The Administrator Of The Liability System. Bankruptcy Proceedings

This article, by referring to the values of insolvency law and clarifying the legal status of the administrator, tries to establish the legal basis and theoretical origins of the administrator liability system under the insolvency procedure considering the disputes unfolding around different opinions in terms of the administrator liability system. Specifically speaking, comparative research methodology is adopted to analyze the legal status, liability of the administrator, the way to implement and strengthen liability. This article is divided into 5 chapters to systemize author's opinions in terms of aforesaid issues. The first chapter is the general description of the administrator in the insolvency procedure. The analysis of the administrator concept and scope of powers and function of administrator under different procedures leads to the jurisprudence basis of the individual as the administrator. This chapter mainly focuses on the legal status of the administrator. By comparing the "mandatory agency theory" and the "the creditors representative theory" etc, the author comes to the conclusion that the administrator shall exercise its powers and functions on behalf of creditors. The second chapter analyses the theoretical grounds of the administrator liability aiming at articulating the fiduciary relationship between the administrator and stakeholders under insolvency circumstances. By making an comparison between the agency model and fiduciary model, the author confirms that the administrator shall not only bind by the willing of one party but handle and manage the insolvent asset in an objective and fair way when it takes over the responsibility to deal with insolvency affairs. Consequently, a restrictive mechanism shall be established to achieve the objectives of the administrator, that is the fiduciary model. Because the contract embodies the fairness. In accordance with "the freedom to enter into contract theory ", the administrator and the stakeholders are equally positioned. Equally positioned parities are not expected to enter into a contract whose terms are to their detriment. Thus, where the administrator enters into contract, there is a self-disciplining factor to prompt the administrator to bear responsibility, which can lead to fairness and efficiency. In the meantime, by reference to the expert liability theory, the obligation of the administrator shall include: duty of reliability, loyal duty and the duty of care. The third chapter points out the fiduciary relationship between the administrator and the stakeholders is different form that occurring between the management and shareholder by comparing the liabilities of the directors (including the management)of the corporation under normal conditions and those of administrator under insolvency circumstances. Despite the fact that the administrator shall be responsible for the rights and interests of creditors during the overall insolvency procedure, but it shall act in a neutral way and balance the interests of different interested parties. Based upon its powers and functions permeating through each and every stage of the liquidation, reorganization procedure, corresponding mechanism shall be established to regulate its behavior. The fourth chapter deliberates upon the realization and implementation of the administrator liability. By reference to compare different practices in different countries to select the administrator in order to ascertain the proper model for china in selecting administrator, the author points that administrator shall be appointed by the creditors and confirmed by the court. The powers and functions of the administrator permeate into every aspect of the insolvency procedure with the possibility that the powers and functions may be abused. Therefore, powers and functions shall be limited. This chapter sets up restrictive measures in four aspects to strengthen its liability including the liability insurance system, the administrative system, civil liability and criminal liability. This chapter mainly concentrates upon liab...