On The Principle Of Equitable Subordination In Bankruptcy Distribution

Under the reform of China's relaxation of registered capital control,company access in many industries has eliminated the requirement of statutory minimum capital.In addition,in conjunction with the provisions of the "Company Law of the People's Republic of China",shareholders are responsible for corporate debts to the extent of their actual capital contribution.The greater the risk you have to bear.In this context,special entities such as shareholders have lending to companies as one of the diversified forms of corporate financing.The allocation of such claims is not clear when the company goes bankrupt.In practice,the relationship between shareholders and other special entities and the company's creditor's rights and debts has shareholders transfer property from the company to itself,avoiding investment risks,resulting in the reduction of company assets,and ultimately the possibility of harming the interests of other creditors.In order to limit the misconduct of shareholders,under the access procedure of China's registered capital subscription system,ex post control is one of the means to pursue substantive fairness and protect weak creditors.However,as far as China's current bankruptcy system is concerned,there has not been a system that can properly balance substantive fairness and formal equity.The principle of equity in the United States has the role of controlling shareholder claims after the bankruptcy allocation process,which provides a new idea for the development of China's bankruptcy distribution system.This paper mainly studies the principle of introducing equity in bankruptcy distribution.The main attempt is to solve the following problems:Firstly,by analyzing the meaning and legal basis of the principle of equitable subordination,it is necessary to judge the necessity and feasibility of introducing the principle of equalization in China.Secondly,on the basis of introducing the principle of equitable equality,discuss its integration with the current legal system in China.Finally,it analyzes the applicable conditions after the introduction of the principle of equity in the bankruptcy distribution.This paper is divided into three parts to discuss the possibility and practicality of introducing the principle of equity in China in the process of bankruptcy distribution.The first part is the justification analysis of the principle of introducing equity in China's bankruptcy distribution.The principle of introducing equity in bankruptcy distribution refers to the advantage of creditors in the daily business process due to various unfair behaviors,resulting in the reduction of actual assets of enterprises.In the bankruptcy distribution stage,the bankrupt enterprise's creditor's rights and interests cannot be fully settled.In this case,the creditor's rights of the dominant position will be settled after being inferior in the bankruptcy distribution stage.Under the reform of China's protection of creditors and the registration of capital registration system,from the perspective of making up for the denial system of corporate personality,it is justifiable to introduce the principle of equity in bankruptcy distribution.The second part is the extraterritorial or regional legislation and evaluation of the principle of equity in bankruptcy distribution.By referring to the foreign and regional legislation,the author believes that the introduction of the principle of equity in the bankruptcy distribution can achieve the substantive justice of the law and the fairness of the case.The third part is the institutional construction of introducing the principle of equity in the bankruptcy distribution.The author believes that the introduction of the principle of equity in the bankruptcy distribution should be relatively expanded for the applicable subject,so this article will expand the subject from the controlling shareholder to the dominant position who can influence the company.Unfair behavior is still the main behavior that leads to the principle of equitable subordination,but the author believes that the debt financing behavior in the case of insufficient registered capital should also be included in the scope of application.In addition,this part designs the procedure for introducing the principle of equity in the bankruptcy distribution.The court of jurisdiction should be based on the court with ruling jurisdiction,and the initiator of the principle of equity in bankruptcy distribution is designed as the bankruptcy administrator and not.The settlement of creditor's rights reaches one-tenth of the creditors of all claims.This design helps relief and can also save judicial costs.