The Analysis Of ST Listing Company’s Bankruptcy Reorganization Mode&Performance

Bankruptcy reorganization system is considered to be a major breakthrough of thenew bankruptcy law; and it is given high expectations from the first day it wasestablished. Bankruptcy reorganization is always followed by the words "rebirth" and"renaissance" to describe companies under financial distress and quantity financialdifficulties to revive through bankruptcy reorganization. However, every bankruptcyreorganization case caused quite a stir on the market, caused huge controversy ofdifferent parties especially the creditors and medium-sized and small shareholders, mostof the company quickly turnaround, reborn through bankruptcy reorganization, but thereare also many companies faced with continuing losses even reforming endlessly afterthey completed bankruptcy reorganization.In this paper, we use two listed companies in bankruptcy reorganization,*STHuagong and*ST Shengrun, as the research object, follow the norms case studymethod and the use of " analytic induction ", based on the literature review, through theextraction and analysis of key factors of the bankruptcy reorganization, from the processperspective, by investigating the complex process and influencing factors of valuecreation by bankruptcy restructuring, to reveal the process of value creation mechanismof bankruptcy reorganization. This paper first defined the accurate connotation ofbankruptcy reorganization, the bankruptcy reorganization is defined as the program orsystem that for those companies who are unable to repay debts or may not be able topay off debts of the enterprise, by interested party or parties’ application, applicantbankruptcy law relief measures to encourage enterprises to restore solvency, to maintainthe social interest and social stability. And then we introduced the bankruptcyreorganization procedure and main contents, through the discussion and literaturereview of former research about bankruptcy reorganization and bankruptcyreorganization system theory to establish the theoretical basis of this paper. Then, in thispaper, we scanned those listed companies that application bankruptcy reorganizationsystem since the new bankruptcy law was enacted in China’s stock market, and analysisthe overall situation and the characteristics of these companies, and the next, weanalyzed those companies from two aspects, both market performance and business performance, and get the conclusion: bankruptcy reorganization can bring reformingenterprise positive value effects, and its short-term efficiency is obvious, but thelong-term efficiency is not that significant. Next, take two listed companies,*STHuagong and*ST Shengrun, as our subject cases, to research and analysis of theirprocess of bankruptcy reorganization. The case study is mainly including two aspects;the first part is the introduction of the case company’s background and the performanceof their financial crisis. The second part is to compare the bankruptcy reorganizationpaths the two cases, to find commons and differences different types of bankruptcyreorganization.Through the analysis of the two cases’ market performance and financial performancebefore and after bankruptcy reorganization, we draw conclusions as follows: bankruptcyreorganization is able to bring positive value effects for reforming corporate, and itsshort-term efficiency is significant, while the long-term efficiency not that obvious, andit has no significant effect on the value of the whole society; in different modes ofbankruptcy reorganization,"business retention" mode is easier and earlier than"backdoor listing" mode in completing the reorganization of assets. The paper also givessuggestions for the problems we found during the process of bankruptcy reorganization,we hope to give advice to the large number of special treated listed companies out offinancial crisis and other non-listed companies.