A Case Study On Bankruptcy Reorganization Of Lutianhua Share

Since the financial crisis in 2008,China’s overall debt scale has not only been at a relatively high level among major economies in the world,but also has been growing rapidly.The central government has repeatedly proposed that it is imperative to cut overcapacity,deleverage and defuse financial risks.Since 2015,more and more companies have chosen to get out of trouble through bankruptcy restructuring.In this background,selecting the bankruptcy reorganization case of Lutianhua shares,this article intends to summarize the prerequisite of the success in bankruptcy reorganization through the analysis of the rationality of the company’s bankruptcy reorganization;to find out how bankruptcy reorganization makes the company get rid of financial difficulties,improve the ability of sustainable development through the study of innovative measures in the restructuring;to investigate the effects of the bankruptcy reorganization of the company based on the bankruptcy risk investigation,short-term and long-term performance research.Through the study of this paper,the following conclusions are drawn: First,the rationality of the company’s restructuring in the cause of debt and restructuring motivation are the premise of the success of bankruptcy restructuring.Second,bankruptcy reorganization helps the company get out of financial difficulties.Third,the market-based debt-for-equity repayment method is both an opportunity and a challenge.Only by following the market-oriented principles can we give full play to its advantages and avoid risks.Fourth,in terms of the positive impact of bankruptcy restructuring on the company,the short-term impact is greater than the long-term impact.We should be rational about the effect of restructuring.