Thoughts On Reconstruction Of Restructuring Procedure's Special Threshold

Restructuring procedure was introduced by the current 2006 Enterprise Insolvency Law,which even set up the special threshold for the initiation of restructuring procedure,i.e.,restructuring procedure can be initiated by the enterprise when illiquidity is obviously likely to take place.Therefore,worldwidely speaking,the advancement of Enterprise Insolvency Law is easy to find in this perspective.Nevertheless,when it comes to explore the success,achievement,failure or defeat of Enterprise Insolvency Law during the past decade,surprisingly,there is rarely any development of special threshold upon its implementation.Specifically,since the introduction of the special threshold of restructuring procedure in2006,there is no more legislative updates,few judicial applications and scarce academic study.Up to date,the precise delineation of the expression that “the obvious likelihood of illiquidity” is still missing.Under the current Economic New Normal,supply side reform furtherly requires the restructuring procedure to play the unique role in rescue of financially distressed enterprise through its market-oriented and legal-based measures.With the existence of special threshold of restructuring procedure,a financially distressed enterprise is able to restructure its debts before the occurrence of insolvency,which can play a big difference in dealing with “Zombie Enterprise”,preventing overcapacity,achieving the goal of rescuing financially distressed enterprises.However,since there is no precise definition or elaboration of special threshold,the application of special threshold is deemed to be lacking transparency,predictability and objectivity,as a result of which,special threshold is rarely utilized in practice and the value of special threshold is therefore undermined.In such a context,this article establishing on the perspective of rescuing financially distressed enterprise,through anatomizing legislative provision,judicial case and theoretical study,is going to disclose the status quo of special threshold's application and analyze the corresponding drawbacks,based on which,by exploring the goals and principles of rescuing financially distressed enterprise,this article is going to reconstruct the special threshold so as to completely exert its value.The main body of this article is organized as the following: Chapter I is going to analyze the status quo of the development of special threshold macroscopically and parse its meaning microscopically by literally anatomizing the legislative expression of special threshold and the proposed analyzation by theoretical study and judicial practice,which can reveal the problems and drawbacks of the current special threshold.In doing so,the research question of this article therefore arises,i.e.,the necessity of reconstruct and how to construct special threshold of restructuring procedure.Chapter II is mainly going to analyze the problems and drawbacks revealed in Chapter I based on the effects and principles of reconstructing special threshold.From the effects of reconstructing special threshold,namely the effects of rescuing financially distressed enterprises,the value of special threshold's existence can be evidenced.From the principles of reconstructing special threshold,it is able to find that the key to perfect the current special threshold is to increase certainty.After that,this chapter will analyze issues that need to be prevented in order to restore certainty of special threshold.Chapter III explores the main elements and skeleton of ought-to-be special threshold.The reconstruction of special threshold firstly needs tomake clear of the ought-to-be looseness of the threshold and the orientation of the legislative value,which are the main elements to reconstruct special threshold.Secondly,special threshold's reconstruction also needs to solve semantic problem.That is to say,how to reasonably express the ought-tobe special threshold by legislation.Once the problem is solved,the foundation to perfect the current special threshold is able to be laid out.In accordance the status quo of current special threshold,Chapter IV firstly discusses how to perfect the initiation point of special threshold.Specifically,initiation point refers to initiation conditions and timing.Moreover,this chapter will explore the end point for the application of special threshold,i.e.,when and under what conditions special threshold is no longer available for financially distressed enterprises to utilize.By doing so,this article puts forward the legislative proposal for the purpose of reconstructing the special threshold.