Research On The Legal Issue:Debt-to-Equity Swap Of Bank In Insolvency

Bankruptcy reorganization is an important measure to help enterprises with bankruptcy reasons but with the possibility of regeneration to achieve reorganization.Its goal is to get the target enterprises out of the debt dilemma and restore their continuing operation ability.Debt-equity swap can directly relieve the financial pressure of bankrupt enterprises and indirectly help them to gradually restore their operating ability: converting creditors(mainly the creditor’s rights of commercial banks to bankrupt enterprises)into equity can not only give debt enterprises a chance to survive,but also enable creditors’ claims to be paid off to the maximum extent.However,due to the Chinese strong policy of debt-to-equity conversion,the current round of the bank debt-to-equity conversion lacks the support of relevant policies and regulations,and the implementation rules are not perfect,which is even more scarce in bankruptcy reorganization.Based on the background of this study,this paper divides the text into four parts,studies the relevant theories of bank debt-for-equity conversion in enterprise bankruptcy reorganization,draws on the current legal norms and experience in bank debt-for-equity conversion practice,draws lessons from the experience of other foreign countries in the development of debt-for-equity exchange,deeply analyzes the legal problems existing in the formulation of bank debt-for-equity conversion scheme,voting and equity withdrawal,and gives some suggestions for perfection.The first part is an overview of bank debt to equity in bankruptcy reorganization.This part describes the basic concept of debt to equity,and compares policy debt to equity with market-oriented debt to equity.This paper discusses the particularity and feasibility of bank debt to equity.The second part is an overview and evaluation of debt-to-equity system in foreign bankruptcy reorganization.The United States,Japan and South Korea represent three different debt-for-equity swap systems.The foreign debt-for-equity system has important reference significance for our country in the aspects of strict regulation of the scope of creditor’s rights and reasonable evaluation of creditor’s rights,in giving full play to the principle of marketization and in the continuous exploration of the way of realizing multiple withdrawal of equity.The third part,through the summary of the legislation and practice of bank debt to equity in China,finds a series of problems.The unclear conditions and procedures of bank debt to equity transfer and the choice of equity transfer will affect the further development of debt to equity system.Because the legislation of our country is not perfect,the public power of our country permeates the concrete implementation of bank debt to equity.Whether the exit channel of bank debt to equity is smooth will directly affect whether the bank can realize the purpose of disposing non-performing assets through debt to equity.The fourth part,put forward the bank debt to equity in bankruptcy reorganization perfect suggestion.By clarifying the conditions of the transferred enterprises and perfecting the implementation rules of the transfer of shares,the procedure of bank debt to equity transfer is standardized.By relaxing the conditions for enterprises to issue preferred shares and encouraging the wide application of preferred shares in bank debt-to-equity swaps,it is helpful to realize the stable right of repayment and priority of debt-to-equity implementing agencies.At the same time,the paper puts forward to optimize the linkage mechanism of government and court to play a positive role.It is suggested that through the consultation mechanism between the Supreme Law and the CSRC,it is beneficial to ensure that the compulsory approval of the reorganization plan of the conversion scheme can be legal and reasonable.Through the improvement of the specific system of equity withdrawal,the exit channel is more smooth,and the use of preferred stock to realize equity withdrawal can make the exit channel more diversified.