Study On The Pledge Of Shares Converted From Capital Reserve In The Reorganization Of Listed Company

In the reorganization of listed companies,in order to increase the debt servicing resources and ensure the success of the reorganization,it is often set shares converted from capital reserve transfer in the plan of shareholders’ equity adjustment,at this time,if the shareholders hold the current stocks are pledged,whether the act of the shares converted from capital reserve transfer is subject to the consent of the pledgee of the current stocks,there is a wide differences of opinions in the industry.In response to the above problem,the author took the case of reorganization of Pang Da Group as a sample to study and found that,in the execution procedures of listed companies reorganization,it must be agreed by the pledgee before the current stocks transfer,while the shares from capital reserve convert can be transferred directly without the consent of the pledgee.In judicial practice,the trial court clearly had a very large discretionary Power and operational flexibility in the transfer of above stocks.This greatly affects the rights and interests of the pledgees.After analyzing the equity attributes of the shares converted from capital reserve by combining the two mainstream theoretical views of "legal fruits" and "reorganization resources",this paper attempts to analyze in-depth from the perspective of "dual equity attributes",i.e.,the legal fruits as the first and original equity attribute of shares from capital reserve convert,and the reorganization resource attribute as the theoretical extension and succession on this basis.Therefore,in essence,the shares converted from capital reserve belong to all shareholders of the listed company,and the pledgee who enjoys the right to pledge the current stocks,should include the shares converted from capital reserve into the scope of pledge and enjoy the priority right to payment.In the reorganization of listed companies,the pledgees can only passively accept the reorganization plan but cannot do anything,also unable to participate effectively and have voice in the reorganization process as stakeholder,their legitimate interests are often "abducted" by the reorganization interests priority principle.Therefore,in the reorganization of listed companies involving the converting capital reserve into shares transfer,it has positive practical significance to give the right to the pledgees in order to participate and have voice in the reorganization.The current Enterprise Bankruptcy Law does not expressly provide how pledgees can effectively participate the reorganization proceedings.This paper introduces a hearing system for pledgees in the reorganization of listed companies from a theoretical and practical perspective,hearing inquiries into shareholders’ equity adjustment plan organised by the courts,in order to provide a platform for pledgees to participate the reorganization process,express their opinions and raise objections,and include the results of the hearing in the reorganization plan as a basis for the court to review and approval the reorganization plan.It also includes the pledgee as an stakeholders in the reorganization plan effects,laying the foundation for the subsequent enforcement of the reorganization plan.In the voting procedure of the reorganization plan,according to the "duality rule",the treatment of the listed company under the two situations of insolvency and capital meets debt is differentiated.When the listed company is insolvent,the transfer of shares converted from capital reserve must be approved by the pledgee;and when the listed company is able to cover their debts,in addition to vote by the group of shareholders,the consent of the pledgee must be obtained.In this way,balancing the interests of pledgees while protecting the reorganization interests priority principle.Finally,through a comparative analysis of foreign laws,it is suggested that legislation should be enacted to give enforcement effect to the reorganization plan,to solve the judicial dilemma that the reorganization plan cannot be effectively enforced due to the conflict between the shares converted from capital reserve transfer and the pledge of shares.