A Study Of The Reorganization Procedure For Bankrupt In China

The reorganization procedure for bankrupt companies is thought to be an efficient procedure that avoids much unnecessary liquidation and reduces the social costs of bankruptcy. The procedure is accepted by most of the developed countries. It is also introduced to the new bankruptcy law of China.In this paper, the author detailed every aspect of the reorganization procedure for bankrupt companies, from the basic theories that support to the comparison of this procedure and other related procedures, such as compromise and bankrupt liquidation procedure. There are three most important theories that support reorganization, which are the going concern value theory, the communality of interest theory and the social policy theory. The author review the new bankruptcy law, highly exalt its significance. Since the procedure is newly introduced, there are still some flaws and loopholes, such as no special regulation for the listed companies. So the author discussed the problem in detail, trying to figure out how to solve the listed companies reorganization problem and giving some advises.The author discussed the debt-to-equity style reorganization and secondary public offering in an investors-protection perspective. The reorganization is with high risk, which could not be fully understood by ordinary investors. So the author in such way of reorganization, the investors must be qualified with some standards. The author also discussed how the reorganization procedure functions with the company law and the securities law. Thinking about the interpretation of the bankruptcy law, which is been made by the Supreme Court, the author gave some advices on it, hoping that would help to build a more efficient reorganization system in China.