The Protection Of Creditors In Bankruptcy And Reorganization Of Commercial Banks In China

According to the schedule of opening to outside world, after the entrance to WTO of China, the banking has to open since December11th2006.As the core members of financial system, banks have to get involved into the competition of the financial market experiencing survival of the fittest. However, the appropriate market exit mechanism has not been established in China.Owing to operation on borrowing by absorbing of public deposits, the bankruptcy of the bank involves so lots of depositors and other creditors that the banking crisis be given rise to by virtue of chain reaction in credit system for its great social influence. However, bank reorganization affords a better institutional arrangement for the rehabilitation of the bank. Nevertheless, the relevant restriction to the rights of creditors is necessary measure during the process of reorganization. Therefore the creditors, especially individual depositors, are the group which is the most vulnerable to damage. If the adequate of institution protection mechanism could not be offered, the credit crisis shall inevitably happen and the rescue shall suffer the real bankruptcy.The thesis focuses on the protection of creditors in the reorganization of the commercial bank, which is composed of7chapters. The first chapter and the last chapter are respectively introduction and conclusions. The rest chapters are the body of the thesis.The first chapter mainly introduces the reasons of the study, the current legislation and particularities of the bankruptcy of the commercial bank, legal definition of reorganization, protections of creditors and so on with clarifying the meaning of the topic and brief of research methods.The second chapter focuses on the study of theory of creditor’s protection in the procedures of reorganization and issues the basic principles to which shall be adhered in the procedures. Known as the second revolution in traditional bankruptcy law, the reorganization also fulfills the rescue of the problem bank. As to commercial banks, the reorganization relates to many interested parties. However, the core problems of the reorganization are still the protection of creditors, particularly the individual depositors and ordinary creditors.The third chapter mainly defines the claims with analysis. According to the theory of bankruptcy law, the claims of the commercial bank reorganization mainly include secured claims, preferential claims, general claims and inferior creditor’s claims. The thesis suggests that the atypical secured claims with properties should not be excluded the secured claims. As to the labor claims, individual depositors claims and involuntary creditors’ claim, they should be paid as preferential claims. In order to protect the creditor’s rights and ensure the different sorts of claims could be equally treated, the reasonable and efficient procedures should be established in declaration.The forth chapter focuses on the study of how to protect creditors in the start of the reorganization. The article suggests that:Firstly, the cause of the reorganization should be different due to the differences of the applicants. Secondly, provide adequate remedies for the creditors owing to the restriction to their rights after the start of the reorganization. Finally, the interim property protection mechanism before the start of the procedure must be established so that the creditor could be protected well.The fifth chapter pays more attention on the problems of control power of the bank with the protection of creditors in the procedure. The rights of choosing administrator and the participation of significant operating decision making will directly affect the creditors’ interests. Therefore, the paper proposes that the rights mentioned above should belong to the creditors and banking regulator, rather than court.The sixth chapter more concerns the protection of creditors in the mechanism of reorganization plan. The allocation of power in formulation of reorganization plan is another key factory to determine the interests of the parties and the quality of the reorganization plane. Hence the article suggests that in the formulation the plan, not only the expertise and complexity of the bank, but also should the balance of the interests of different parties be considered.The seventh chapter is conclusion section which mainly summarizes the views of the thesis as follows:Firstly, the creditors’ rights, particularly the individual depositors, should be protected at the first place. Secondly, proposes some suggestions about how to protect the creditors in legislation of reorganization of commercial bank.