The Research On Substantive Consolidation Doctrine

Driven by a market-oriented economy, China’s economic development in the past decades is unimaginable. In the context of rapid economic development, people will increasingly pursue interests, desiring to take advantage of resources. Commercial construction also has grown into overall development, thus forming the industrial chain integration business model. Under such a business development model., affiliated companies are perfect commercial organizations to use. At the same time affiliated companies relationship is used to damage the interests of creditors. Substantive consolidation doctrine is the rule to prevent creditors damages by collusion between affiliated companies. Since its establishment of Substantive consolidation doctrine, the applicable standard has been concerned about by the judges the most and they hope that they can sum up enough clues from practice, which can determined the applicable standards, however, the standards have not been determined as of todayIn facts, if you observe each bankruptcy case. it is not difficult to find that only creditors get damage. If you analyze bankruptcy from the creditors’ point of view, it seems that the debtors are provided with a legitimate method to damage claims of creditors, causing the debt uncollectible. If the damage is caused by a third person in the bankruptcy case, it looks like the third party’s infringement with creditor’s right. Through analysis, the acts prevented by substantive consolidation doctrine look very like the acts prevent by the third party tort.This paper tries to investigate the applicable standards of substantive consolidation doctrine based on the third party’s infringement with creditor’s right through three parts:In the first part, a brief account of substantive consolidation doctrine will be included. This part mainly introduces substantive consolidation doctrine and what is the purpose of this rule and influence in judicial practice. Through analyzing the background of judicial practice this part aims to know the purpose of the legislation.The second part, introduces the substantive consolidation doctrine and the third party’s infringement with creditor’s right. This part mainly introduces the third party’s infringement with creditor’s rights and make clear between the third party’s infringement with creditor’s right and ordinary torts, as well as, the various third party tort against state legislation and circumstances. And compare the prevented behavior of third party tort and the substance consolidation doctrine.Through constitutive requirements of the third party’s infringement with creditor’s right, the third part identify the applicable standard of substantive consolidation doctrine. In fact, the behavior of the third party’s infringement with creditor’s right contains the prevented behavior by substance consolidation doctrine. If the prevented behavior by substance consolidation doctrine meet the constitutive element of the third party’s infringement with creditor’s right. The constitutive element should be the applicable standard of substantive consolidation doctrine.