On The Role Of The Courts In The Corporate Reorganization Procedures

When enterprises were first established,business enterprises only need to operate within their own commercial objectives and norms. However, with the maturing of the economy, the advancement of society, and the increasingly broad and complex interaction between businesses and society, it is no longer possible to consider the activities of businesses in isolation from societal and other public considerations. Thus today when an enterprise goes out of business or faces insolvency, the impact of closing down the enterprise extends beyond the enterprise itself. As the goal of corporate bankruptcy laws is to protect societal and public interests, the reorganization procedures in corporate bankruptcy laws will attract increasing scrutiny and assessment. Just as the objective of bankruptcy laws in any corporate insolvency is to realize the fair reimbursement to all corporate debtors, albeit at the expense of some interested parties, reorganization procedures have also evolved to preserve corporate goodwill with a view to facilitating continued economic prosperity and social stability. To realize such objectives, the courts have to play an increasingly important role in the reorganizing process. Aside from the traditional functions of the courts, the reorganization procedures themselves place special demands on the courts. Although corporate reorganization laws and procedures vary from country to country, these differences only mask the common essence behind these apparently different laws and regulations. This thesis starts with a jurisprudential discussion of the relationship between the judicial functions and the implementation of bankruptcy laws. It then examines the distinctive requirements of corporate reorganization procedures and the special demands they place on the courts. Next, the thesis describes the corporate reorganization laws and procedures of the United Kingdom,the United States, Japan and France and the respective roles and functions of their courts, and reviews them for their similarities and differences. Finally, this thesis examines our current bankruptcy law. Due to its inherent shortcomings, it has been strongly criticized for many years, and has been the subject of legal reform. Since the new draft bankruptcy law is currently being considered for enactment, the last part of this thesis will focus its analysis on the judicial functions in the reorganization procedures in the draft bankruptcy law. With reference to the equivalent procedures in the foreign procedures examined above, this thesis will consider whether these new reorganization procedures -to be formally established for the first time by law –have adequately empowered the courts to discharge their duties in corporate reorganization and whether these procedures could be carried out successfully. In the light of this review, this thesis ends by offering some reform suggestions to address any deficiencies that are identified in the draft bankruptcy law.