Study On The Legal Issues Of The Debt-to-equity Swap In Bankruptcy Reorganization Procedure

In recent years,the debt-to-equity swap has received a new upsurge because of the relevant documents issued by the State Council.For the enterprises in the process of bankruptcy reorganization proceedings,the choice of debt-to-equity swap helps to solve their debt burden,reduce the leverage ratio,at the same time,it can renew their own governance structure and stimulate the reconstruction and development of enterprises.As in judicial practice,debt-to-equity swap is also a hot topic in academic circles,because many problems of debt-to-equity swap in bankruptcy reorganization proceedings have not yet formed a consensus,and there is room for discussion.Based on the nature of debt-to-equity swap,the author combs the legal dilemma in the process of its implementation and puts forward corresponding solutions,hoping to make a modest contribution to the application of debt-to-equity swap in bankruptcy reorganization proceedings.The first part is the introduction of this paper,including the background,research significance,literature review and research methods.The second part is about the meaning and classification of the debt-to-equity swap,the nature and mode of debt-to-equity swap in the bankruptcy reorganization proceedings,the necessity of debt-to-equity swap in the bankruptcy reorganization proceedings.Debt-to-equity swap refers to the act of converting the creditor’s right of an enterprise into equity and eliminating part or all of the debt of the enterprise.There are many different views on the nature of debt-to-equity swap in the bankruptcy reorganization procedure in the academic circles,such as the theory of Debt-to-equity Offset,the theory of Datio in Solutum and the theory of Procedural Law.The author agrees with the theory of procedural law,because the debt-to-equity swap in bankruptcy reorganization procedure is in a special context,and should not be regulated simply by the general context of debt-to-equity swap regulation.The third part is about the status quo and legal dilemma of debt-to-equity swap in the bankruptcy reorganization procedure.This paper expounds the present situation of debt-to-equity swap in China,and sums up the legal difficulties faced by theimplementation of debt-to-equity swap in bankruptcy reorganization proceedings.These difficulties include the lack of relevant laws and regulations,the lack of clear debt-to-equity swap mechanisms,the infringement of creditors’ interests and the irrational corporate governance structure after the debt-to-equity swap.The fourth part mainly focuses on the current situation of Foreign debt-to-equity swap.The author selects the United States and France which carry out debt-to-equity swap in bankruptcy reorganization proceedings,and analyzes the regulation of debt-to-equity swap in bankruptcy reorganization procedure through the two countries,to improve the legal environment of debt-to-equity swap in bankruptcy reorganization proceedings in China.The fifth part puts forward the corresponding consummation suggestion to the question which the third part studies discovers,it includes perfecting the legal basis of debt-to-equity swap in bankruptcy reorganization procedure,optimizing the related mechanism of debt-to-equity swap,perfecting the specific system of creditor protection and perfecting the governance structure of debt-to-equity swap.