Research On The Application Of Equitable Subordination Principle In Bankruptcy Law

The principle of equitable subordination is also known as the "deep stone principle",which is mainly to regulate the illegal acts of the company and shareholders,and to compensate the creditors whose interests are damaged.In recent years,the issue of creditor's rights disputes in China has become more and more prominent,especially the treatment of the related issues of shareholder's creditor's rights,which has become a more serious problem in judicial practice.Today,with the rapid development of group companies,affiliated companies or shareholders are likely to use their own position in the company to replace their investment obligations by lending.The essence of this behavior is to transfer the investment risk to the company's creditors,which is unreasonable and has no basis in law.Although there are a series of related systems about creditor protection in our country's law,but the creditor's rights of bankrupt enterprises involve a wide range and are very complex.Although these systems can deal with the related problems of common creditor's rights,they are obviously unable to deal with the order of payment between shareholder's rights and common creditor's rights.For example,the U.S.equity court,through dealing with the"Shenshi case",finally incorporated the principle of equitable subordination into the written act of the U.S.bankruptcy law in 1979,initially stipulated the applicable conditions and scope of the principle.Since then,some civil law countries are deeply influenced by the common law system.They have studied and analyzed the principle,and gradually incorporated the principle into their respective legislative system.Due to the influence of various factors,the relevant legislation in mainland China does not distinguish between shareholders' claims and ordinary claims,and does not make clear the order of debt repayment.Therefore,in order to better deal with this kind of related creditor's rights,our country can consider introducing new foreign rules to solve the problem of shareholder's creditor's rights,in order to protect the legitimate interests of relevant personnel.This paper takes the principle of equitable subordination as the research object,adopts the methods of case analysis,comparative study and literature analysis,takes the characteristics and application fields of the principle as the clue,starts from the historical origin and legal basis of the principle,analyzes the typical cases and legislative status at home and abroad,and probes into the applicable elements of the principle,such as the subject,objective behavior and the burden of proof The legitimacy and feasibility of the principle into law.Finally,through typical cases,the paper analyzes the current series of problems in the distribution of bankruptcy claims in China,so as to demonstrate the legitimacy of the introduction of the principle into the bankruptcy law system in China,and finally discusses how to introduce the series of problems of the bankruptcy law system and the impact of the introduction of the principle in the bankruptcy law system.This paper is divided into five chapters:the first chapter introduces the basic concept and historical development process of the equitable subordination principle,and expounds the basic principles to be followed when the equitable subordination principle enters the law.In the second chapter,by analyzing the theoretical research results,legislative system and judicial practice of the principle of equitable subordination,the author summarizes the system framework and applicable conditions of the principle in foreign countries,which will be helpful for China.The third chapter analyzes the Shagang case in detail by summarizing the current legislation and theoretical basis of our country,which lays a practical foundation for the following demonstration of the feasibility of applying the principle of equitable subordination in judicial practice.In the fourth chapter,based on the above theory and the current legal framework of our country,the necessity and feasibility of introducing the principle of equitable subordination are demonstrated and analyzed.The fifth chapter takes the theoretical framework of equitable subordination principle into law as the core,and makes a systematic analysis of the substantive norms,procedural norms and the possible impact of the principle into law on the existing legal system,so as to provide useful suggestions for the improvement of the bankruptcy law system in China.