Discussion On The Revocation Of Preferential Transfer In China

The concept of " the debtor’s property " was known by the law of the People’sRepublic of China on enterprise bankruptcy law in2006,which means that bankruptcylegislation has been changed greatly. Bankruptcy revocation right, as one of importantlink system, has a great significance to maintain or increase the debtor’s property. And,the application of bankruptcy revocation right is also the important thing inbankruptcy proceedings which contains different interests and rights conflicts. Thenew company law makes company set up more simple, but also makes the risk ofbusiness increased."Bankruptcy for the debtor is not a threat, but a kind oftemptation". Shareholders have limited liability within the scope of investment, whichmakes the shareholders are in a kind of indifference for the debtor’s property, evenmay reduce enterprise property of the debtor. However, once the company intobankruptcy proceedings, the debtor property, as a scarce resource, will drew thedebtor and creditors compete for. At this point, the debtor, liking a drowning man,will transfer property in order to escape debts before accepting the bankruptcy cases.In the time competition, only a part of creditors were repaid from the debtor, othercreditors had no choice but to use a variety of unfair means for liquidation. The abovebehaviors destroyed the fair of bankruptcy law and caused chaos in the economicorder.The bankruptcy revocation right is established by The enterprise bankruptcy law,which is a key system of bankruptcy law principle to protect fairness. In the aspectsof protecting the principle of good faith and ensuring the bankruptcy law legislationaim to correct the behaviors of debtor, the right has an irreplaceable important role inthe bankruptcy law. It’s not hard to find that the bankruptcy revocation right is notaim at increasing the bankruptcy property, but also protecting the interests of thecreditors’ collective equal payments. However, bankruptcy revocation right is like adouble-edged sword, especially for the revocation of preferential transfer is an ethicaldilemma. Compared with the gratis behavior of transfer the property, preferentialtransfer is not to be blamed originally, repayment of debts behavior is abide by the principle of good faith for a specific embodiment of the creditor. But, when in thespecial conditions of bankruptcy proceedings, the preferential transfer is a kind ofunfair behavior. Since the behaviour making the creditors in the same position ofdebts have no fair pay.The cancellation of behaviors on the parties, of course, will inevitably affect thetransaction security and stability, so if we emphasis on the debtors in the set to cancelpower too much while ignoring the interests of other subject’s legitimate interests,also may lead to chaos in the market economic order. From the idea of legislation, thebankruptcy revocation right is designed to prevent the debtor to repay parties inadvance, which will destroy the liquidation sequence. Repaying individually cannotbe withdrawn by ruling execution, but the individual payment have the risk ofcancellation in the critical period. This is unfair. So we should be make the article32clearly,only in this can we protect the interests of bona fide creditors.To this end, the author attempts to the enterprise the third paragraph and thefourth paragraph of article31and article32of bankruptcy law, and draw lessons fromoutside the regulation of system of bankruptcy law about revocation of preferentialtransfer, make a detailed analysis in order to discovering the reasonability, clarify thesignificance of it. And then make the bankruptcy law be better to implement thelegislative purpose, which is "enterprise bankruptcy process specification, debts canbe clear fair, the legitimate rights and interests of creditors and debtors are protected,and at the same time maintaining the socialist market economy".