"deep Rock Doctrine" Application Of The Law

Nowadays, controlling company and the subsidiary is the main form of affiliated enterprise, which is playing an important role in economy. The traditional corporate law was based on single enterprise, therefore, rapid development of affiliated enterprise strike to traditional law sharply. For example, the protection of creditors in puny state because of affiliated relationship is bringing attention of legal profession in most country. "Deep-Rock doctrine" is a legislative exploration about whether the controlling company's fights as a creditor should be discharged subordinately when the subsidiary was bankrupted. The "Deep-Rock Doctrine" originated from a judicial precedent in U.S.A, which is a principal in processing the parent corporation's rights as a creditor during the bankruptcy process of its subsidiary corporation.Now there is almost no contradiction on the necessity of the import of "Deep-Rock Doctrine" in our country. However, the existing studies on associated companies and "Deep-Rock Doctrine" theory focuses mainly on relatively macroscopical areas including the introduction of relevant theories, the necessity, significance and feasibility of establishing such legal systems in China. As to "Deep-Rock Doctrine", it was always just mentioned when talking about the "Piercing the Corporate Veil" theory. There is no profound and special research on the problems concerning utiliTation such as the degree, condition and result of the subordination of controlling corporation's obligatory right, the particular disposal measures and procedures, the disposal principals for different kinds of obligatory rights, and the amalgamation into the existing legal system, etc.For understanding and solving these problems exactly, the text is divided into six parts to discuss the problems on application of"Deep-Rock Doctrine":Part one, the meaning of "Deep-Rock Doctrine". This part mainly introduces the origination and development of the "Deep-Rock Doctrine", the relationship of "Deep-Rock Doctrine" and "Piercing the Corporate Veil", and the jurisprudential analysis. "Deep-Rock Doctrine" is an instructive attempt by the court of chancery on the discharge of obligatory rights between controlling and subsidiary corporations, which bases on the conception of equity and justice. "Deep-Rock Doctrine" is a development of "Piercing the Corporate Veil". The difference between of them is on degree but not on style. It's also a breakthrough of equality between creditors' rights.Part two, the applicable objects of "Deep-Rock Doctrine". This part starts on defining the controlling company and the subsidiary. Then get a conclusion that all of the enterprises existing associated relationship are applicable objects of "Deep-Rock Doctrine".Part three, the applicable range of"Deep-Rock Doctrine". This part analyses different kinds of obligation relationship that can exist between oontrolling company and the subsidiary, then disoasses the tenable conditions and effective essentials of them. The various situations are analyzed by the method of classification, and the conclusions are: any kind of obligatory rights of the controlling company should in no case be prior to the other party's claim s or other subsidiary company's shareholders' rights.Part four, the realization of subordinate of controlling company's right It is affirmed that the controlling company's obligatory rights could only be subordinated equitably after examination instead of being subordinated without discrimination. Then the text put forward the tenable conditions of discharging subordinately of controlling company's obligatory rights.Part five, the legal effect of application of "Deep-Rock Doctrine". In case the controlling company' obligatory right is judged to apply "Deep-Rock Doctrine", it should be discharged subordinately. Moreover, the controlling company's these rights will be denied including the right to set off, the right to repossess and the fight to exemption. In addition, this part discusses the range of effectiveness of "Deep-Rock Doctrine".Part six, the consideration on legislation of "Deep-Rock Doctrine". Firstly, this part discusses the necessary to introduce "Deep-Rock Doctrine" into our country's legal system. Then this text tables a proposal for legislation, namely embed the basis of jurisprudence, substantial norm and procedural norm of "Deep-Rock Doctrine" into departments of law, so it can coordinate with the existing law system in China.