Research On The Ownership Of The Dominant Power In Pre-reorganization

Pre-reorganization is a new type of corporate rescue assistance model that combines innovation on the basis of reorganization procedures and out-of-court reorganization.When the company is in trouble,it does not directly apply for reorganization.Instead,the debtor negotiates with all parties to jointly formulate a reorganization plan.After the reorganization plan is passed,it will apply to the court for reorganization.The court reviews the reorganization plan on the basis of following the relevant review standards.After the review is completed,the reorganization plan can be passed directly,and then the formal reorganization procedure is entered.However,our country ’ s pre-reorganization system is still in the exploratory stage.In practice,there are still no clear rules on how to initiate the pre-reorganization,which entity should formulate the pre-reorganization plan,and how to disclose information during the negotiation process.The above issues are related to the ownership of the pre-reorganization procedure.If exercised by different subjects,it will affect the role of the parties in the pre-reorganization procedure,which will result in different rights and obligations.The current pre-reorganization system has a government-led model(Wen Zhou)and a court-led model(Nan Jing,Bei Jing,etc.).In addition,in specific pre-reorganization practices,there are still debtor-led models and creditor-led models.It can be seen from this that the practice of pre-reorganization in my country has the characteristics of regionalization and individual cases.Pre-reorganization cases vary according to the different abilities of judges,and there is no uniform applicable standard.Therefore,it is of great significance to clarify the leading subject of pre-reorganization,regulate how the leading subject exercises leading power,and clarify what obligations it should undertake to other subjects.If the parties do not know their position in the pre-reorganization and the rules for exercising their rights in advance,it will increase the uncertainty of the transformation of pre-reorganization into reorganization procedures,reduce the parties ’ enthusiasm for choosing pre-reorganization to help the enterprise get out of the predicament.The pre-reorganization system failed to achieve the expected results.The article mainly has five chapters.Chapter 1 introduces the operational paradigm and system advantages of pre-reorganization,as well as the transformation of the rights of debtor shareholders after entering the pre-reorganization procedure,and analyzes the practical exploration of my country’s pre-reorganization dominance system.The first section first introduces the operational paradigm of the pre-reorganization system.Our country’s pre-reorganization has gradually developed into two operational paradigms.One is that the parties freely negotiate before deciding whether to apply for reorganization to the court;the other is that the parties first apply to the court for pre-registration before starting negotiations.The second section introduces the comparative advantages of the pre-reorganization system,bankruptcy reorganization and out-of-court reorganization:compared with bankruptcy reorganization,pre-reorganization has the advantages of reducing costs,improving efficiency,reducing the negative impact on corporate goodwill,retaining corporate control and financing;compared with out-of-court reorganization,pre-reorganization has the advantage of being able to effectively solve the problem of "control" and produce bankruptcy reorganization.The third section analyzes the transformation of the debtor’s shareholders’ rights in the pre-reorganization process.The rights of the debtor ’ s shareholders in the pre-reorganization process need to be restricted,but the shareholder ’ s decision-making power should not be excessively deprived.Shareholders can seek the opinions of creditors.Make a decision,or make a decision and submit a resolution to the creditor for review.The fourth section introduces the practical exploration of my country’s pre-reorganization dominance system from three aspects: the decision power to initiate the pre-reorganization procedure,the formulation power of the pre-reorganization plan,and the decision-making power of the business affairs during the pre-reorganization period.Chapter 2 is mainly an analysis of the ownership of the pre-reorganization dominance.The first section points out two issues that need to be paid attention to when determining the ownership of the pre-reorganization leadership:one is the information asymmetry caused by the debtor’s dominant position in information;the second is the problems arising from the conflict of interests of related subjects.The key problem is that the roles of related parties are fuzzy and the boundary of the debtor’s rights is unknown.When allocating dominance,the above issues need to be fully considered to prevent abuse of dominance.The second section divides the pre-reorganization subjects into private rights subjects and public power subjects,and analyzes what kind of interest appeals the distressed enterprises,creditors and corporate employees,governments,and courts have in the pre-reorganization process,and what the effects are on the pre-restructuring process when they are the leaders of the pre-restructuring.Chapter 3 introduces the foreign regulations on the pre-reorganization leader system and related exercise rules.This chapter compares the pre-reorganization systems of several typical countries in Europe,America and the Asia-Pacific region,summarizes the commonalities and differences of the pre-reorganization systems of various countries,and provides a reference for the improvement of my country’s pre-reorganization systems.Through analysis,the article believes that the following points are worth learning from our country.First,the allocation of dominance needs to be fully integrated into the national conditions of the country.The allocation of pre-reorganization dominance in our country has the characteristics of differentiation,and the practices in each place are not uniform,which can easily cause problems such as unclear rights and responsibilities of relevant subjects and excessive discretion of the court.When we allocate pre-reorganization dominance,we need to fully consider relevant factors and formulate a dominance allocation system that suits my country’s national conditions.Second,out-of-court reorganization is inseparable from the support of a sound bankruptcy legal system.Out-of-court reorganization is a process of free negotiation between the parties,but if you want to be approved by the court,you must abide by the corresponding rules.If there is a complete set of bankruptcy legal system as support,it can increase the possibility of successful out-of-court reorganization.Third,the will of major creditors is crucial.Foreign countries stipulate that the pre-reorganization plan only needs to obtain the consent of the majority of creditors,especially the main creditors,before it can be submitted to the court for review.Fourth,the help of professional institutions is needed.Pre-reorganization involves the financial situation,business situation and legal content of the enterprise.Experts and professional institutions can provide professional guidance and assistance to the parties,and make suggestions on the financing,finance,operation and law of the enterprise.Fifth,sufficient information disclosure must be carried out.Various countries have more or less stipulated the information disclosure system,and the court will decide whether to approve the pre-reorganization plan based on whether the information disclosed by the debtor is composed and whether there is behavior that harms the interests of creditors.Chapter 4 analyzes which subject in our country should have the leading power of the pre-reorganization procedure,and clarifies the scope of the power of the leader,and under what circumstances should its leading power be adjusted.The article believes that pre-reorganization should be a process led by the debtor,and there is no need to appoint a manager to take over the enterprise.In principle,the court should not interfere in the negotiation process between the parties,otherwise it will affect the pre-reorganization of the autonomous negotiation attributes and weaken the characteristics of marketization.However,the debtor needs to delegate some of its powers to others in the pre-reorganization procedure,for example,it can be exercised by an independent third-party intermediary agency jointly entrusted by the creditor and the debtor.Debt liquidation and asset investigation are the basic procedures for pre-reorganization and the basic bargaining chip for the parties to play the game.This power is delegated to an independent intermediary agency to ensure the truthfulness and adequacy of information and provide a fair and just negotiation environment for all parties.As for the rights of revocation,since the debtor basically will not revoke his actions,these powers should also be exercised by intermediary agencies.Of course,depending on the circumstances of each case,the above division of powers should also be adjusted appropriately.For example,when the debtor’s management does not have the ability to reorganize,conduct acts that damage creditors,etc.,the debtor’s leading right should be restricted or even deprived.Chapter 5 makes perfect suggestions on the specific exercise rules of the rights of the debtor-led pre-reorganization procedure.The article believes that debtors should be regulated from three aspects: the initiation of the pre-reorganization procedure,the information disclosure during the pre-reorganization period,and the formulation and approval of the pre-reorganization plan.At the same time,by introducing a guiding mechanism,attaching importance to the role of creditor committees,and giving play to the government’s coordination role in pre-reorganization,various behaviors of debtors can be supervised and protected.