Study On The Legal Attributes And Effects Of "De Jure Investment And De Factor Loan"

As an innovative financing guarantee means,“de jure investment and de factor loan” integrates the dual properties of equity investment and creditor's rights.Even though the supervision department has continually prohibited “de jure investment and de factor loan” financing mode out of the needs of regulating financial market,it is still a financing mode which has been widely applied in business transaction.In judicial practice,because of the ambiguous property of “de jure investment and de factor loan”,there exist numerous disputes over fact finding and law application among all market subjects,supervision departments and judiciary departments.According to the practical significance of “de jure investment and de factor loan”,the paper will clarify the structural features,legal force and properties of “de jure investment and de factor loan”,study current judicial practice and start from the perspective of theory and practice to conclude the applicable criteria of “de jure investment and de factor loan” affirmation.The paper falls into four parts as follows.The part of Introduction mainly illustrates the background and research significance of “de jure investment and de factor loan”.Chapter One introduces the concept and transaction mode of “de jure investment and de factor loan”,and explains the judicial adjudication and supervision logic of“de jure investment and de factor loan”.As a general rule,“de jure investment and de factor loan” contract refers to the contract where the parties agree to invest in thename of equity and finally realize break-even exit through agreeing rigid payment and fixed income clauses.The first part specifically sets forth the concept and basic mode of “de jure investment and de factor loan”,discusses the restriction of financial supervision provisions on “de jure investment and de factor loan” transaction and the attitudes of judicial practice towards “de jure investment and de factor loan”.Chapter Two is about the affirmation of“de jure investment and de factor loan”legal character and the analysis of similar systems.In present academic community and judicial practice,there are several different opinions about the legal property ownership retention,datio in solution appointment and transferring guarantee of “de jure investment and de factor loan” transaction.In “de jure investment and de factor loan” transaction arrangement,the real intention of the parties is to take equity transfer as the guarantee of loan.In other words,the consensus of equity transfer between parties is not equity transaction,and equity transfer is just a means of guarantee.As a result,the author considers that “de jure investment and de factor loan”should be classified under the category of guarantee in broad sense.The “de jure investment and de factor loan” contract is in reality a generalized security contract where the parties concurrently agree equity transfer affairs and debtor-creditor relationship.Chapter Three presents the norm of current laws and regulations for “de jure investment and de factor loan” and the equity debt affirmation criteria of “de jure investment and de factor loan”.In this part,the focus is the efficacy of “de jure investment and de factor loan”.In early judicial practices,“de jure investment and de factor loan” agreement is possibly affirmed to be invalid because of the inviting suspicion of conspiracy and hypocrisy or fluidity clauses.The efficacy of repurchase clauses is also a major concern.Subsequently,this part differentiates the restriction on“de jure investment and de factor loan” transaction between Corporation Law and bankruptcy proceedings,straightens out the internal relation and external relation of“de jure investment and de factor loan” equity debt quantitatively,and determines the restriction of equity transferee on transferred right dominance and the rights enjoyedby “de jure investment and de factor loan” transaction investors in bankruptcy proceedings.Chapter Four takes “de jure investment and de factor loan” as the entry point,and investigates the applicability of civil law in business trial throughout the discussion of the difference between guarantee and rechtsschein theorie in civil law and business law.It concludes that it is improper to simply handle the applicability of civil law according to the logic relation between general law and special law,and besides,attention should be also paid to the applicability of principles of business law and business habits in specific cases.