Research On Bankruptcy Reorganization System From The Perspective Of Social Welfare Maximization

The reorganization system can both fairly liquidate debts and promote the revival of debtor companies.The reorganization system provides new ideas for dealing with corporate bankruptcy and is one of the most important tools for promoting structural reform on the supply side and improving the business environment.Compared with bankruptcy liquidation and settlement,reorganization is a complex and lengthy process that involves many stakeholders(including creditors,debtors,reorganization investors,government and courts).Each stakeholder has its own demands and preferences,and reorganization is a game in flux.At present,conflicts of interest and contradictions among multiple parties in restructuring are frequent in China,making it difficult to maintain a solid and balanced relationship.In this paper,we analyze the difficulties of high procedural costs and low overall social benefits in the current restructuring practice from the perspective of maximizing social welfare,and explore the value orientation of the restructuring legal system.The paper discusses pre-reorganization,selection of reorganization investors,failure to execute reorganization plans,realization of reorganization tax claims,and reorganization credit repair,respectively.The paper analyzes the legal orientation of the reorganization system,reshapes the construction principles,and gives suggestions for the improvement of the reorganization system suitable for China’s national conditions.Reorganize legislation and judicial practice to maximize social welfare as the value goal.The reorganization system should aim to build a legal process that satisfies the preferences of various stakeholder subjects.Creditors’ motives for participating in reorganization are to become controllers of the debtor’s business and to obtain a higher rate of liquidation.The controlling shareholders of the debtor are motivated to participate in reorganization to preserve the reputation of the enterprise and to retain control of the company.Small and medium-sized shareholders are motivated by the desire to reap a return on their investment.Investors in restructuring want to reap the value of capital and resources through restructuring.Local governments actively facilitate restructuring for their own performance,local economic development,and to protect people’s livelihood.Courts hope to improve the business environment and enhance their dispute resolution capabilities through restructuring cases.From the perspective of maximizing social welfare,it is necessary to structure the bankruptcy reorganization system in China in a way that gives priority to judicial intervention,reorganization efficiency,and balanced protection of all interests.In order to solve the problem of time-consuming reorganization procedures,it is urgent to establish a pre-restructuring system.There are many problems with the pre-reorganization system in China,including the lack of clarity about the status of the participating parties,the unbalanced protection of their interests,the lack of a uniform legal system,and the lack of a reasonable procedural design.Pre-restructuring,as an independent debt dispute resolution mechanism,can serve as a link between out-of-court restructuring and in-court formal restructuring.Its goal is to minimize the costs of restructuring administration and errors and to improve the efficiency of resource allocation.In designing the restructuring system,it is important to clarify the status of each entity in the initiation and execution stages,and to balance the protection of the rights and interests of creditors,debtors and restructuring investors.We should make efforts to optimize the procedures for initiation,connection,succession and duration of pre-reorganization.Accelerate the legislative process of the reorganization system.It is necessary to improve the selection mechanism of restructuring investors in order to increase the operating surplus of debtors.In the light of the phenomena of the selection standard,the lack of procedure and the absence of the protection of the real rights and interests of the reorganization investors,this paper analyzes the economic behavior basis of the reorganization investors to pursue the maximization,the equilibrium and the efficiency,and compares the expected value,a competitive model should be introduced in the restructuring of investor selection.According to the principle of market economy,the principle of creditor autonomy and the theory of government control public interest,we select the suitable investors,establish the system of information disclosure and supervision,and confirm the priority of financing guarantee.In order to avoid the inefficiency of the reorganization and liquidation process,when the reorganization plan cannot be implemented because of changes in national policies and changes in laws and regulations,based on the theory of efficiency,the principle of change of circumstances and the principle of stakeholders,the change of reorganization plan should be permitted.When the reorganization plan is changed,the debtor and the administrator shall be the subjects of the application;the judicial restrictive provisions that can be changed only once shall be broken,and the number of changes to the reorganization plan shall be limited moderately,at the same time,it should add some essential elements of substantive and formal examination,list the debtor and the administrator as the subjects of the right to formulate the reorganization plan,and give the creditor the right to object The main body of voting right should be refined,and various voting methods should be adopted on-line and off-line,and“Double standards” should be adopted as the mechanism.Second-rate restructuring of tax claims and exemption of debt tax to promote social welfare maximization restructuring.According to the theory of interest-related party surplus,interest rank,tax as a debt of public law and tax capacity,the principle of relative priority should be adopted to realize the reorganization of tax creditor’s rights.The reorganization tax claim is inferior to the secured claim,and except that the tax within one year before the commencement of the reorganization has priority over the ordinary unsecured claim,the remaining tax claim is in the same level of satisfaction as the ordinary unsecured claim.In addition,the debt exempted from reorganization shall be excluded,and shall be tax-exempt at the creditors’ meeting by way of the release of the resolution.By speeding up the repair of corporate credit restructuring modest punishment.There are many practical difficulties in the credit repair of our country’s reorganization enterprises,in order to reduce the transaction cost of the reorganization market,we should pay more attention to the defects of the credit repair legislation,the weakening of the repair consciousness caused by the excessive punishment,the coexistence of the government function vacancy and the offside,and the insolvent administrator’s insufficient role,etc.,the establishment of an adaptive credit system and the maintenance of the rights and interests of all parties involved in the reorganization shall be guided by the government by the use of natural,explanatory and dissenting repair methods,to repair the credit of reorganization enterprises in the fields of finance,taxation,justice,industry and commerce,and improve the repair measures.Because of the distortion of the creditor’s rights and debts,the debtor’s enterprise cannot fulfill the maturing creditor’s rights.By reducing the cost of restructuring,increasing the benefits of restructuring legal system to protect the rights and interests of creditors,rescue troubled enterprises,while maximizing social welfare.