The Game Analysis And Legal Regulation Of Commercial Debt-for Equity Swap

Why are there the conflict and cooperation of interest among the principals in Commercial debt-for equity swap? The main reason is benefit gambling.This paper is trying to analyze the strength,action preference,strategy choice,behavior pattern adjustment and the corresponding legal regulation of all the stakeholders in Commercial debt-for equity swap by Game Theory.This paper is composed of five parts,about 20,000 words in total.The main contents are as follows:The introduction: This paper briefly introduces the era background,significance,research status and research methods of this article.In the beginning of the essay,the writer presents the concept in order to define the scope of the contents in this article,and tells the differences among creditor’s rights investment,Political debt-for equity swap and Convertible bonds.In addition,the writer also gives the introduction about the meaning,elements,classification and premise of Game Theory.The writer also demonstrates the feasibility and availability of analyzing Commercial debt-for equity swap by Game Theory in this part.In the second paragraph,the essay discusses about Game Theory,The writer firstly figures out the main body of the game.The writer has also analyzed the characteristics and action preferences of the creditors,the debtor,government,company after swapping the debt to equity,large shareholders and minority ones.Then the writer also has analyzed the strategies,which analyze the specific behavior choice made by the game subject.First and foremost,the interest game between the creditor and debtor can transfer into information game.The transmission and identification of information have a significantly effect on strategies.In addition,the government plays “two typical roles”.It works well as public service agency for developing debt-for-equity;at the same time,the government might “practice jobbery” in processing debt-for-equity to get its work performance.Furthermore,this paper discusses about the game between the shareholders and company after transferring stock,in the side of reform and supervision to the business management.The reform led by the major transferring shareholders would face challenges and risks;on the other hand,it involves the problems about the supervision of business management,the transferring shareholders’ strategies choices have an inverse relationship with the supervisory cost,while they have a positive relationship with the expected loss,however,for the business management,its relationships with the supervisory cost or expected loss are totally different.Last but not least,the minor shareholders often become a free rider when supervising the business management.In the third paragraph,the writer aims to dig out the legal issues and risks in the game of debt-for-equity subjects.Such as there’s deficiency of legislation,no clear boundary between government and market,or whether the Commercial debt-for equity swap will repeat the history of Political debt-for-equity swap;information disclosure mechanism is imperfect,legal liability is not clear,the relief way of creditors’ right is limited;the right-defending sources of those free riding minor shareholders are also insufficient.The last part is about perfecting suggestion,for achieving the balance of interest between the principles in the game.Commercial debt-for equity swap is a systems engineering.This paper is mainly talking about how to reduce the town government intervention through the marketization of game mechanism,how to implement rules of governance through the legalization of game rules,how to make the information flow through bringing the game information into public.The writer also puts forward some ideas to achieve the balance of interest between the principles in the game,aiming at optimizing the corporate governance structure,developing the game well,processing capital market diversification,promoting the game results and so on.