A Study On The Subordination Of Shareholders' Creditor's Rights In Bankruptcy Proceedings

With the further development of the reform and opening-up,market economy has entered a new stage.However,some problems in the past stage still have not been solved at present.Financing difficulties of private enterprises is one of them.The phenomenon of difficult and expensive financing for private enterprises continues now.Under such circumstances,it is increasingly common for shareholders to provide loans to their companies.Therefore,it is a realistic problem that we has to be faced about how to deal with the shareholder's creditor's rights when the company goes into bankruptcy liquidation.From an economic point of view,the liquidation of creditor's rights of shareholders in the bankruptcy procedure is the mutual restriction of fairness and efficiency essentially.There is a wide range of studies on this issue abroad.The most common solution for this problem is Equitable Subordination Doctrine in the United States.In Germany,they studied the Doctrine of Equity Substitution.Domestic research is mainly focused on Equitable Subordination Doctrine in the United States.Experts have conducted comparative analysis and heated debates,forming two views about bring in Equitable Subordination Doctrine or not.The author thinks that if the creditor's rights of shareholders are paid equally with other creditors in the bankruptcy procedure,the interests of other creditors may be damaged.If the equal status of creditor's rights is not admitted,the original theories of contract law and company law may be amended,and the legal status of "limited liability of shareholders" may be endangered,which may lead to the redefinition of limited liability of shareholders,and then the traditional legal system will be changed subversively.Therefore,it is necessary to comprehensively study and draw on the successful experience of the relevant laws and judicial institutions of the two countries,and formulate rules suitable for China's national conditions.Chapter one starts from the concept of subordinated creditor's rights,emphasizes that subordinated creditor's rights has practical significance only when the company is facing bankruptcy liquidation,and summarizes its legal characteristics.Then this paper sorts out the development process of the legislation and judicial practice of subordinated shareholder's creditor's rights in China,and points out that because of the lack of related rule,the relevant court cases are numerous but the result is completely unpredictable.Chapter two tries to explore the theoretical basis of subordinated shareholder's creditor's rights in the domestic law,and thinks that the civil law,the company law and the bankruptcy law all can provide sufficient basis for the secondary compensation of shareholder's creditor's rights.Considering that the subordination rule of shareholder's rights has been developed for a long time in foreign countries,chapter three focuses on the investigation of the emergence and development of Equitable Subordination Doctrine in America and the Doctrine of Equity Substitution in Germany,then puts forward its own views on the places for reference.Chapter four firstly analyzes the necessity of introducing the subordinate rule of shareholder's creditor's rights into the domestic law,and then puts forward specific suggestions on the establishment of the subordinate rule of shareholder's creditor's rights.It is expected that this study can provide some references for China to introduce this rule,and make some supplements for the improvement of relevant legislation in China.