Analysis Of The Reasons And Economic Consequences Of Introducing Trust Plans Into Bankruptcy Reorganization

As a buffer zone for bankruptcy liquidation,bankruptcy reorganization can carry out asset restructuring and debt restructuring for enterprises,create new value for enterprises,and prevent direct declaration of bankruptcy.It plays an irreplaceable role in making up for the shortcomings of bankruptcy reconciliation and bankruptcy rectification systems,and preventing social problems caused by the bankruptcy of large companies.The trust plan in bankruptcy reorganization refers to the establishment of a trust by an enterprise using assets originally used to pay off creditors’ rights after the commencement of reorganization proceedings,and the appointment of a third-party independent trust institution as trustee,with creditors as the beneficiary.After the promulgation of the "Company Bankruptcy Law of the People’s Republic of China" in 2007,the number of bankrupt and reorganized enterprises in China has gradually increased,and the trust industry is gradually developing to serve the real economy based on policy guidance in the future.Trust plans will play a greater role in bankruptcy and reorganization.In order to make trust plans better applied to bankruptcy and reorganization,this article studies the motivation and economic consequences of introducing trust plans into bankrupt and reorganized enterprises.This article selects the bankruptcy and reorganization case of Kangmei Pharmaceutical Co.,Ltd.as a research case.Kangmei Pharmaceutical Co.,Ltd.is a leading enterprise in China’s pharmaceutical industry,and its bankruptcy and reorganization has caused tremendous impact in society.This article first introduces the bankruptcy reorganization case of Kangmei Pharmaceutical,focusing on the bankruptcy reorganization background,reorganization timeline,reorganization value,and trust plan of Kangmei Pharmaceutical.Secondly,it analyzes the motivation for Kangmei Pharmaceutical to introduce the trust plan from the perspectives of enterprises,creditors,debtors,and trust companies.Finally,it analyzes the economic consequences of introducing trust plans into Kangmei Pharmaceutical’s bankruptcy reorganization from three aspects: stakeholders,financial performance,and market impact.The study found that,first of all,through the introduction of a trust plan,the liquidation rate of ordinary creditors’ rights reached 100% in the bankruptcy reorganization of Kangmei Pharmaceutical,while the asset-liability ratio of Kangmei Pharmaceutical significantly decreased,and its debt paying ability and operating ability were enhanced,gradually returning to normal operation;Secondly,Kangmei Pharmaceutical’s bankruptcy reorganization has protected the interests of creditors through the introduction of a trust plan.Creditors have a legitimate beneficial interest in the trust,which increases the likelihood of obtaining income in the future,and this interest is likely to generate higher value in the future than the trust assets themselves;Thirdly,the introduction of the trust plan also allows Kangmei Pharmaceutical to retain its core assets,which can continue to maintain its business operations in the future;Finally,the trust plan helps investors take over the enterprise at a smaller capital cost,achieving their strategic investment objectives.At the end of the article,I put forward relevant suggestions on the introduction of trust plans for bankrupt reorganization enterprises from both corporate and government perspectives,hoping to improve the current research on the application of trust plans in bankruptcy reorganization in China.