The Processing Rules Of Financial Leasing Contract In The Bankruptcy Liquidation

In recent years,China's financial leasing business has developed rapidly.The lessor and lessee enterprises as the principal trading party are facing a lot of competition and business risk due to the fierce competition in the industry and its capital-intensive feature.Once one trading party goes bankrupt,the processing of financial leasing contracts will directly affect interests of both parties to the contract and the bankrupt debtor's creditors.Therefore,establishing reasonable processing rules in bankruptcy has important significance.However,China's current bankruptcy law has no direct special provisions about how to deal with the unexpired financial leasing contract.Generally,bankruptcy trustee will decide to dissolve or continually fulfill the contract like other executory contract.There is also no clear legislative and judicial principles and standards about how to exercise the right to choose,and no necessary consideration on the complicate characteristics of financial leasing contract and the balancing of interest in bankruptcy,which contribute to many problems in the specific process.This article intends to analyze the rules dealing with unexpired financial leasing contract in bankruptcy law and its application problems on the basis of clarifying the features and legal nature of financial leasing contracts.Then the writer will discuss the solutions with practical problems in two cases of both lessor and lessee,combining with the foreign legislation and practical experiences,in order to improve the processing rules on financial leasing contract in bankruptcy liquidation.The first chapter is to identify the rules which the unexpired financial leasing contract in liquidation will apply to and reveal the problems of rules applied.Firstly,summarize the features in form and essential of financial leasing contract combining with the foreign legislation on financial leasing contracts,and then discuss the different theories about the legal nature of the financial leasing contract,and evaluate the independent contract held by our legislation.Secondly,discuss the nature of financial leasing contract in bankruptcy proceedings based on the comparative analysis of processing rules under the standard of two kinds in form and essential,and then analyze the problems producing from where the trustee dealing with financial leasing contract.The second chapter will discuss the basic theories of the trustee's right to choose for contracts' performance which include the legal status,the principles and the restrictions,in order to make up the laciness of general rules.Firstly,analyze the values and trustee's legal status which let the trustee intervene the performance of the contracts,and thus emphasize the principles of bankrupt's estate's maximization and balancing when the trustee exercise its right.Secondly,analyze the courts' review on trustee's decision and the protecting rules for the other party of the contract which limit the trustee's right from the outside.In the third and fourth chapters,the writer will specifically discuss the processing rules of the trustee dealing with the financial leasing contract,combining with the special features of financial leasing contract.When the lessor goes bankrupt,the treating for leased property the trustee resorts is the key of the problem.The writer hold that the law should protect the lessor's ownership and also limit its right of rescission and cannot recall leased property at will,through the analysis of the lessee's special interests on leased property and the contract's special features,such as its irrevocable feature.If the trustee decide to fulfill the contract,whether the other party should pay the rent in advance or the trustee may assign the contract,which could help resolve the difficulties in contract's performance.In the case of bankruptcy of the lessee,the first problem to be solved is whether the lessor could exercise its recall right.The writer will firstly analyze the basis and conditions for exercise of the recall right,and then explain the restriction on the lessor's rights of rescission and recall.Secondly,analyze the trustee's exercise of option and its legal consequences.If the trustee decided to fulfill the contract,the law should clarity the conditions for the decision and give priority protection to the lessor.While if the trustee decided to dissolve the contract,the lessor could recall its leased property and also has the right to claim damages which could involve in the bankruptcy distribution as general creditor,but the trustee also could claim the lessor return the unjust benefit when the lessee has already paid most of the rent.