The Judicial Application Of The Principle Of "Equitable Subordination"

When the company enters the bankruptcy procedure and distributes the creditor's rights,the internal creditors may make use of the control over the company to infringe the interests of the external creditors by improper conduct due to the asymmetry of information.For this situation,full screen and consideration should be needed for the equitable distribution to bankrupt claims.Therefore,many scholars have proposed for the introduction of the "equitable subordination" principle in common law to Chinese legislation.However,after the revision of the new Company Law and under the background that our country's legislation has not established the principle of "equitable subordination",our judicial organizations has taken the lead in introducing the principle of"equitable subordination" into the judicial practice of individual cases.Therefore,studying the judicial application of the principle has the urgent and realistic significance at present.This dissertation mainly discusses the feasibility to introduce the principle of "equitable subordination" at the judicial level,as well as the introduction,applicable conditions and related systems of the introduction of the "equitable subordination" principle in China.On the basis of clarifying the principle of "equitable subordination" in the first part,this article discusses the application of the principle of "equitable subordination" in the second part through the comparative study of extraterritoriality.The aim of the first and second part is to provide theoretical support and reference for the next step to discuss the feasibility to introduce the principle of "equitable subordination" at the judicial level.In the third part of,the feasibility to introduce the principle of "equitable subordination" at the judicial practice will be discussed through the analysis of the existing relevant laws and theoretical basis,such as Company Law and Bankruptcy Law,and review on the implementation of the Distribution Bill(shagang vs kaitian 2013)pubicated by the Supreme Court of PRCHINA.The fourth part of this paper mainly discusses the application of the principle of"equitable subordination" in our judiciary and analyzes the relevant specific issues such as the legal citation,applicable conditions and the burden of proof based on the actual needs.