The Deep-rock Doctrine In Our Bankruptcy Law

With the further deepening of economic integration, enterprises areincreasingly developing in depth, and the outcome which resulted by this is theemergency of the affiliated enterprise.The traditional rules of law are based onsingle enterprise, so these seem powerless when they deal with the complexissues resulted by the affiliated enterprise, this appears especially obvious whenthey face to the protection of the vulnerable groups especially the ordinarycreditors of subsidiary enterprise when affiliated enterprise go bankrupt.Deep-Rock Doctrine is the doctrine which is about whether the controllingenterprise can claim to its right as a creditor, and whether its right as a creditorshould be paid off after the ordinary creditors of subsidiary enterprise and othershareholders or not when the subsidiary go bankrupt. It originated from ajudgment of the United States, and it, the Denying Limited Liability System andthe Substantive Consolidation are used together,"to a certain sense, they are thedifferent weapons of the bankruptcy court.”In2005years, our country’s “Company Law”, which was amended, confirms the Denying Corporate Personality System, and although it notestablish the Deep-Rock Doctrine, there has been have positive attitude on theintroduction of the Deep-Rock Doctrine in judicature. Currently, the academiccircle’s discussion about the protection of vulnerable groups mainlyconcentrated in the Denying Corporate Personality System, and the Deep-RockDoctrine is ignored or is introduced briefly when discuss the Denying CorporatePersonality System,all of these indicate that the theoretical preparation forDeep-Rock Doctrine principle is not very adequate. Therefore,this article baseson the reality of our country, introduce, summary, analyze the Deep-RockDoctrine from the perspective of macro and micro, and elaborate the issuesrelated to our country introduce the doctrine.The structure of this article is divided into five parts, except introductionand conclusion:First chapter is about summary of the Deep-Rock Doctrine. This part willuse historical analysis and comparative analysis to generalize the Deep-RockDoctrine from a macro perspective. Deep-Rock Doctrine which originated from Taylor v. Standard Gas&Electric Co.(referred to as "Deep-Rock case") of theUnited States Supreme Court, in1939,is an instructive exploration of the UnitedStates Courts on the problems of debt repayment among the members ofaffiliated enterprise based on the concept of fairness and justice. The Deep-RockDoctrine, the Denying Corporate Personality System and the SubstantiveConsolidation are all the important parts of the system which provide protectionfor creditors in affiliated enterprise bankruptcy. There are Similarities anddifferences among them.Second chapter, applicable feasibility studies on the Deep-Rock Doctrine inour country. Firstly, this part will elaborate the reasons for why there is no theDeep-Rock Doctrine in our country, such as the focus of the Bankruptcy Law,imperfect provision, concerns the loss of state assets and so on. Then this partelaborate the necessity and possibility about introduction and application of theDeep-Rock Doctrine in our country, such as the rules can not deal with manyspecial problems which faced up to by affiliated enterprise, Justice has a positiveattitude and so on. Third chapter is about the value of origin and path selection about theapplication of the Deep-Rock Doctrine in our country. Firstly this part willelaborate the principle of justice, the principle of protection of vulnerable groups,the principle of good faith and the principle of rights shall not abuse. And then,because of the debate on automatic subordination and equitable subordinationand the debate on punitive theory and equitable theory, this part based on thereality of our country, as well as the value orientation of the Deep-RockDoctrine, proposes the introduction of equitable subordination and equitablesubordination.Fourth chapter is about the theoretical preparation for the Deep-RockDoctrine in our country. Based on the object of the Deep-Rock Doctrine, therange of controlling enterprise’s debt and the range of the Deep-Rock Doctrine’seffect, this part will elaborate the basic problems on affiliated enterprise and thescope of the controlling enterprise’s claims; clarify the boundaries of theproblems on time effect, geographical effect and human effect of the Deep-RockDoctrine. Fifth chapter is about the construction of the Deep-Rock Doctrine in ourcountry. Return to the microscopic system construction from macro perspectiveand micro perspective, this part will construct elements of the application of theDeep-Rock Doctrine in our country, clarify the order of the bankruptcy propertydistribution and analyze the particularity of the Deep-Rock Doctrine applied inaffiliated companies which contains company and limited partnership enterprise.