Research On The Starting Rules Of The Substantive Merger And Bankruptcy Of Affiliated Enterprises

With the development of economic globalization,in order to expand benefits,reduce operating costs,and resist market risks,companies will choose to increase economic efficiency by expanding their scale.The most typical manifestation of this trend is the emergence and rise of a large number of related companies.From a legal perspective,any company with an independent legal personality should bear limited legal liability with its own assets.However,with the development of the market economy,the economic relations between some affiliated companies have become closer and even threaten the independence of the company.Personality status has also produced a series of hidden problems.Compared with the traditional bankruptcy of a single enterprise,the bankruptcy of related enterprises has its own particularities.The existing rules of the bankruptcy law do not of course apply to the bankruptcy of related enterprises.Bankruptcy initiation is the key to the enterprise’s entry into bankruptcy proceedings.It involves various specific links and conditions from the filing of bankruptcy applications to acceptance,including specific issues such as the definition of bankruptcy reasons,the filing of bankruptcy applications,jurisdiction,and the acceptance of bankruptcy applications.The current bankruptcy law’s regulation of bankruptcy initiation is based on a single enterprise,and does not consider the special type of affiliated enterprise.For affiliated companies that have substantive merger conditions,if the traditional bankruptcy model is still applied to separate corporate bankruptcies,then the abnormal benefit transmission of some affiliated companies that need to be merged before bankruptcy directly infringes on the interests of creditors,making it difficult for creditors to effectively protect their rights through legal means,This is not fair to creditors.The current bankruptcy law does not have special provisions to regulate such illegal acts between affiliated enterprises,and the continued application of the current bankruptcy law to its regulation cannot solve many problems that arise in the initiation of the merger and bankruptcy of affiliated enterprises.It can be seen that the current bankruptcy law has certain limitations in dealing with the issue of the initiation of the substantive merger of related companies.There are many discussions and researches in the academic circles about the bankruptcy of related enterprises,but there are few systematic researches on how to initiate the merger and bankruptcy procedures of related enterprises.In the judicial practice of bankruptcy,local courts have conducted various explorations and attempts on the initiation mode and path of the merger and bankruptcy of related enterprises,but the practices are not consistent.At present,the initiation of merger and bankruptcy of affiliated companies urgently requires systematic research to ensure that a wide range of market entities,including affiliated companies,can achieve fair debt repayment and corporate rescue through bankruptcy in an orderly manner.The first chapter is the research on the particularity and significance of the initiation of substantive merger bankruptcy.The particularity of substantial merger is the logical starting point of this article.The existing bankruptcy rules triggered by the particularity do not apply to the bankruptcy of affiliated enterprises,and the demands of the bankruptcy of affiliated enterprises caused by the particularity on the rules form a logically progressive relationship with other chapters of this article.The particularity of the substantive merger of related enterprises is manifested in three aspects,namely: the pluralism and unity of the main body,the mixing and merging of property,and the adjustment and balance of interests.The particularity of the substantive merger of related enterprises has an impact on both the substantive and procedural requirements of bankruptcy initiation,and it also raises specific requirements for rules.It is manifested in such things as how to establish the cause of bankruptcy,whether the applicant should be expanded,whether the bankruptcy commencement can be an exception to the applicable power model,and how to determine the jurisdiction of affiliated enterprises belonging to different regions.The research on the rules for the initiation of substantive mergers and bankruptcies has extensive significance and value.It helps to clarify the scope of application of substantive merger bankruptcy based on particularity,guarantee the fairness and efficiency of bankruptcy procedures,and enrich and perfect the existing theories of bankruptcy initiation.It is conducive to allowing a wide range of market entities including affiliated companies to participate in the bankruptcy process in an orderly manner.The second chapter is the analysis of the reasons and standards of the bankruptcy of the merger of related enterprises.The cause of bankruptcy is the basis for the initiation of bankruptcy.This chapter focuses on the economic and social environment of related companies,and makes a series of overviews of the actual dilemma in establishing the cause of bankruptcy of the merger.On this basis,the criteria and reasons for the substantive merger and bankruptcy of related enterprises are proposed.Associated enterprises obviously have more than or equal to two enterprises,so they are different from the bankruptcy reason standard of a single enterprise in terms of which requirements are met to meet the standard definition of bankruptcy reasons.However,it is worth noting that the reasons for bankruptcy of affiliated companies should still comply with the existing bankruptcy reasons.The only difference is that if the increase in the number of entities makes the entire group meet the conditions of bankruptcy reasons,whether each member company must also meet the bankruptcy reasons before entering bankruptcy The problem of procedure.At the same time,there should be a clearer measurement standard for the application of the substantive merger principle to related enterprises.At present,the main basis for this judgment in my country is whether the legal personality has reached the level of confusion.However,according to theories and practices,there are still other possible effects in reality.Factors that apply the principle of substantive merger to the bankruptcy of related enterprises.Whether other factors that affect the application of substantive merger should be considered comprehensively and how to consider these factors is also a major issue discussed in this chapter.The third chapter is the analysis of the rules of bankruptcy applications of affiliated enterprises.Filing an application is a prerequisite for the commencement of bankruptcy proceedings.This chapter explores the choice of applicants in the context of the substantive merger of affiliated companies and whether an exception can be