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Protection Of Dissenting Creditors In The Corporate Reorganizations

Posted on:2007-12-23Degree:MasterType:Thesis
Country:ChinaCandidate:X H WangFull Text:PDF
GTID:2166360212485444Subject:Civil and Commercial Law
Abstract/Summary:PDF Full Text Request
The Enterprise Bankruptcy Law (1986) cannot meet the further development of our economy; therefore we have been trying to draft a new bankruptcy law since the middle of 1990s. We incorporate the corporate reorganization system into our bankruptcy law draft, which is being reviewed by National People's Congress Standing Committee.The new law draft has many defects on the protection of the dissenting creditors, mainly overly dependent on the decisions of the majority creditors. The author has studied the American bankruptcy law deeply and has built up the framework of the counterpart of the U.S. system. The general dissenting creditors can be protected by the best interest doctrine and they can challenge the feasibility and fairness of the reorganization plan. Our draft limits the best interest doctrine to the unsecured creditors in the compulsory confirmation of the plan and also doesn't generally require the feasibility of the plan as a rule. The absolute priority doctrine is specially designed for the unsecured creditors, which is also challenged by the debtor-in-possession with the new value exception theory in the U.S.. Our draft has designed a different means for the unsecured creditors that the shareholders cannot claim the dividends during the reorganization period but the creditors cannot substantially benefit from this device. The author suggests that the shares of the company should be divided between the creditors and the current shareholders. As to the secured creditors, the American law stipulates the automatic stay to hold back the enforcement of the lien, but also stipulates the adequate protection and lifting the stay, which are aimed to prevent the lien from being harmed unreasonably. In the cramdown, the American law creates three kinds of fair and equitable treatments for the secured creditors. In the comparison, our draft's previsions are vague and cannot protect the secured creditors effectively.It's the starting point and the destination of this paper to build up a comprehensive system to protect the creditor in our new law, under the careful examination of the advanced legislations in foreign countries and our local specialties.
Keywords/Search Tags:Corporate Reorganization, The Best Interest Doctrine, The Absolute Priority Doctrine, New Value Exception, Fair and Equitable Treatment
PDF Full Text Request
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