On The Preferential Repayment On US Bankruptcy Law

Preferential transfer is a unique concept in the bankruptcy law, by which a non-secured creditor obtains more than he should have received in the liquidation. With furtherance of the economic reforms and the speeding-up of the national economy, the drawbacks of the current bankruptcy law on preferential transfer have ruined the regular adjustment of the relationship between the bankruptcy parties and deteriorated the equality of distribution among non- secured creditors. It is deemed the best way to make up this shortage by introducing the advanced legislation and antecede leading cases of other countries. The U.S. legislation on preferential transfer has a long history, with a sound system and the statutes on preferential transfer are the most complicated and detailed regulations in the avoiding power chapter, which provides us with abundant theories and materials on the matter. Furthermore, the leading cases shed light on the particular problems such as checks and credit letters, which embodies the spirit of consistent bankruptcy policies on equality and efficiency. The outdated regulation and legislation on preferential transfer in our current bankruptcy law lag far behind the bankruptcy practices. The legislation and cases on preferential transfer issues in the U.S. bankruptcy law provides a good antitype for the Chinese new drafting bankruptcy law. But it will be unwise to bring the American counterpart into our legal system without critical analyzing and selecting. We must base on our own bankruptcy practice, introducing the American counterpart into our bankruptcy law. This paper is purposed to give some suggestions on the designing of the statutes on the preferential transfer, by analyzing the U.S. statutes and leading cases on that matter as well as the current practice and legislation in Chinese bankruptcy law.