The Research On Substantive Consolidation Doctrine In American Bankruptcy Law

Affiliated enterprise is product of the pursuit of scale merit, which aims at adapting to the needs of market economy and social production. The economies of scale it brings has unparalleled advantages than what a single enterprise does. It greatly adapted to the practical needs of enterprise development. But affiliated enterprise's legitimacy is much less than its economic rationality. The influence it takes to the company's independent personality and the principle of independent trade increases running risk of the affiliated company, thus, threatening the interests of creditors of the subordinate company when the bankruptcy happens. Whereas, at present, China is still lack of the special legal system for supervising the bankruptcy of affiliated enterprise. If we simply apply the theory for the bankruptcy of single enterprise, creditors of the subordinate company will be treated unfairly.In America, substantive consolidation doctrine is an equitable property distribution relief system based on the balance right,which was created during the process of hearing enterprise bankruptcy cases by courts. In certain circumstances, it helps to break the legal independence representation of affiliated enterprise; form a new assets and liabilities union, and distribute assets to all the creditors proportionally. It is a useful way to resume the balance of twisted interest pattern in dealing with the case of affiliated enterprise in bankruptcy.This paper includes three parts:introduction, body and conclusion. The body is combined by the following 4 chapters:Chapter 1 provides some important cases to explain the theoretical origin of substantive consolidation doctrine in America.Chapter 2 analyzes substantive consolidation doctrine from the theoretical way. It analyzes its theoretical principle, value orientation and its relationship with other relevant principles, showing its unique system value. Chapter 3 describes the applicable object, principle, standard, burden of proof, legal consequences and other issues of substantive consolidation doctrine in American bankruptcy cases, in order to provide constructive suggestions for system construction for the following discussion.Chapter 4 discusses the adoption of this doctrine in China, including its necessity and feasibility, and the possibility of legislation from the legislative system, substantive requirements and procedural elements aspects.