the background, the significance of introducing research methods and framework papers.Domestic and international literature are reviewed in chapter II, introducing the formation of the relevant laws of bankruptcy reorganization, bankruptcy reorganization law in the modern business disputes, claims and debts in an important position in the course of development and so on, and introduce domestic related literature, study of the paper concludes with perspectives and method.The third chapter describes this selection of research methods and data sources. A basic introduction to research methods, while an overview of the data selection and analysis. As the bankruptcy reorganization is still a new thing in China, a listed company through bankruptcy reorganization to restore the true "blood function" is still a minority, so this article consistent with this condition using only the 10 listed companies in the data analysis.Chapter IV uses traditional methods to test assumptions. As the number of listed companies throughout the reorganization process are in the suspension stage, this paper selected the company's shares are still trading when the market performance and the restructuring of a successful re-listing market performance to judge corporate performance and to clarify the bankruptcy reorganization the impact on corporate performance.Chapter V provides conclusions and policy recommendations and propose papers deficiencies and areas for improvement.This paper studies the bankruptcy reorganization of listed companies found that, despite the bankruptcy reorganization may have a double meaning-that the future businesses may face bankruptcy liquidation, or an enterprise may be through debt restructuring with creditors to reach an agreement to settle all claims and liabilities and the discharge from bankruptcy liquidation. the crisis-but China's capital market, bankruptcy reorganization of listed companies may still have a more optimistic expectations.Overall, this paper innovations embodied in the following main aspects:First, this paper studied the adoption of the new "Bankruptcy Law" bankruptcy reorganization of listed companies conduct impact analysis of changes in performance of such companies; Second, this combination of historical literature on the "Bankruptcy Law" prior to the amendment listed company "restructuring" the study found that the new "Bankruptcy Law" may not be on the "hard to bankrupt companies," This is expected to play a fundamental role in reverse, China the legal framework for capital markets has yet to be further improved.