The Research Of Performance On Share Buy-back In Valuation Adjustment Mechanism

Before the “Minutes of Civil and Commercial Meetings” issued of Valuation Adjustment Agreement in our country law,the provisions were in a blank state.In 2012,the retrial result of “Haifu Case” was that the contract with shareholders was effective while the contract with the target company was invalid,which made the theoretical circle questioned the court’s “one-size-fits-all” approach.In 2019,the Huagong case which is retried by Jiangsu High Court put forward different views from the Haifu case.Jiangsu High Court recognized the effectiveness of the Valuation Adjustment Agreement affirmed the position of the target company as the legal subject,and also supported the terms of the share repurchase.Supreme People’s Court promulgates Minutes of Civil and Commercial Meetings,which puts forward to determine the effectiveness of specific rules.When there is no legal invalid reason,Valuation Adjustment Agreement which is signed by investors and investees is valid.When investees perform the agreement,they need to meet the precondition of share repurchase or cash compensation.That is,the people’s court will examine whether investees have completed the corresponding procedure in accordance with the procedure of withdrawing capital,reducing capital and rules of profit distribution in the Company Law.Although the Minutes of Civil and Commercial Meetings recognized the effectiveness of “betting against the target company”,in the actual operation,due to the complicated procedures and limitations of capital maintenance,the performance obstacles of share repurchase are not solved.By analyzing typical judicial cases related to “Valuation Adjustment Agreement”share repurchase,this thesis discusses and analyzes the performance obstacles existing in“Valuation Adjustment Agreement” share repurchase.The first part is discrimination of“Valuation Adjustment Agreement” share repurchase.First,it elaborates the stipulation of our Company law to the share repurchase,and compares the “Valuation Adjustment Agreement” share repurchase with legal share repurchase and other promissory share repurchase.Then,it compares the “Valuation Adjustment Agreement” share repurchase with the equity financing with repurchase article,which deepens understanding of“Valuation Adjustment Agreement” share repurchase.The second part discusses judiciary authorities’ conversion to the judgement of “Valuation Adjustment Agreement”share repurchase.First,it elaborates the development of judicial rules on “Valuation Adjustment Agreement”,which is from the dichotomy rule of judgement to the distinction between contract effectiveness and contract performance,and the emphasis is put on the performance problem.Then,it puts forward performance obstacles of“Valuation Adjustment Agreement” share repurchase-the difficulty of finishing enterprise capital reduction and limitations of the capital maintenance principle on the share repurchase.The third part discusses how to use principle of capital maintenance in the repurchase shares in the United States by references to the “surplus” and “solvency standard”,the Boards of Directors centrism in the case “Thought Works” to solve the problem in our country “Valuation Adjustment Agreement” share repurchase,which brings revelation on performance problems of VAM share repurchase.Finally,this part puts forward how to perfect our country the path of “Valuation Adjustment Agreement”share repurchases to solve the problem of difficult performance.The fourth part elaborates how to achieve the performance of VAM share performance.First,judge the performance capability of target company,and the target company certifies it has performance obstacles.Then,this part discusses the feasibility of installment or deferred payment for share repurchase.Second,this thesis discusses how to arrange the capital reduction procedure appropriately and settle the dispute of capital reduction when the target company repurchases shares in accordance with capital procedure.Last,the thesis discusses the treasury share is used for VAM share repurchase so that a new path for share repurchase is exploited.