The Theoretical Logic Of Debtor In Possession System In Reorganization

This thesis mainly studies on the logical construction of debtor in possession system in reorganization,takes the most sound and refined reorganization system in the United States as the research object,reflects on the operational defects of the reorganization system in China and puts forward corresponding market-oriented reform proposals.The writing purposes of this paper can be divided into the following three aspects: First,this paper reviews the history of the emergence and evolution of the DIP system in the United States and explores the economic,cultural and social reasons behind its emergence.On the basis of combining the supporting idea,justification basis and practical utility of DIP system,this paper deeply analyses the operating logic of DIP system.Secondly,starting from the perspective of participants of the bankruptcy reorganization system in China,the defects and shortcomings in the practice of the reorganization system in China are analyzed.Finally,on the premise of fully considering China's special national conditions,the corresponding reform plan is put forward.The early bankruptcy legislation of the United States did not stipulate the reorganization system,on the contrary,the system originated from the system of Equity Receiverships in the late 19 th century.After the reorganization system was formally established by Chandler Act,it failed to fulfill its duty,so the U.S.Congress passed the current U.S.Bankruptcy Act in 1978,and the DIP system was established.The emergence and development of the DIP system are deeply influenced by the economic growth of the United States,especially the expansion of the credit system,The importance of the reorganization system is highlighted by the cyclical cycle of the economy and the necessity of debt exemption,and a bankruptcy reorganization system characterized by "forgiveness" seems more appropriate for the protection of market participants.With the process of economic globalization,more and more countries are aware of the critical role of DIP system in resource allocation,a large number of debt growth and default problems in China have also provided the corresponding soil for the establishment of DIP system in recent years.The establishment of DIP system in American legislation in 1978 changed the rigid and inefficient bankruptcy reorganization system under the Chandler Act.The ultimate goal of DIP is to unify the efficiency and fairness.By the construction of negotiation system,the DIP system is able to maximize the efficiency of bankruptcy reorganization system and to reduce the externalities brought by bankruptcy reorganization system.The practical utility of DIP in bankruptcy reorganization system,such as the increase of filling rate,the preservation of going-concern value,respect for party autonomy and flexible system form,etc,renders the creditors in the DIP system more protection than under the Chandler Act whose core theory is the "creditor control".The bankruptcy reorganization system itself also carries more social values and objectives.The main negotiators under DIP system: debtor,secured creditors and unsecured creditors have contradictory and conflicting interest demands,without the effective system construction,the rational rights claim behavior of each negotiator will eventually lead to collective irrational "negotiator dilemma".As a result,DIP system builds an effective negotiation environment through relatively relaxed commencing conditions of cases,automatic stay system,operation rights of debtor,exclusive period for filling reorganization plan,adequate protection of secured creditors,and creditors' Committee.Under the DIP system,the judicial power will leave room to the private rights,and the negotiators will form a "private ordering" within the limits of the law,and freely explore the optimal solution of resource allocation.The historical development logic of bankruptcy system shows that,as the normal phenomenon under the condition of market economy,the function of bankruptcy system should not be confined to negation,blame and liquidation,but to salvage,repair and reorganization.As the DIP system,which focuses on reshaping the commercial value of bankrupt enterprises,it contains the value appeal of representational significance.From focusing on the two dimensions of creditors and debtors to integrating social interests,the DIP system shall respond to the fair value.In order to enable the reorganized enterprise to operate continuously and steadily,the DIP system has realized the maintenance of order value.The incentive and supervision mechanism embodied in the DIP system guarantees the maximization of output in the case of limited resources,which reflects the efficiency value of the system.As a market regulation mechanism,DIP system has the characteristics of judicial intervention.However,the intervention of judicial power should not overstep the judgment of commercial decision-making of private rights.The necessity and appropriateness of intervention are as important as the autonomy and independence of enterprise operation.The path followed by the DIP system is the choice under the balance of public power and private rights.Compared with the DIP system in the United States,the bankruptcy reorganization system in China,in which agencies act as administrators,is far from playing the role envisaged by legislators.In practice,the subjective initiative of the debtor is not fully respected,and the number of reorganization cases is low.The limited risk-taking ability inherent in administrators leads to conservatism in risk-ridden bankruptcy reorganization proceedings.The serious insufficiency of creditors' participation has led to the intervention of judicial power,but the expansion of judicial power can easily lead to the waste of judicial resources,even the formation of institutional bias.In addition,there are still a lot of administrative interference in practice.The bankruptcy reorganization system in China has a serious Planned Economy color and needs to be improved in the direction of marketization.Finally,the thesis investigates the operation status of the DIP system and related systems in China,and puts forward suggestions for reform and improvement.Firstly,it discusses the applicable conditions of the DIP system,including the applicant and time of the application for DIP,the applicable conditions of DIP,and advocates the establishment of the withdrawal and revocation system of DIP.Secondly,it examines the allocation and operation of the debtor's rights under the system of DIP,and analyses the allocation and balance of the rights of the debtor,the administrator,the creditor,the shareholders' meeting and the board of directors of the debtor under the system of DIP.It is believed that the dominant role of the actual controller leads the actual operation of the DIP,but the debtor should be represented by the board of directors.The shareholders' rights under the company law have been basically lost,but they still have the right to know,the right to object to important matters and the limited right to elect directors.Regarding the administrator,this thesis argues that the mixed governance mechanism between the administrator and the debtor should be established,and puts forward practical suggestions on the supervisory measures of the administrator to the debtor.As for creditors,in reality,they need to strengthen their participation and control in the reorganization process.Creditors' committee,as the standing institution for expression of creditors' will,should be normalized and specialized in the reorganization,the cost of hiring professionals shall be regarded as administrative expenses.But it is not necessary to give creditors the right to propose the reorganization plan under the current situation.Finally,the prepackaged system associated with the DIP system is analyzed.On the premise of absorbing the core idea of American prepackaged system,the prepackaged system should be combined with China's national conditions.This paper proposes that the prepackaged system in China should be constructed by putting the automatic stay system before the reorganization so as to realize the negotiation atmosphere of all parties as soon as possible.After the prepackaged system is completed,the reorganization system should take the DIP as the default mode,and the relevant provisions of the CBRC on the establishment of creditor committee by creditors of financial institutions for distressed enterprises can be adopted and combined in the prepackaged system.The creditors' committee formed before the commencement of reorganization shall be retained in the bankruptcy proceedings,thereby reducing the costs and costs of the proceedings.