A Study On The Criteria Of The Court's Approval On The Reorganization Plan

The essence of the court's approval on the reorganization plan,is give legal effect to the common legal act of the interested parties by the court through exercising judicial power.Its starting point is to protect the public interests of the society,and its goal is to save enterprises from financial distress,in the premise of balancing interests among the interested parties.The approval rules with the approval criteria as its core part is not only the guidelines for the judge but also the boundary of preventing the abuse of judicial power.Classified according to legal proceedings of the court's approval on the reorganization plan,the Approval criteria includes Criteria for Normal approval and Criteria for Cram down.Since the implementation of the Bankruptcy Law of the People's Republic of China(hereinafter referred to as the Bankruptcy Law),there are so much outstanding issues in the reorganization plans of listed companies,such as lack of risk compensation to the creditors,adjusting some rights of the investors unfairly and unjustly,demonstrating roughly the viability of the business plan.However,China's court in the review of the reorganization plan of the listed companies,to cooperate with these companies to protect the identity of the listing Corporation,have a tendency to seek fast and make all plans approved,which ignored the reasonable demands of interested parties opposed to the reorganization plans and the reorganization plan feasibility,resulting in a number of reorganization plans with defects approved.These practice problems in court approving the reorganization plans,is partly due to improper intervention from local government and the quality of the judicial personnel,another more important reason is the imperfection of approval criteria.Therefore,it is necessary to review and reconstruct the Approval criteria of the reorganization plan.From the reality to the ideal,then return to the reality,this paper to these practice problems try to exploring the ideal connotation of criteria for normal approval and criteria for cram down,comparing with existing defects of China's Approval criteria,providing recommendations for the reconstruction of China's Approval criteria.In addition to the introduction and conclusion,this paper is Consisted of five chapters:The first chapter analyzes some practice problems in China's court approving the reorganization plans,and illustrates the important significance of review and reconstruction of China's Approval criteria with these problems.This chapter begins with an analysis of the listed companies reorganization plans as well as the main content and the prominent problems,then analyses the practice problems in China's court approving the reorganization plans and their consequences,finally illustrates the contact between these problems above and the existing defects of China's Approval criteria.The second chapter gives an overview the basic theory of Approval criteria,laying a theoretical foundation for demonstrating specific Approval criteria.This chapter discusses the essence of the court's approval on the reorganization plan,the content and the related concepts,legal basis,functions and making principles,classification of Approval criteria.In particular,this chapter demonstrates that there is General and special,indispensable relationship between Criteria for Normal approval and Criteria for Cram down.The third chapter demonstrates the specific Criteria for Normal approval.This chapter discusses the criteria for the legitimacy of the voting procedure of the reorganization plan in terms of protecting the interested parties' autonomy of meaning,the criteria for the reorganization plan feasibility in terms of safeguarding the interests of the interested parties' community,the criteria for the maximum benefit of interested party in terms of protecting fundamental rights and interests of interested individual opposed to the reorganization plan.The fourth chapter focus on the specific Criteria for Cram down.This chapter discusses the criteria for the minimum number of groups greed in terms of maintaining the legitimacy foundation of court's approval power,the criteria for prohibition against discrimination of the reorganization plan in terms of treating the same type of interested parties' group fairly,the criteria for fairness and justice of the reorganization plan in terms of treating the different types of interested parties' group fairly and justly.The fifth chapter backs to the reality of China's Approval criteria,summarizes its existing defects with those discussion above,and then provides some reconstruction suggestions.It is necessary to take reconstructive measures in pertinency,for there is lack of Criteria for Normal approval and obscure,incomplete,poorly operable Criteria for Cram down.