Research Of Protecting Bank Claims During Bankruptcy Reorganization Of Listing Corporations

Banks are the financial institutions engaged in monetary management, as the agency of credit, banks gather the scattered and idle money together by credit first, then distribute the funds to the needed market and obtain profits through the interest gap between the borrowing and lending. With the development of China’s socialist market system, the total market demand for funds is increasing, resulting in the increase of the bank loans. For example, at the beginning of reform in1980, the loan balance of the state-owned banks was only241.43billion, but at the end of2013,this figure came to be28,718.685billion, by117.95times increase compared with the figure in1980. But the system of the bank creditor’s rights protection has not kept the pace with increase of the loan balance and people’s sense of protecting bank creditor’s rights has not yet been promoted which resulting in a large mount of bank bad claims. By the end of2013,the amount of China’s commercial banks’claims is up to340.053billion.The China’s new bankruptcy law officially had its power on June1,2013, and imports the bankruptcy reorganization system to revive the corporations which have temporary financial difficulties and values of going concern and reach the goal the maximum of the whole social interest. With the spreading of financial crisis in2008,the domestic economy had a tremendous impact and more and more corporations got out of the market or sought chance to revive by the new bankruptcy law. Some listing corporations were found among them, by the end of the2013June,40listing corporations had applied for bankruptcy reorganization. And banks are the main external financing channel for listing corporations, so banks are the largest creditors. During the bankruptcy reorganization, most of the bank claims are exempted by the bankruptcy law resulting in great loss for banks. The social credit system would be ruined and the financial system would be disordered if this continues. The analysis finds that there are many factors which bring great loss to the bank claims during the bankruptcy reorganization. The China’s new bankruptcy law leans to protect the profits of debtors, this is bad for protecting the creditors’ profits. So the research on protecting the bank claims during the bankruptcy reorganization of listing corporations is started in order to maintain the normal social credit system and financial order.For more detail, the contents of this pare are as follows:Chapter1is the introduction. This section introduces the proportion of bank claims in the listing corporations and the basic concept of the bankruptcy corganization in order to build a rough understanding of the great loss to banks when corporations go to bankruptcy and to explain the researching significance. Then this section simply describes the researching method and researching background.Chapter2is the summary of papers. This section makes a summary of the researching achievement of scholars at home and abroad on protection of bank claims during the bankruptcy reorganization of listing corporations.Chapter3is about overviews of the protection of bank claims and bankruptcy reorganization. This section introduces the current states and existing methods of protecting bank claims etc. The intent, value and procedure of the bankruptcy reorganization are introduced at the end of this section.Chapter4is the theory basis of this paper. Three theories which have relations with the protection of bank claims during the bankruptcy reorganization of listing corporations are the theory of operating value, balance theory of finance relationship and theory of asymmetry of information. The operating value is the prerequisite of bankruptcy reorganization, the imbalance of finance relationship and the asymmetry of information during bankruptcy reorganization are the interior causes of infringements of bank claims.Chapter5is about the predicament of the bank claims and the causes of infringement of bank claims. This section uses theory of finance relationship to analyze the interior causes of infringements of bank claims during the bankruptcy reorganization of listing corporations, and then analyses the external behaviors that make great loss to bank claims through the perspectives of finance. Chapter6presents suggestions of methods of protecting bank claims during bankruptcy reorganization of listing corporations. The objective of this section is to find out solutions to solve the problems found in chapter5and some special suggestions from finance perspective are proposed. Through combination with the bankruptcy reorganization system, these suggestions are able to protect the bank claims during the bankruptcy reorganization of listing corporations efficiently.Chapter7is about the summaries and the prospects of this paper. This section summarizes the contents and the achievements of this research first, and then foresees the future developments of the bankruptcy reorganization system and the prospects of protecting bank claims during the bankruptcy reorganization of listing corporations.By now scholars at home and abroad have done a lot of work on protecting bank claims during bankruptcy reorganization of listing corporations, and get lots of achievements. But most of these works study it through the legal perspectives, and give suggestions of consciousness to perfect the bankruptcy reorganization system, no detailed and practical methods are proposed. So the author analyses the causes of infringements of bank claims during bankruptcy reorganization of listing corporations through financial perspective, for example, the conditions of bankruptcy are unclear, the procedure of the bankruptcy reorganization is started hastily, the information disclosed by listing corporations is not exact, insufficient and not in time etc, the profits of the stockholders are protected excessively etc, at the same time, the author also proposed some solutions through finance perspective to protect bank claims during bankruptcy reorganization of listing corporations, for instance, financial targets, such as asset-liability ratio and so on, are used to quantize the conditions of bankruptcy, fixed assets turnover etc are used to determine whether the listing corporation is able to going concern by bankruptcy reorganization and so on. And up to now, nobody study this topic through finance perspectives, so the selected topic of this paper is fresh and the points are special. By the way, the author finds that some disadvantages of protecting bank claims during bankruptcy reorganization of listing corporations come from the banks, so some suggestions to enhance interior regulations of credit risks in banks are also proposed to reduce the loss of bank claims better from sources of debts. This paper tries to find out the solutions to protect bank claims during bankruptcy reorganization of listing corporations, but because of the limits of the author’s knowledge and energy, this paper has some defects to be perfected. Firstly, this paper selects part of listing corporations as the samples of the research, but most of corporations in our country are not listing corporations, they also are possible to involve the bankruptcy reorganization issue, because of the difficulties of collecting information, this paper doesn’t study the protection of bank claims during bankruptcy reorganization of private companies. Secondly, it’s also difficult to collect information of listing corporations because of the imperfect norm of information disclosure, this brings many difficulties to the research, so this paper just selects some listing corporations whose information are completely disclosed relatively, for the limits of the samples, the research of this paper is not as deep as expected.