Research On The Issue Of The Substantive Merger Of Related Enterprises In Bankruptcy

The principle of substantive consolidation originated from bankruptcy practice of American.It refers to corporate groups,such as parent-subsidiary companies,group-owned companies.In the course of business,there are mutual guarantees,debts,capital,business premises.The corporate personality is highly mixed and damaged,which influences the interests of creditors.When these enterprises have the reasons for bankruptcy,they are treated as a whole in the bankruptcy process,correcting their behavior of ignoring the independence of legal personality,that is,denying the individual corporate personality of these affiliated companies,and treating them as a whole to pay the creditors.The rationality of this principle lies in correcting the high mixture of corporate personality in the process of bankruptcy,and at the same time effectively solving the chaotic asset transfer between affiliated companies,guaranteeing the procedural difficulties brought by bankruptcy.This principle has important fair value and procedural value.However,in practice,the economic relationship between the creditors and the affiliated companies is complicated,the subjective statement of the transactions is different,so substantive consolidation might damage interests of these creditors.The aim of bankruptcy law is to make each creditor fairly compensated.There is no provision for the substantive consolidation,but there has been practice of bankruptcy of the affiliated enterprise.In response to various attempts and explorations of substantive mergers in practice,the Supreme Court issued the Minutes of Bankruptcy Trial Work Conference on March 4,2018,as the court’s guidance in adjudicating bankruptcy work.Based on the points highlighted in the minutes,this paper combines the substantive consolidation cases collected from China Judgement online and National enterprise bankruptcy information disclouse platform,and analyzes the problems,and explores the path of solving the substantive consolidation problem in China.