On The Right And Duty Of Bankruptcy Reform Administrator

Bankruptcy is a product of the market economy. As long as there is freecompetition, there will be the survival of the fittest. Following the law of marketeconomy, the effective, fair and transparent bankruptcy legal system will minimizethe shock, which would be brought upon the whole community, by the bankruptcompanies. Today’s government and market economy should take effort in optimizingcapital resources as well as maximizing financial assets from the private sectors inorder to achieve overall economic prosperity, and social stability. The bankruptcy lawhas become an important part of the legal system of modern market economy playinga critical role in ensuring economic operation and social stability.The latest developments of modern bankruptcy law insists that according to therules of the market, companies should enter the bankruptcy protection proceedingeven though they are able to repay maturing debt when the operational risks and debtcrisis happen to appear. Thus, the reform program is put in a more and moreimportant position when during the modification of the bankruptcy law. No doubt, thereform program in the current economic environment has been given the function ofpreventing bankruptcy. The ultimate goal of the bankruptcy proceedings hasunconsciously transferred from protecting the debtor-creditor relationship to helpingthe debtor avoid bankruptcy, thus the interests of the community can be maximized.The new Bankruptcy Law introduces the reforming system. The originalliquidation group has been replaced by the administrator system, which seems abreakthrough of the Bankruptcy Law in China. However, the new system needs along period to be digested, absorbed, and executed after introduction. It is worthmentioning that the integration of both systems is a top priority. What kind of role theadministrator plays, what its rights and obligations are, what kind of relationshipbetween administrator, creditor and debtor is, are the problems we deal with the crisisof companies applying for reform when we using the new Bankruptcy Law. China is in a transition period from planned economy to market economy system, it isinevitable that a large number of companies would require bankruptcy and reform.How to smoothly solve these problems is significant for these companies to get out ofeconomic difficulties with the least delay possible, protect the interests of creditors,debtors and staff, safeguard social stability and build harmonious society. Based onthis, the author chooses the right and duty of administrator in reform program as theobject of study of graduation thesis. This article arranges the main parts as follows:The first part is an overview of the legal status of the restructuring programadministrators. This chapter begins with the administrator system, followed by thediscussion on the concept of administrator and its legal status. Then it combines theadministrators and reform program, summarizes the characteristics of administrator inthe reform program. Last, the paper elaborates the necessity and target value foradministrators in the reform program by analyzing the value target of reformprogram.In the second part, this paper divides reform program into two modes by theattribution of operational control: the DIP mode and administrator mode. It elaboratesthe administrators’ rights and what they can do by comparing the differences ofadministrator rights in different modes and combining regulation of administrators’rights at home and abroad.The third part puts administrators under the framework of the entire bankruptcyproceedings and summarizes the two obligations of administrators: the duty ofaccepting supervision and duty of exercising due care of a good administrator. Thispaper discusses connotation of a good administrator’s the duty of care throughcombining the regulations both domestic and overseas with definition of the duty ofcare in corporate law, trust law.The fourth part tries to put forward advice to the regulation about administratorsin China’s new Bankruptcy Law in five perspectives: use market mechanism toprotect the right of management fees, refine the right of administrators supervise, giveadministrators the right to make recommendations of converting reform mode, fulfillthe obligations of supervise mechanisms, improve the administrator’s duty of care.