Research On The Process Of Parent Company’s Debt After Subsidiary’s Bankruptcy

Because the parent company can control and dominant the subsidiary, parentcompany’s debt and ordinary debt are unequal. This inequality require laws to bedifferential treatment to them. Only in this way can be more reasonably reflect the fairnessand justice of the law. In the bankruptcy of the subsidiary, this inequality lead to morevulnerable to damage the interests of ordinary creditors. But, according to the "CompanyLaw"、the "Bankruptcy Law" and other relevant provisions, the using of existing rules ofbankruptcy invalid behavior and bankruptcy behavior which can be revoked only can solvethe illegal debt problems in parent company debt, existing laws and regulations did notadequately take into account the legitimate but unfair debt of the parent company. So, weshould learn from the successful experience of other countries, we can introduct theEquitable Subordination to particularly regulate legitimate but unfair debt of the parentcompany, to make the legitimate but unfair parent company creditors repayed after otherordinary creditors and non-voting preference shareholders. Only with the scientificclassification of the parent company debt, by analyzing specific issues, we can formulatedifferent treatment of different categories of parent company debt, and build a completeand reasonable parent company claims handling mechanism. At the same time, we canbetter safeguard the legitimate interests of the ordinary creditors of the bankruptcysubsidiary, and achieve really fair in the bankruptcy process.The thesis consists of introduction, text and conclusion. The text includes three partsin total.The first part mainly introduce the basic theory of the parent company debt. Throughanalyzing the concept of parent company’s debt, establishing elements and the effectiveelements of the parent company’s debt, we can propose the parent company’s claims withparticularity, and the parent company’s claims should be of special regulation. At the sametime, according to legal and legitimate standards, the parent company’s debt can be classified, then can lay the foundation for the classification regulation.The second part studies how to handle the parent company’s debt after the bankruptcyof our subsidiaries. Through analyzing the Company Law、 the Bankruptcy Laws andother laws and regulations, put forward the shortcoming of the parent company of claimsprocessing after bankruptcy of the subsidiary in China.The third part focuses on the reconstruction of the parent company claims handlingmechanism after the bankruptcy of our subsidiaries. Through perfecting our currentbankruptcy system, bankruptcy revocation system and other relevant laws and regulations,and introducing the Equitable Subordination, we can settle the problems of the parentsubsidiary bankruptcy debt. The illegal parent company bankruptcy claims can beregulated by the bankruptcy invalid system and bankruptcy avoidance system in theBankruptcy Laws; The improper but legal bankruptcy claims can be regulated by theEquitable Subordination learned from American Law; the proper parent companybankruptcy claims can be regarded as an ordinary creditor in bankruptcy settled.