The Debt To Equity: China's Actual Use Of The Current Inquiry

June 1, 2009, General Motors, the largest U.S. industrial companies with the bondholders on the debt-equity program after several negotiations, final agreement, the local New York bankruptcy court to submit a formal application for bankruptcy protection, has entered bankruptcy protection. Since the 2007 economic crisis, in order to get out of debt crisis, settle down, have a number of world-renowned companies to draw up bankruptcy protection requirements, such as Lehman Brothers, Chrysler, U.S. Airways, Air Canada, Alitalia, Northwest Airlines, Forum newspaper Group, reader's Digest Co., Ltd. and other companies filed for bankruptcy protection, but most of them in the implementation of debt restructuring in the debt-equity program. Claims as a non-monetary assets, is the most common economic life of property rights. Debt to equity refers to the creditor to the debtor shall enjoy the legal claims against the debtor into investment and increase the registered capital of the debtor or creditor and the debtor of its new debt financing company, and made equity investment behavior, which includes claims eradication and equity relationships and the generation of two legal process. Claims in our country, "Company Law Amendment Bill," was listed as an investor in non-monetary assets, since although in the revised "Company Law" in the states, but the "Company Law" non-monetary property of the general style of presentation adopted "company Registration" requires SAIC jointly with relevant departments funded non-monetary property registration procedures and other provisions and other non-monetary claims in fact to set aside a larger property investment space. From the theoretical point of view, a considerable part of the claims can be assessed to meet the terms of transfer, has funded the legal basis. From a practical point of view, the policy of the early nineties for the debt financing debt accumulated a certain foundation. The enactment of legislation from the point of view, the United Kingdom "Company Law", U.S. "Model Company Law", the Macao Special Administrative Region "commercial" and other common law countries and regions, the law explicitly allows for debt financing, give us a good reference experience. Therefore, in recent years, investors have adopted a more academic credit for the positive attitude. At present, China is in the business development turnaround is crucial. Economic transformation and upgrading work is still the main theme of this year, many industries and enterprises are facing restructuring optimization. Claims as a new way of non-monetary contribution, to reduce investment costs and further expand investment and financing environment, improve the enterprise's balance sheet structure, making the creation of social wealth, the source of all full play, for this special period in the transformation and upgrading the company has an important significance.