Research On Substantive Consolidation Of Affiliated Enterprises’ Bankruptcy In China

The principle of substantive consolidation is a fair remedy for the bankruptcy of related enterprises created by the US courts in practice.On the issue of substantive merger bankruptcy,China’s judicial practice has gone ahead of the legislation,and the lack of legislation has led to great differences in the standards of applying substantive merger system in local people’s court at various levels.In response to various attempts and explorations of substantive mergers in practice,the Supreme Court issued the Minutes of Bankruptcy Trial Work Conference in March 2018,as the court’s guidance in adjudicating bankruptcy work.But the rules of the conference minutes still need to be refined and tested.To build up a substantial merger bankruptcy system suitable for China’s national conditions meets the actual needs of China’s bankruptcy field.The legal relationship involved in the substantive consolidated bankruptcy case is very complicated and the decision of the merger will have a significant impact on the interests of multiple participants in the case.Therefore,it is necessary to strike a balance between between the two goals:reasonable use of the substantive merger and the effective protection of the interests of dissenting creditors.The development of the substantive merger system is actually a process of continuous coordination and balance of the above two goals.The focus of this coordination and balance is reflected in the conditions of judicial application of substantive merger.Based on the Minutes of Bankruptcy Trial Work Conference,this paper deconstructs the legal issues of substantive merger from the perspectives of applicable standards and rights protection.First,it studies the basic theory of substantive merger bankruptcy system to provide theoretical guidance for the subsequent system construction.Secondly,it sorts out China’s substantive merger and bankruptcy system from the perspectives of judicial text and trial practice,and analyzes the problems in the application of the system in judicial practice.Finally,this paper investigates the applicable standards of the substantive combined bankruptcy system in the United States,and the independent application conditions for the substantive merger and bankruptcy system of our affiliated enterprises are constructed on the basis of drawing on the experience of other regions.