A Study Of The Restructuring Of The Debtor's Own Management

Enterprise Bankruptcy Law of P.R.C (" the Law") has been enacted in 2007 in which the reorganization system was confirmed. During reorganization proceed, reorganization institution is in charge of management of debtor's assets, daily business and reorganization affairs. According to the Law, debtor itself has the right to possess the mentioned business and act as the reorganization institution. Due to the high efficiency, strong expertise and non-interruption into business, Debtor in Possession ("DIP") has attracted many companies and courts attention. However, allowing the debtor itself to manage the reorganization affairs is an exception of dominating an administrator. The regulations regarding DIP are not detailed and this leads to difficulty in practice when debtors apply DIP system.This dissertation aims to analysis DIP system. DIP has advantages in motivating debtors'willing to file for reorganization, ensuring the professional of the DIP team, and enhancing the efficiency of reorganization. These advantages help debtors achieve the goal of reorganization to maximum the value of assets and to rehabilitate. DIP consists of internal employees, and this feature raises public's doubts about whether debtor can deal with reorganization affairs fairly among several parties. This dissertation intends to perfect the current regulations of DIP system by introducing and referencing other bankruptcy laws of different jurisdictions.The main text of this paper is divided into four chapters.Chapter One:Value and advantages of DIP. It discusses the value of reorganization and the consistency of DIP with reorganization. Then it demonstrates the advantages in motivation, efficiency, low cost and professional of DIP, which explain the meaning of doing this analysis.Chapter Two:DIP's disadvantages and its influence on corporate governance. It analysis the disadvantages of DIP both theoretically and practically. Then it clarifies the change of corporate governance structure during DIP and expounds the rearrangement of reorganized company's controlling power.Chapter Three:Comparison of DIP in different jurisdictions. It introduces various countries and regions'legislation regarding DIP including United States, Germany, Japan, France, Australia, Korea and Taiwan. Then it presents the detailed regulations of DIP by comparing bankruptcy laws of United States and Germany. Chapter Four:Suggestions to improve DIP system in Enterprise Bankruptcy Law of China. This chapter analysis the rights, limits and obligations of DIP and how can a debtor participate in the reorganization proceeds, like the application, approval and termination system of debtor.