Reorganization Of Responsibilities And Rights Of The Guarantor

Bankruptcy Reorganization plays an important role increasingly in the modern life. Compare to the bankruptcy liquidation, Bankruptcy Reorganization protect the social public intrerests, which is going to be much more protected against bankrupt. The process of bankruptcy reorganization involves the multi-stakeholder relationship, bankruptcy reorganization should arrange the each interest body in reason and balancing them. Therefore, Bankruptcy Reorganization expresses its obvious double objective, not only pursuing the success of Bankruptcy Reorganization, but also being coordinated with the related interests of all the parties. The thesis focus on the responsibilities and rights of the guarantor in Bankruptcy Reorganization. The responsibilities and rights of guarantor based on the guarantor’s legal status in the legal relation. In the legal relationship of guarantee, the guarantors’ legal status determine their responsibilities and rights, The debtor can not or does not carry out debt obligations when he or she falls due, the guarantor should take place of debtor to clear off debts for obligee, and at the same time, he or she would enjoy the right of recourse and subrogation. The joint liability guarantor who should assure guaranty duty according to that the obligee choose the guarantor to assure guaranty when he or she in debt due and the guarantee period has not expired, and he or she would enjoy the right of recourse for debtor and the right of subrogation for obligee after the guaranty assured. However, the common guarantor enjoy the right of contradicting first, when the the guarantee period has not expired and in debt due, what’s more, the debtor does not assert clear off the debts but claim the guarantor to assure guaranty directly, in this way, the common guarantor can exercise the right of contrsdicting first and can refuse to assure the guaranty. The common guarantor also enjoy the right of recourse for debtor and the right of subrogation for obligee after the guaranty assured. These are mainly formulated in the Guarantee Law. The parties of legal relationship of Bankruptcy Reorganization are mostly creditors of bankruptcy and debtors of bankruptcy, even probably also the stockholder, executives, and the new strategic investor when involved in Bankruptcy Reorganization, however, these participants either depend on the creditors of bankruptcy or debtors of bankruptcy for that the Bankruptcy Reorganization settle the creditor and debtor disputes through the reorganization. Strictly speaking, there is no guarantor’s seat in Bankruptcy Reorganization, the guarantor can enter into the Bankruptcy Reorganization which is not based on the status of being the guarantor, but rely on the role of creditor or debtor they transform into. In the process of Bankruptcy Reorganization, the guarantor always being transformed or overlapped in the subject identity. When the debtor is in bankruptcy and reorganization, the guarantor who hasn’t become creditor of bankruptcy through legal procedure of reporting claims is still common guarantor, confirmed by the court the guarantor who assume guarantee responsibilities and use its right of recovery to declare his claims can be reduced to bankruptcy debtor, or confirmed by the court the guarantor who hasn’t assumed guarantee responsibilities, but use its right of recovery of the future to declare his claims can be reduced to bankruptcy debtor. When the debtor is in bankruptcy and reorganization, the guarantor is still a guarantor before he reports claims and confirms the credit of bankrupt by the court, after that he turns to be a creditor in a bankrupt estate. When the guarantor is in bankruptcy and reorganization, his status of the guarantor doesn’t change because of the bankruptcy,he is still the guarantor of the original creditor-debtor relationship. At the same time, the guarantor is in bankruptcy and reorganization, the guarantor itself is a matter-of-course insolvent debtor. These have a significant impact on the responsibilities and rights of the guarantor. When the debtor is in bankruptcy and reorganization, the obstacle of the debtor’s debt service exists as a matter of fact, the right of plea for preference claims of the general guarantor is restricted, that is when the debtor is in bankruptcy and reorganization, the creditor claims the guarantor to assume guarantee responsibilities, the guarantor can not denied responsibility through the right of plea for preference claims. The guarantor should assume liability and use his right of recovery to reporting claims in time when the creditor doesn’t report it. If the creditor has reported claims already, the guarantor can become the creditor of bankruptcy reorganization through exercise the subrogated right. Insolvency reorganization means the debtor can’t pay the obligation for individual creditor or provide assurance for the unsecured creditor, the claim of responsibility immunity of the guarantor is restricted and traceback to a year before the bankruptcy was accepted. When the guarantor is in bankruptcy and reorganization, the guarantee liability of the guarantor is not relieved due to bankruptcy, the guarantor should continue to bear the guaranty liability. The debt which is bring by the guarantor’s undertaking to ensure that the responsibility should be included in the bankruptcy debt and processing in accordance with the bankruptcy reorganization process. The bankruptcy of the guarantor doesn’t mean that the debtor will not pay off the debt or couldn’t pay off the debt, generally the guarantors’ first rights of the present defense should not be limited. It should be reconsidered and treated properly the relationship between this and the principle of non-exemption from liability. In my opinion, the guarantor should break this principle and guarantee the beneficium ordinis of the general guarantor during the bankruptcy reorganization. There are three reasons for this. Firstly, it will benefit the reorganization and save the enterprise. Secondly, the guarantee liability is of dependency. Finally, it will avoid snow plus frost so as to balance the interest and maintain the justice. When the guarantor is in bankruptcy and reorganization, the debtors are free from the bankruptcy of restructuring procedure of regulation, the guarantor’s responsibility of the claim should not be limited, too. If the guarantor undertake the liability, The issuer shall exercise his right of recourse in accordance with law and shall not give up. When the debtor and the guarantor are both in bankruptcy restructuring, the debtor is in truth existed the obstacles of repayment ability, except for the status, the first right of the guarantor to present defense is supposed to be restricted, if the creditor waives the property security, the surety shall be relieved of his suretyship liability to the extent of the creditor’s waiver, but the amount of compensation shall be taken into consideration of the dependency, the guarantor should undertake the liability for the part of the debtor’s bankruptcy restructuring of the creditors which is not compensated. During the bankruptcy reorganization of the guarantor, if the creditor has been paid off by the guarantor in advance, the paid-off part should be drawn and saved. After the creditor confirms the paid-off part from the debtor, the paid-off amount from the guarantor, the surplus amount should be returned to the guarantor and be reincluded in the bankruptcy reorganization, which presents the dependency of the guarantee liability, so as to guarantee the interest of other creditors. Because the debtors are both bankrupted, the rights of the guarantor’s responsibility of the claim are also limited. When the debtor and guarantor are both in bankruptcy and reorganization, if the creditors and the debtors are not for filing claims, the issuer shall be in his right of recourse against the debtor or any right to future claims and shall not give up. If the creditor has claimed to the debtor, after the guarantor bearing the responsibility, they should take the place of the bankruptors to take part in the bankrupty restructuring and shall not give up. Bankruptcy reorganization as a new system in the law of our country, some new ideas and some concept of the legal system are bound to have some conflict, when dealing with the assurance of the right of credit, our bankruptcy law, security law and related civil law on bankruptcy restructuring of the rights and responsibility should be improved. Especially in the aspect of the protection of guarantor’s rights, there is even legal blank. The author thinks that, in order to realize the right channels, the surety shall be perfect in the bankruptcy of the reforming legal regulation; In dealing with the guarantors’ liabilities and rights, they should enjoy the bankruptcy of the distinction between the reforming and the guarantor bankruptcy restructuring; they should also pay attention to the cohesion and integrity between law and the system, avoid legal provisions contradictions and appear blank.