Research On Validity Of "Valuation Adjustment Agreement" Between Investors And Target Companies

With the rapid economic development in our country and the booming private-equity fields,the "gambling agreement" has become a common adjustment means in the private equity field.The "gambling agreement" formerly known as"Valuation Adjustment Mechanism,VAM",because it conforms to the state culture and carries a gambling risk in practice,the name of "gambling agreement" has been used until now.The "gambling agreement" is most widely used in today's already very well-developed private equity market.It is a kind of contract arrangement generally adopted in private equity investment.It is an agreement on valuation adjustment signed with investors to obtain higher valuation.In short,the acquirer or investor invests in the enterprise,in order to promote cooperation in investment and financing,the initial valuation of the enterprise is not controversial,but through the investment and financing subsidiary agreement or special clause on the uncertainty of future business value agreement.If the agreed conditions arise,the financier may exercise a right to make up for the loss of underestimated corporate value in the earlier period.On the other hand,if the agreed terms do not arise,the investor may exercise a right to make up for the overvalued loss of the enterprise.Valuation Adjustment Mechanism are considered as a balancing act and compromise between mergers and acquisitions or investments in the pursuit of high valuations by financing companies and investors' recognition of higher valuations and lower investment risks.Valuation Adjustment Mechanism was introduced into China,because it is for the future development of enterprises and the uncertainty of the Valuation Adjustment Mechanism of the appointment of a number of issues have arisen,of which the most famous is the first case of the Valuation Adjustment Mechanism,"the HaiFu case" which exposes the potential illegality of direct betting by investorsand financiers in the Valuation Adjustment Mechanism and also exposes the possible violation of the principle of capital in cash.In addition,there are some problems listed in the article,such as the shareholders' contributions to the investment,the damage to the interests of the creditors and the interests of the minority shareholders,the design of the clause may involve some unfairness in the legal sense caused by the fixed income of the financing parties.This article focuses on the validity of the valuation adjustment agreement between the companies.Through the analysis of the principle of capital maintenance,the analysis of specific laws and the protection of creditors,this paper proves the validity of the valuation adjustment agreement among the companies.This article comprises five parts as follows:Chapter One mainly introduces the concept of valuation adjustment protocol and the status of valuation adjustment protocol.The concept part of valuation adjustment protocol also briefly reduces some typical cases,while in the status quo,it introduces the current valuation adjustment protocol in practice and theory The situation.Chapter Two mainly introduces and discusses the types of contracts that Valuation Adjustment Agreements most frequently discuss in domestic research and finally concludes that Valuation Adjustment Agreements should be considered as a general anonymous contract.Chapter Three mainly introduced the concept of capital maintenance principle and the re-recognition and development of the principle of capital maintenance in recent years.It also discussed the relationship between valuation adjustment protocol and capital maintenance principle,and concluded that the valuation adjustment agreement does not violate capital maintenance the connotation of the principle.Chapter Four mainly introduces the current academic and judicial practice of the effectiveness of valuation adjustment agreement denial of the terms involved.And discussed respectively the relationship between the valuation adjustment protocol and these clauses,and concluded that the valuation adjustment agreement does not violate the relevant clauses,and its validity is not necessarily linked with the relevant clauses.Chapter Five mainly introduces the relationship between the valuation adjustment protocol and the protection of creditors,briefly introduces the protection of creditors,and discusses the system of creditors' protection that should be perfected in the valuation adjustment agreement.The author studies the validity of the valuation adjustment agreement from the definition of the general anonymous contract,the main body,the meaning of that object are legal compliance,the content:not violate the relevant legal principles-the principle of capital maintenance,does not violate the mandatory law Provisions-the specific provisions of the company law,the protection of creditors,starting,and ultimately concluded that the valuation of the investment company and the target agreement between the adjustment agreement.