applied to the power system to initiate bankruptcy proceedings.In the selection of applicants,the creditors,debtors,bankruptcy administrators,investors and liquidation agents are analyzed separately,and it is proposed that creditors,debtors,and administrators are generally applicable applicants,and investors and liquidation agents are specific Subject of the application under the conditions.The initiation of bankruptcy proceedings ex officio is currently not generally recognized by the academic circles,but in view of the trend of socialization of bankruptcy law functions and the troubles caused by the single application system,the functional value of initiating bankruptcy by the power system should not be completely denied.In fact,although the bankruptcy initiation model of the filing system can guarantee the voluntary autonomy of the parties to exercise their rights,it does not fully meet the needs of the establishment of the bankruptcy system.In practice,bankruptcy applicants often fail to file applications due to lack of application action.Circumstances have led to my country’s "enterprise bankruptcy rate is still far below the normal rate of ordinary countries,highlighting that the bankruptcy law has not yet fully played its role in social adjustment.It is sometimes very difficult to solve the bankruptcy problem solely relying on the application of the parties.Affiliated companies involve a large number of people and involve a wide range of interests,sometimes not just as simple as "personal interests".The bankruptcy of affiliated enterprises has already involved a wide range of social order and interests.Therefore,it is worth discussing to rely on the court’s authority to initiate an exception when the eligible subject does not file an application for bankruptcy.The fourth chapter is the analysis of the jurisdiction rules for the merger and bankruptcy of related enterprises.Jurisdiction is the key to initiation of bankruptcy,and the effective initiation of bankruptcy proceedings is conditional on the existence of jurisdiction.The competent judicial authority can only decide whether to accept the bankruptcy application after reviewing the bankruptcy application.The determination of bankruptcy jurisdiction concerns the interests of the parties,the courts and the society.Compared with ordinary single-enterprise bankruptcy cases,the jurisdiction of substantive merger bankruptcy is more complicated.In real life,the development relationship of affiliated enterprises is complicated,and it involves a wider range of regions,and some affiliated enterprises may even have problems with transnational development.Each affiliated enterprise is located in different regions,and the regional economic development situation is also different,and the degree of impact of the bankruptcy of the affiliated enterprise on the local society is not consistent.These problems are widespread in practice and become an obstacle to solving the bankruptcy of the affiliated enterprise.Therefore,the establishment of the jurisdiction principle is of great significance to the application of substantive merger and bankruptcy.The jurisdiction of the substantive merger shall follow the "principle of the center of interest" and the "principle of first application".The "interest-centricity principle" should be established as a universal principle,and the "first application principle" should be used as the basis for the establishment of jurisdiction when the "interest-centricity principle" cannot be applied.The fifth chapter is the analysis of the acceptance and review rules of the merger and bankruptcy of related enterprises.The acceptance and review of bankruptcy is the decisive stage of bankruptcy initiation.This chapter focuses on the discussion of how affiliated companies with bankruptcy reasons and affiliated companies without bankruptcy reasons are included in the scope of consolidated bankruptcy,which is directly related to the issue of creditor interest adjustment.Since the investors and creditors of affiliated enterprises often make different voices based on their own interests,especially the affiliated enterprise creditors who do not have bankruptcy reasons,because they are included in the bankruptcy procedure will lower their existing debt repayment rate,and they will especially take a stand of opposition.The solution to the above problems is to put in the hearing and reconsideration procedures in due course.There is considerable controversy as to whether the decision on a substantive merger requires the creditors’ meeting as the pre-procedure and necessary conditions.Because the substantive merger is a factual determination involving the relationship between affiliated enterprises,the decision by the court is more reasonable.At the same time,such procedural arrangements may bring objections to the parties,thereby reducing resistance to the protection of the parties’ right to object and the smooth progress of the bankruptcy procedures.Relief procedures should be set up to ensure the realization of their rights.The sixth chapter is the research on the legal consequences of accepting the substantive merger and bankruptcy of affiliated enterprises.In order to maintain the fair compensation rights of all creditors in the affiliated enterprises and ensure the smooth progress of the bankruptcy proceedings,it is necessary to explore the effects of the bankruptcy proceedings after they begin.The acceptance of bankruptcy applications,as a sign of initiating bankruptcy proceedings,will have legal effect on the organization,procedures,and entities of the bankruptcy proceedings.Associated enterprises are clearly different from single-enterprise bankruptcy due to the most significant subject particularity.Therefore,questions arise such as whether the legal effect of an associated enterprise’s bankruptcy is different from that of a single-enterprise bankruptcy,and what changes have been made to the entire procedure,What is the impact on the entity’s rights of the parties? In fact,the legal effect of the bankruptcy of an affiliated enterprise is in common with the effect of the bankruptcy of a single enterprise,and there are also obvious differences.In terms of organization,related enterprises are involved in the selection of managers due to the large number of entities;in terms of procedures,the rules for prohibiting debtor’s repayment,suspension of execution procedures,and removal of preservation measures are consistent with the original procedures,but the reasons involved For substantive merger matters,the new substantive merger objection procedure is added.This is also the main difference in the procedures for the bankruptcy of related enterprises from a single enterprise;in terms of substantive rights,it is mainly reflected in the adjustment of rights and interests between creditors and debtors.These are the legal effects of the acceptance of bankruptcy applications of affiliated companies,and are of great significance to the subsequent bankruptcy procedures.