Analysis On The Implementation Of Gambling Agreement In Private Equity Investment

After the promulgation of "Minites of Civil and Commercial Meetings",the judicial standards of dispute cases concerning gambling agreements was unified for the first time.This continues the logic of judgment in the "Hua Gong Case",distinguish between the validity and enforceability of the contract.In principle,the gambling agreement is determined to be effective,and the main points of the case’s judgment focus on the actual fulfilment of the gambling agreement,that is,to review whether the target company is completed Prerequisites for stock repurchase or compensation money.Regarding the implementation of the "equity repurchase" gambling agreement,the court examines whether the party’s repurchase request has the possibility of withdrawing capital,and examines whether the target company has completed the capital reduction procedure before the repurchase;as for the "money compensation" gambling agreement,the court examines whether the parties violated the company’s shareholders’ prohibition of capital contributions and proceeded in accordance with the profit distribution procedure.Although it helps to balance the risks and interests of both investment and financing parties,there are still difficulties in the actual implementation process.By combing through the typical judicial judgment cases,interpreting the thinking of the Supreme People’s Court regarding the gambling agreement in the minutes,and analyzing the implementation dilemma of the gambling agreement of the "Minites of Civil and Commercial Meetings",it is concluded that the main controversy of the gambling agreement implementation mechanism: One is that the principle of capital maintenance is restricted,while the acquisition of inventory assets and the withdrawal mechanism of monetary compensation are restricted by the final rules of capital maintenance,which is not only the possibility of misplaced capital and the causal relationship between the repurchase sequence.,also wrong monetary compensation is equivalent to profit distribution;the second is that there are obstacles to the actual implementation of the gambling agreement,such as the criteria used to judge the completion of the capital reduction procedure,the legal basis for the repurchase of shares by the limited company,and the financial source restrictions for monetary compensation;the third is that the judgment of the "Hanlin case" has not been continued,and the issue of the validity of the guarantee provided by the target company for the gambling agreement has not been dealt with;the fourth is that both the company law and the contract law lack special regulations on gambling agreements.However,these problems have not been effectively resolved,that is,if the target commitment is not fulfilled,how to ensure that the target company not only realizes the protection of creditors’ interests on the basis of fulfilling its obligations,but also meets the capital arrangement under the principle of capital maintenance.Based on the consideration of the commercialization characteristics of the gambling agreement,the value of the gambling agreement can be better realized only by solving the performance problem.Therefore,on the basis of drawing lessons from foreign legislative practices,combined with my country’s judicial practice,we put forward suggestions to improve the gambling agreement system in the field of private equity in my country.Suggestions on the implementation mechanism of the gambling agreement are reflected in the following aspects: Firstly,learn from the "Tought Works case" in the United States and introduce the "legally available funds" standard and the board of directors’ commercial trial rules to make up for the lack of implementation of the gambling agreement under the guidance of the current rules;secondly,clarify the effectiveness of the target company’s guarantee for gambling between transaction subjects,and establish and improve the system design of the target company’s guarantee;thirdly,in view of the long-term absence of statutory laws related to gambling agreements,changing the nature of contracts and improving company law control are important steps to standardize the legal system of gambling agreements.