Research On The Legal Issues Of Substantive Merger Bankruptcy System Of Affiliated Enterprises

When a large enterprise group with complex internal relationship falls into bankruptcy crisis,because of the large range of stakeholders involved in the related enterprise and the complex relationship,it often appears that the related enterprises are highly confused in bankruptcy practice.At this time,the substantive merger bankruptcy system of the related enterprises is the better way to solve the bankruptcy problem.At present,the bankruptcy legal system in China’s enterprise bankruptcy law only aims at a single enterprise,and there are no normative documents and legal provisions specially regulating the bankruptcy of affiliated enterprises.Although the Supreme People’s Court issued the "minutes of the national court’s bankruptcy trial work conference" in 2018,the sixth part of which specially set the content of "bankruptcy of affiliated enterprises" and made general provisions on substantive merger bankruptcy,its legal status is quite different from traditional laws and regulations and judicial interpretation,and has no actual legal effect.Therefore,the substantive merger and bankruptcy of affiliated enterprises is still in the state of lack of legal basis in judicial practice.Secondly,due to the different understanding of meeting minutes,the application of substantive merger bankruptcy is confused.Thirdly,under the current system,there is no clear provision on the selection of bankruptcy administrator for substantive merger of affiliated enterprises,which is prone to the situation that the administrator is not competent.Finally,the current system has defects in the burden of proof,creditor objection and supervision mechanism,which can not effectively protect the rights and interests of creditors.In view of the above problems,based on the analysis and summary of the current judicial practice of substantive merger bankruptcy of affiliated enterprises,the author puts forward the following suggestions: first,the substantive merger bankruptcy should be included in the enterprise bankruptcy law.At the same time,the judicial interpretation is issued to clarify the applicable standards,application subjects,burden of proof and relief of objection right in the substantive merger bankruptcy rules.Second,establish the applicable standard of comprehensive substantive merger bankruptcy.It is suggested that "the standard of confusion of legal personality" should be taken as the applicable standard,and fraud and reorganization should also be included in the standard of substantive merger.Third,improve the bankruptcy administrator system.It is suggested that the bankruptcy administrator of affiliated enterprises should be formed into a joint administrator to give full play to the coordination advantages and improve the bankruptcy efficiency.At the same time,we should strengthen the supervision and management of the bankruptcy administrator and the performance of duties,so as to ensure the creditors’ fair compensation.Fourth,strengthen the protection of creditors’ rights and interests.It is suggested that the burden of proof should be differentiated according to the subject of the application for substantive merger,and the creditor should be given the right to raise objection to the court,and a comprehensive supervision mechanism should be established by organizing the creditor to participate in the hearing and establishing the creditor committee to protect the creditor’s rights and interests.It is expected that the discussion on the substantive merger bankruptcy of affiliated enterprises in this paper can contribute to the realization of the multi-party interest balance of the substantive merger bankruptcy system to a certain extent.