Enterprise Bankruptcy Reorganization System Comparative Study Of China And The United States

Reorganization is the direction and essence of modern bankruptcy law. Unlike other bankruptcy regime, the aim of reorganization is to protect on-going value of company, reduce negative effect brought by liquidation, waste of resource and unemployment, and provide a path for company revitalization. Reorganization has been established by Chapter8of Bankruptcy Law of P.R.C. in June1,2007. The model of reorganization law is Chapter11of Bankruptcy Reform Act of USA. The litigation of reorganization in China is learned from America.The first Chapter explained the history of reorganization, its meaning in this article and its value. Reorganization was born in economic crisis. It is a way to solve economic and social problems. Its most distinguished character different from other bankruptcy regime is to save the company.The second Chapter reviewed history of reorganization in America and China. In America, it is born from equity receivership. In1938, it was wrote in federal statutes in "Chandler Act". The reorganization regime we now see is established in Bankruptcy Reform Act of1978. In the beginning, there is only rectification and reconciliation in China. The reorganization regime was established by Bankruptcy Law of PRC,2007.The third Chapter compared starting system of reorganization in both countries. Both countries set a wild range of applicable objects. As to reason for application, America set no requirement for voluntary reorganization. The statute in China is yet to be clarify by courts. As to applicants, the range set by our law is wilder than America.The forth Chapter compared controlling agent and bankruptcy preservation of two countries. As to controlling agent, America applies DIP model while China chooses to give the power to trustee. But our regime gives government a chance to interfere into company reorganization. As to bankruptcy preservation, China’s regulation is to simple to apply in practice.The fifth Chapter compares reorganization plan in two countries. Both countries give the right to put forward a reorganization plan to controlling agent. Compared to China, America also gives the right to other entities, which is more practical to protect right of different parties. As to how the plan enter into force, there is no minimum standard in China, which is more flexible.The conclusion part summarized the shortage of China’s reorganization regime and gave suggestions based on that.