Research On The Application Of "Deep-Rock Doctrine"

The development of associated enterprises has brought vitality to the modern economy; meanwhile, it also has brought new challenges to the traditional company law system, which includes the interests balance problems between the associated enterprises and their external creditors. At present many countries of the world have responded to this problem, have improved some of their traditional laws, and created several new legal principles. "Deep-Rock Doctrine" is one of these explorations, which is originated from a judicial precedent dealing with the bankruptcy case of the affiliate company in U.S.A, "Deep-Rock Doctrine" is a principle about the improper claims of the controlling company should be discharged subordinately when the affiliate company goes bankruptcy, in order to achieve the purpose of regulating unfair connected transactions and protecting the legitimate interests of the affiliate company's external creditors. The principle has a positive meaning to ensure substantial fairness of bankruptcy claims distribution under the condition of associated enterprises.This paper firstly introduces the definition, origination and development of the "Deep-Rock Doctrine", then focuses on analyzing the specific applicable rules of this principle, such as the objects, the conditions and the legal consequences, finally returns to why and how to bring the "Deep-Rock Doctrine" into our country's legal system. The last part discusses the necessary to the introduce, and tries to design the legal system both in substantive and procedural regulations, and gives some proposals for legislation, aiming to do some benefit for the final establishment of the "Deep-Rock Doctrine" in our country's legal system.