Exercise Of Creditor's Cancellation Right In Equity Transfer

Nowadays,with the rising development of market economy,the methods that debtors applied to evade debts and injure the lawful interests of creditors is becoming increasingly complicated.Normally,the debtor evade the responsibility of refund by transferring finance to the off-shore,but in latest judicial practice of China,it is not rare for the debtor to damage the creditor's lawful interests by transferring their equity to proxy so as to indirectly control the equity to avoid the refunding.Such behavior seriously infringes the interests and rights of creditors.Although the article 74 of Chinses Contract Law has introduced related regulations,namely,the right of revocation,to protect the creditor,the most propriate and practical means to exercise right of revocation to protect the lawful interests of all parties in litigation is still in exploration.This dissertation starts with the case of Li Mou Guo's lawsuit against Chen Mou and Yang Mou Yu's creditor's right to revoke.Firstly,based on the concept and nature of the right of revocation,by comprehensively studying the academic research on this topic to construct the fundamental elements of Right of revocation.Secondly,according to the court decision of this case,the stock holding agreement is focused and discussed.In this case,the stock holding agreement shall be recognized as lawful and effective.In addition,due to the characteristic of relativity arising from this agreement,it only exerts influence on the debtor Chen and the assignee Yang,rather than on any third party.Therefore,the creditor has no right to revoke the consummated transaction between the representative and the third party.Thirdly,the estimate of the value of equity is an important condition precedent that affects the target transaction.The writer,through the comparison of Income Method and Cost Method,concludes that,in this case,the assessment of the value of stocks in the company shall apply Income Method,and the consideration of this equity transaction is reasonable under these circumstances.Fourthly,the manner of creditor to exercise the right of revocation is generally hard to distinguish.This dissertation discusses the standard of proof about the subjective manner of exercising the right.In this case,only the unilateral statement from the debtor who admitted his malicious intention is far from proving the “fact” that the transferee knew about it and the transferee's goodwill.In the end,the writer puts forward suggestions on the protection of the third party's rights and interests,the creditor's right of revocation,and the situation that application of the creditor's right of revocation is combined with the validity of contract,pursuing to make effective contribution to establish a healthy and comprehensive development of this system.