Protection Of The Interests Of Creditors In Corporate Restructuring System

The reorganization system is a fabulous fruit of the reformation to bankruptcy law in western countries. The chief purpose of reorganization is to prevent difficult enterprises from going bankrupt and to realize the salvation of such enterprises, which is the inherent requirement and outer embodiment of social-standard legislation trend. In order to ensure the ultimate promising result of reorganization, the reorganization proceedings of almost every country restrict the creditors from exercising their security interests in a certain extent. However, quite a few debtors just utilize such system to avoid their bankruptcy, to delay repayment of their debts, and to impair the interests of creditors. How to balance and distribute the interests among the society, the creditors and the debtors becomes the big challenge to the legislators of every country. The Draft of the PRC Enterprise Bankruptcy Law (hereinafter referred to as "Draft") was submitted to the Standing Committee of the National People's Congress for discussion on July 21, 2004. One of the breakthroughs of the Draft is that it contains a separate chapter named "Reorganization". This dissertation uses the stipulations of western countries on reorganization for reference, and analyses the relevant provisions in the Draft based on the view of protections of creditors. Unlike bankruptcy proceedings, the reorganization proceedings restrict the secured creditors from realizing their security interests, which indicates the major restraints upon creditors in the reorganization proceedings. Therefore, this dissertation focuses on the disposal and protections of secured creditors' rights, and also analyzes on the protections of unsecured creditors' rights considering the specific features of such creditors' rights separately. Furthermore, this dissertation provides legislative advice and suggestion regarding the protections of creditors' interests in the specific mechanisms in the reorganization proceedings, including the initiation of reorganization, draft of the reorganization plan, vote on the reorganization plan, implementation of the reorganization plan and supervision thereof, etc.