"East Star Aviation Company Bankruptcy" Case Analysis

Since Bankruptcy Law has been implemented for four years, it plays an active role inregulating the order of the market economy, guiding enterprises to exit the market competitionin accordance with the law, resolving the economic contradictions and safeguarding socialfairness and justice, powerful promoted the construction of the socialist harmonious society.Bankruptcy proceedings are the activities of a reasonable distribution of bankrupt property bytaking court as its leading role, taking people management as its center and being under thesupervision of the creditors’ meeting. Only the three do his own job, carry out his own duty andcooperate with each other, can realize benefits balance. But in the judicial practice, due to thelack of experience, a relatively short time of legislation, the more principled provisions andinterest-driven, the phenomenon that local government is offside, the court and theadministrator act beyond their authority, the creditors meeting loss its power and the ignoranceof creditors’ rights frequently phenomenon. Therefore, we must return each role’s orientation inthe bankruptcy procedure and define their respective functions and powers. So to clarify therelationship between the court and the administrator, the creditors’ meeting has becomeparticularly urgent. Taking the bankruptcy of East Star Aviation Company as an example, thispaper, starting from three controversial focus problems in this case and on the basis of theanalysis of controversial issues, this paper explores the relationship between the court and theadministrator, the creditors’ meeting, points out the deficiencies of the existing legislation andmakes relevant commendations with the expectation of providing some useful advice to perfectour country’s bankruptcy legislation.There are more than15000words, which can be divided into five parts: First, the caseprofile and the caused problems. Second, the relationship between the court and theadministrator. Third, the relationship between the court and the creditors’ meeting. Fourth, therelationship between the administrator and the creditors’ meeting. Finally, the conclusion.The first section: the case profile and the caused problems. Firstly, this section gives abrief introduction of East Star Aviation Company bankruptcy case. By analysis and finishing of the problems caused by the case, three controversial issues are summarized: The first is thelegality and rationality of the court-appointed administrator. The second is how to regulateright of the judicial intervention and the final decision of the court when creditors’ restructuringrequest is rejected by the court several times. The third is whether the administrator shall havethe right to oppose restructuring willingness of creditors. Also, the third is about how toregulate administrator’s rights.The second section: the relationship between the court and the administrator. Focus on thelegitimacy and rationality of administrator’s being in this case, I discuss from a legal andreasonable level and get the conclusion that the administrator’s being in this case is legal butunreasonable. Thus I raise doubts about the relationship between the court and theadministrator in our country’s bankruptcy legislation, make comments on the countries’mainstream view "post" and "special agency said", analyse and compare the practice andinsufficiency of our country’s legislation, then propose my own ideas and opinions, andposition on the relationship between the court and the administrator.The third section: the relationship between the court and the creditors’ meeting. Thissection firstly analyses and discusses on the basis of how to regulate the right of judicialintervention and the final decision of the court, then points out that in our country at this stage,the court’s partial neutrality and too much discretion lead to court’s overreaching and thecreditors’ meeting power’s loss. Combined with national legislation cases and doctrines, thissection elaborates the nature and the duties of the creditors’ meeting, and puts forward someproposals to improve relevant legislation and reshapes relationship between the court and thecreditors’ meeting.The fourth section: the relationship between the administrator and the creditors’ meeting.This section firstly concerns with whether the administrator has right to oppose restructuringwillingness of creditors and how the creditors’ meeting pursues the administrator’s legalresponsibility. This section concludes that rights of both in the legislation is not balanced, andproposes advice to give the creditors’ meeting rights to appoint an administrator and to perfectthe legal liabilities of the administrator. The fifth section: conclusion. On the basis of the analysis discussed above, therelationship between the court and the creditors’ meeting is raised: the three cooperate witheach other and restrain each other, do his own job and carry out his own duty, which will forman equilateral triangle structure that the court manages, the administrator and the creditors’meeting are on both sides of the division.