On The Compulsory Approval System Of Bankruptcy Restructuring Plan

According to the provisions of Article 87(2)of the Business Bankruptcy Law,in the enterprise restructuring process,even if the draft restructuring plan is not approved by all voting groups,if certain conditions are met,the court can apply for compulsory approval of the draft restructuring plan.Due to the incompleteness of the existing provisions,the compulsory approval system has not given full play to its positive value,but the application rate has reached 100 percent.Therefore,it is necessary to comprehensively analyze the existing problems of the system,analyze its value basis and basic principles,and put forward suggestions for improvement and restructuring.This study is divided into four chapters to discuss the above issues in turn.The first chapter on the basis of a brief analysis of the implementation of the compulsory approval system on the basis of the system systematically sorted out the existence of the entity and procedural problems.The substantive problems mainly include imperfect application standards,unreasonable application standards,irregular jurisdiction of the court,and dislocation of administrative intervention.On the one hand,at the application stage,the number and characteristics of the voting groups that have passed the draft restructuring plan are not clear,and consultation and a second vote are not mandatory.On the other hand,at the court stage,the existing applicable standards are either unfair or unworkable.Moreover,when the court exercises the power of compulsory approval,it usually uses the liquidation value of enterprises as the comparative basis mechanically,often directly on the basis of social public interests.Procedural problems mainly include the lack of buffer program and objection mechanism.On the one hand,if the draft restructuring plan is not approved in the first vote,the debtor or administrator can directly apply for compulsory approval without consulting with the opposition group or taking a second vote.Such hasty program design makes the due process of full independent negotiation,consultation and compromise between the parties into a fantasy.On the other hand,during the court proceedings and after the decision on whether to grant compulsory approval,the dissenting parties have no way to express their opinions and objections,thus lacking the opportunity to obtain relief.The second chapter analyzes the balance of interests in the compulsory approval system in detail according to the nature and objective of the business bankruptcy law,and introduces the necessity of the balance of interests of the three most important groups,the justification of the adjustment of interests of the relevant subjects and the scale of the adjustment of interests.First of all,among the creditors,due to the difference between the concept of the guarantee system and the restructuring system,the restructuring system needs to guarantee the operating value of the debtor,and the secured creditor should make the greatest sacrifice in the restructuring process,especially the interest adjustment of the secured creditor should be attached importance to.In this regard,we should stick to the bottom line of fair compensation and no substantial harm.Secondly,there is a conflict of interest between the investor and the creditor due to the corporate law idea that the investor’s interests are supreme and the business bankruptcy law idea that the creditor’s interests are the greatest.There is only a pure debtor-creditor relationship between the creditor and the debtor,while the investor has more rights to the debtor and thus should have more obligations,and the investor is often responsible for the debtor’s apparent business difficulties.In adjusting the interests of investors,we should grasp different scales according to the reasons for restructuring,only when the debtor insolvent application for restructuring investors to the debtor’s residual property claim will disappear completely,restructuring plan does not need to retain any rights and interests.At the same time,it should be treated differently according to the degree of control of the debtor by the investor.Finally,the balance between personal and social interests is equally important.Due to the increasing social impact of enterprise bankruptcy and the lack of natural interest relationship subjects,it is necessary to adjust individual interests in the restructuring.There are two conditions for sacrificing certain personal interests: the reasonable identification and full demonstration of social interests,and the optimal internal adjustment of personal interests.The third chapter introduces the connotation and specific requirements of the basic principles of the compulsory approval system,reflects on the deficiencies of the relevant provisions of the bankruptcy law of our country,and puts forward some suggestions for improvement one by one aiming at the implementation of the basic principles.First,the Minimum Acceptance Principle requires that at least one group of voting groups whose rights have been affected have already approved the draft restructuring plan,which is the bottom line for the mandatory approval process to begin.Bankruptcy law should specify the number and characteristics of the voting groups that have passed when the debtor applies for compulsory approval.Second,the absolute priority principle requires that the restructuring of the value distribution must follow the established priority distribution order,to curb the bad motivation of the interested parties to negotiate.Chinese bankruptcy law should expand the application scope of the absolute priority principle and apply it to ordinary creditors and investors.Third,the principle of the best interest to creditors requires that any creditor who opposes the restructuring plan must be paid more in the end than it would be paid if it entered bankruptcy,which depends on the true and effective evaluation of the assets of the debtor’s enterprise.The bankruptcy law of our country should require the debtor to provide the evaluation report submitted by the independent third party evaluation agency and give the creditor full right to participate in the process to supervise.Fourth,the principle of fair treatment requires horizontal fair treatment between members of the voting group and vertical fair treatment between the voting group,and does not exclude reasonable differential treatment.Chinese bankruptcy law should clarify the standards for the establishment of small claims group and design differential treatment to apply to the investor group when necessary.Fifth,the principle of feasibility requires that the restructuring plan is feasible,which mainly means that the debtor’s operation plan in the restructuring plan should be specific,clear and operable.In this regard,the necessary content and degree of detail of the debtor’s business plan should be made clear,and the third-party evaluation agency should be used to assist the court in the examination.The fourth chapter of entity and procedure of the first chapter find problems,described in chapter 2,under the guidance of interests balance method in accordance with the mandatory approval application,trial,decisions and objection handling program flow of the system for the comprehensive restructuring,and the third chapter on the basic principles of the implementation of compulsory approval system suggestion.In the application stage of compulsory approval,the legal conditions that the debtor has completed full information disclosure,the first vote has met the minimum approval limit,the first vote has been negotiated and the second vote has been taken,and the form of reorganization plan is legal are put forward,and the parties shall provide the application within the prescribed time limit.At the court hearing stage,it is suggested to review the reorganization plan with the assistance of a third party through the mode of first hearing to hear the opinions of the parties and then further written review based on the opinions of the parties.When the court made the decision,it proposed to revise the creative form of decision within a time limit,aiming to give the parties the chance of autonomy to the maximum extent,and at the same time to give the legal status and application limits of social interests in the compulsory approval procedure.In addition,the court should also fully reason,timely announcements.When designing the objection mechanism,it is first made clear that the parties to the objection include the objection voting group and the individuals in the objection voting group,while the objection handling mechanism includes the hearing to express views and the decision to apply for reconsideration to the accepting court and to appeal to the higher court.