Comparative Research On The Liquidation Of Shareholder’s Loan In Bankruptcy

Shareholder’s loan to the company is a way for corporate to finance, under normal circumstances shareholder’s right as a creditor should be same as other creditors. But due to the shareholder’s special status, there may be existing unfair situation. If let those shareholder’s loans to have the equal treatment with other claims in bankruptcy, other creditors’ rights will be diluted, and the fair goal of bankruptcy law will be violated. So it’s necessary to identify and distinguish shareholder’s loans, and make special regulation.America and Germany are the representative countries to make special regulations on shareholder’s loan. In those two countries, shareholder’s loan in bankruptcy will be subordinated in the distribution of bankruptcy estate. In America, there are two principles: equitable subordination and debt recharacterization. The former is for the improper shareholder’s loan, the latter is for shareholder’s loan which has a fuzzy form. In Germany, if shareholder loans to the company in the company’s crisis, this loan will be subordinated to pay off in bankruptcy. After law reform, all shareholders’ loans will be subordinated.In our country, there is no special regulation to shareholder’s loan, which caused many disputes in practice. So we should learn from other counties and make some adjustments to the bankruptcy law and other relevant laws.This paper is divided into five chapters. The first chapter makes the definition and classification of shareholder’s loans, and explores the value of the special treatment to shareholder’s loans. The second chapter makes a detailed analysis of the treatment of shareholder’s loans in America, introduce the principle of equitable subordination and debt recharacterization, also makes a difference between those two principles. The third chapter makes a detailed analysis of the treatment of shareholder’s loans in Germany——private capital substitution rule and the treatment to shareholder’s loans after the law reform. The fourth chapter makes a comparison of those principles in two countries. The fifth chapter analyzes the necessity and feasibility of introduction of special treatment to shareholder’s loans in bankruptcy, and put forward concrete measures to improve our law.