The Research On The Classification Of Small Claims In Reorganization

Basing on the legislative intent of protecting the small claims,Article 82 of the Bankruptcy Law of the People's Republic of China stipulates that when the court deems it is necessary,the small amount creditor group may be set up.However,it is more common to protect the small claims by treating them differently in common claims.Therefore,the purpose of this paper is to find out why the reorganization practice deviates from the legislative design.With the analysis of 63 public companies' reorganization plans from August 2007 to November 2016,the first chapter of this paper shows that it is extremely common to treat small claims in different ways in recent years.Specifically,over 70% of public companies provide higher repayment rates and/or shorter liquidation times for small claims by classifying small claims or giving different payment treatments in the common creditor group.Therefore,the preferential treatment of small claims calls for attention.Through the data analysis of 63 reorganization plans,many problems exist in the repayment to small claims: firstly,giving different treatments in the common creditor group is used more widely,three times as much as setting up the small amount creditor group is used;secondly,there is a big difference between the definitions of small amounts in both ways;thirdly,the settlement proportion of small claims is not uniform.In addition,in the case of classification of small claims,there are three different forms of settlement of the small amount creditors as compared with common creditors.In a word,the protection of small claims is chaotic in the current reorganization practice.Classification of small claims is seldom to be seen,and the payment arrangement of small amount creditors is inconsistent.It is great importance to make a concrete analysis.The second chapter tries to analyze the system and jurisprudence of the small amount creditors' voting separately from the common creditor's group.The first section analyzes the necessity of vote grouping.Through the comparison of extraterritorial legislation and the substantive conceptual analysis of the reorganization plan,if creditors with similar interests can focus on their own interests,it will help with the approval of reorganization plan and protect the interests of creditors at the same time.For this reason,the voting on the reorganization plan needs to be accorded with the "fair standard" and the "substantially equivalent".In order to discuss the rationality of the small amount creditors receiving preferential treatment,the second section focuses on the fairness and efficiency values of "substantially equivalent" and "fair standards".As small amount creditors are in a disadvantaged position in the common creditor group,the legislation can give some preferential treatment toward them,such as the liquidation ratio and the payment time.At the same time,it can also improve the efficiency of the reorganization plan.The third section further illustrates the rationality and necessity of making a difference between small claims and common claims.Also,in order to implement the "double standards" of voting rule,prevent conflicts among creditors,protect the industrial chain,simplify the reorganization process,control costs and other realistic factors,it is in great need for small amount creditors to be treated differently.The third chapter focuses on the analysis of the reason why small claims are hard to be classified in reorganization practice,in other words,why treating creditors in one group differently is adopted more widely than setting up the small amount creditor group.First of all,treating creditors in one group differently has its own institutional advantages.It satisfies the voting rules through obtaining consent of small amount creditors by giving them preferential treatment.At the same time,it can also avoid negotiation and even the second vote as a result of the failure of small amount creditor group's vote.However,treating creditors in one group differently violates the basic principle of "equal treatment in the same voting group." Secondly,due to the unclear definition of the amount of small claims,the misinterpretation of the principle of minimum acceptance and the possibility of violating the priority principle,small amount creditor group is facing its institutional dilemma.Thirdly,there are also practical problems in the restructuring of small amount creditor group.Although the court is in entitled to establish the small amount creditor group,the court may not have the possibility to do it because of the lack of substantive examination of the claims.Moreover,although the administrators are entitled to formulate the reorganization plan,they lack the motivation for setting up such a group because of the arduous task of stipulating reorganization plans and the lack of the setting right of the small amount creditor group.For creditors,it is difficult for them to judge whether their claims are small amounts because they cannot obtain disclosing information on the reorganization plan prior to the vote.There is less possibility for them to require administrators to do classification of small amount claims.Through the analysis of the jurisprudence of classification of small amount creditors and the reason why it is seldom seen in reorganization practice,the fourth chapter puts forward the institutional recommendations of classification of small claims.First of all,administrators shall be entitled to set up such a group,and the standards for the small amount should be clarified.At the same time,unify the payment of small amount creditor group and improve the negotiation status of administrators.Secondly,by referring to the extraterritorial pre-voting information disclosure rules,attempts are made to enable creditors,especially small amount creditors,to obtain reorganization information through a wider participation in the reorganization process,the perfection of the mechanism for disclosure of information before voting and the broadening of disclosure methods.Besides,small amount creditors shall be entitled to apply for setting up small amount creditor group,so as to realize the legislative intent of protecting the small amount claims.Thirdly,reform the examination form of the court,establish the substantive examination system before the vote,strengthen the substantive examination after the vote,and at the same time give the court some discretion in the compulsory approval to ensure the rationality of the classification and raise the possibility of approval of the reorganization plan.