The Study On Legal Issues Of Corporation Bankruptcy Reorganization Financing

Bankruptcy reorganization financing is crucial for corporation entering the reorganization process.Corporations filed for bankruptcy reorganization are mostly insolvent and capital-chain rupturing.Therefore,it is impossible to return to normal operation relying on its own funds for corporation in the process of reorganization.which determines the necessity of financing.But at the same time,the credit base of the reorganized corporation is destructed frequently,so it is hard to finance relying on its own credit,which determines the difficulty of financing.This study takes bankruptcy reorganization financing as the research object and takes the methods to solving the financing legal issues an the research purposes.Besides,this study uses the empirical analysis,comparative analysis,game analysis and other analysis methods together,to analyse and demonstrate the legal issues of corporation bankruptcy reorganization financing and corresponding solutions.This paper adopts the structure of “Total and Points”.The first part gives a general overview on the financing of corporation bankruptcy reorganization and the rest of four parts illustrate the legal issues of four patterns of corporation bankruptcy reorganization and the corresponding solutions.The first part is an overview of the corporation bankruptcy reorganization financing,respectively explaining the concept,characteristics and common patterns of the corporation bankruptcy reorganization financing.Corporation bankruptcy reorganization finance refers to the activities that the bankruptcy reorganization corporation raises fund from the external directly to keep operating in the period of bankruptcy reorganization.Corporation bankruptcy reorganization financing characterizes with the specificity of the condition for the financing,the necessity of the financing behavior and the complexity of the interest relations.There are patterns of loan financing,asset sale financing,equity transfer financing and non-public offering financing in financing patterns.The second part discusses the loan financing.Loan financing is one of the important means of corporation financing also can optimize the capital structure of corporation.However,dueto the lack of detailed institutional arrangements for the debtor's loan financing during the reorganization period,the loan financing method is seriously missing.By the game analysis of the subjects in loan financing,what can be found is that the debtor,the old creditor and the new creditor can maximize the interests of all parties only by cooperating.So the debt steming from the loan financing in the period of reorganization should be prescribed as the common benefits debt and loan financing way of guarantee should be refined,so as to build a set of creditor's rights financing system which can stimulate subjects to cooperate.The third part discusses the asset sale financing.The asset sale financing can not only help the debtor to achieve the goal of financing,but also deal with the backward,inefficient and useless assets of the debtor.However,the asset sale financing has the issue of lack of procedural constraints and is prone to be alienated as the method of the hyping "shell resources".In that ground,the asset sale financing should be prescribed as the contents of the reorganization plan draft and the standards about recovering list should be enhanced,so as to the asset sale financing under the procedural constrains and the phenomenon of “backdoor listings”be restricted effectively.The fourth part expounds the equity transfer financing.Equity transfer financing is usually one of the financing measures used by the reorganized corporation.However,the equity transfer tends to conflict with the equity burden such as equity pledge and equity preservation,which hinders the smooth transfer of equity.Therefore,the reorganized procedure prior to execution procedure should be the basic principle to coordinate the conflict between equity transfer and equity burden.The fifth part illustrates the non-public offering financing.The non-public offering financing has the advantages of low cost and easy operation.But issues such as offering out of court supervision,offering objects lack of qualification standards and offering condition lack of immunity regulation hinders the debtor's non-public offering and is not conducive to protect the interests of investors and standardize the non-public offering.Therefore,the standard of the reorganization plan be completed and offering objects' qualification should be prescribed clearly.Besides,the offering condition should be exempted,so as to break thebarriers of debtor's non-public offering financing.