| The current Enterprise Bankruptcy Law in China was formulated in 2006.At present,At present,many systems can no longer meet the needs of market economy development,The lack of legislation of substantive consolidation is one of them when the affiliated enterprises were bankrupted.This article takes 15 cases of court legal documents as the research object for empirical analysis,combines typical case studies,comparative method analysis and other research methods,and focuses on deconstructing entity mergers from two dimensions of entity specification and procedural specification to provide suggestions for future legislation.This article is divided into five parts.The first part is mainly to introduce that there are many legal issues of substantive consolidation to be solved in the current.The internal structure of affiliated companies enjoys advantages in profit maximization,taxation,risk aversion,etc.,therefore it is adopted by many companies.Due to the lack of unified legal provisions,a large number of judicial practices did not reach a normative opinion,which was not only detrimental to the protection of rights and interests of the stakeholders,but also was hameful to improve the theory of subatantive consolidation.So that,the research value of legal issues is very important.The second part mainly summarizes the basic theory of entity merger,the legally independent affiliates are regarded as a unified business entity because of the consistency of economic facts.Its value appeal lies in giving priority to efficiency and paying off all creditors fairly.The United States Supreme Court created the entity merger first in the debtor fraudulent bankruptcy case,since then,the local court has gradually developed to apply the entity merger from the perspective of lifting the veil of the corporation and proposed a series of factor methods.The substantive consolidation has the unique value that cannot be replaced,such as revealing the legal corporate veil and the equitable subordination institution.At present,all walks of life have reached consensus on substantive merger legislation,so it is necessary for China to learn and introduce it.However,the substantive consolidation will inevitably damage the reasonable trust interest of some creditors,and should apply the principle of exceptions when it is specifically needed.The third part mainly consists of the entity specification of the substantive consolidation.The substantive consolidation is only applicable to the affiliated enterprises when the corporate personality is mixed.In the future,the affiliated enterprises chapter can be created separately in the Company Law.According to the different relationship,it can be from equity-related,financial loan-guaranteed,contractual,the actual control of production and business operations,kinship relations,and special economic interests.The focus of the substantive consolidation lies on how to determine the applicable standards.Based on the empirical research,this article believes that corporate personality mixed should be highly confused with the primary criteria,and the factors that it difficult to separate assets and debts play a decisive role.Other fraudulent activities,cross-guaranteed loans,and creditors ’income standards should be supplementary reference factors that are not independently applicable.Fraudulent activities may also independently determine the merger procedure when it is impossible to invalidate the bankruptcy and withdraw the remedy.At the same time,when the merger bankruptcy is beneficial to creditors collectively without damage,the creditor ’ s income standard can also be applied independently.After the merger bankruptcy,the affiliated companies should be one subject to pay off the debt,so the internal creditor’s rights and debts will be eliminated,and the duplicate creditor’s rights only confirmed one.It also does not affect the creditor’s priority in different affiliated companies.As a special rule in the bankruptcy proceedings,the entity merger can be perfected on the basis of the bankruptcy law of our country in the future.At the same time,the Equitable Subordination Doctrine and the Horizontal Corporate Personality denial system should be introduced as the supporting theory of the substantive consolidation theory.,so as to achieve fair protection of creditors.The fourth part mainly consists of the substantive consolidation procedure.The construction of the procedure should be in line with the efficiency and fairness.The jurisdiction of the substantive consolidation court shall be based on the general principles of the center of interests,and the application is prior principle shall be a special jurisdiction,jurisdiction may be transferred or be designated jurisdiction when the jurisdiction were conflicted.Othermore,we should give judges discretion of jurisdiction.The application of sunbstantive consolidation shall be filed before the approval of the reorganization plan or before the conclusion of the bankruptcy liquidation procedure.The application of the parties is insisted on as the normal state,and the court ruled by authority as an exception.In addition to the main body of the bankruptcy application stipulated in the Enterprise Bankruptcy Law,the applicant should also allow the custodian to apply for and appropriately expand the custodian’s investigation right.On the distribution of burden of proof,creditors applying for emerger bankruptcy should meet certain conditions,and the difficulty of proof should be reduced and reversed.The custodian,Investors and debtors should also can apply for merger bankruptcy because they have the advantage of investigating evidence because of their power and position.The burden of proof does not need to be reduced,they still follow the highly probable standard.After the merger bankruptcy procedure are entered,the courts should also focus on the merger of procedures,establish a coordination process by giving participants obligations.So that it can adjust the conflict of interests between the custodians,the courts as well as the creditors,so as to promote the efficiency of substantive consolidation and reduce the cost of duplicate bankruptcy proceedings.The merger bankruptcy procedures will inevitably damage the reasonable trust interest of some special parties.Therefore,the creditors’ meeting should be set up for voting,public notification procedures,and hearing procedures as a necessary procedure for the court’s cautiously applicable;after the court makes the entity merger ruling,it should grant the parties the right to appeal and the dissent action of substantive consolidation is builded for the case of outsiders,so as to fully protect the rights of the interested parties.The fifth part calls for China to improve the legislation of the substantive consolidation in affiliates as soon as possible,and at the same time,it makes a further study of this topic. |
