Analysis Of The Legal Issues Of The Transaction Mode Of "name Stock And Real Debt"

There is no official legal definition of "Formal Equity-essential Debt".It is a trading mode characterized by both equity investment and creditor's rights investment in the process of corporate financing,which has the transaction structure of equity investment,fixed income and capital withdrawal.Because of market information asymmetry,investors' limited rationality and changes in investment and financing environment,market participants design complex trading structure to maximize their respective benefits.The commercial contracts reached between the two sides embody their respective benefit game and risk measurement.Based on the background of "deleveraging",there exists some regulatory measures in specific areas limiting and regulating the methods mentioned above.But with the demand for commercial financing growing,market participants continue to tend to using "Formal Equity-essential Debt" to reduce transaction costs and improve transaction efficiency.Through the empirical analysis of the cases,the dispute points of the relevant transaction in practice mainly focus on the problem of the equity of the contracts and the validity of the contracts.The corresponding judgment results are not the same.Due to the blankness of relevant legal rules,there is no unified standard of adjudication when similar trading models meets same disputes.Comparing with the market subjects,the judiciary lacks the accurate grasp of the transaction situation and commercial logic behind the transaction.As a result,the judgements maybe damage the efficiency value of commercial transactions because of the excessive pursuit of fairness.This paper studies that how the judiciary authorities deal with the legal problems caused by the innovative trading measures in order to meet the market needs under the premise of the value of " Efficiency first,fairness second " in commercial law,through case study,empirical research and literature research.Equity investment and creditor's rights investment have their own advantages and disadvantages for company financing,and they are not quite distinct from each other.The market subjects choose this kind of mash-up trading structure,which stems from their measurement and interest choice of market trading factors.Market risks such as information asymmetry,uncertainty of company's operational risk,counterparty opportunism and finite rationality have been taken into account in the design of transaction structure.This is the current market financing environment trend.Limitation and negating can not effectively respond to market expectations.The different equity and debt factors contained in the different links of the financing chain make it difficult to unify the standard of the determination of the nature of the transaction in practice.If the dispute is resolved with pursuing "substantive judgment" too much,it will often break the distribution of the rights and obligations of the parties under the commercial contract.Both sides of the transaction will exempt from the responsibility and obligations if the benefits brought by the trading structure is not recognized,which can ultimately make the investment and financing arrangements used by the rational parties to balance the risk returns fall through.The court's trial logic for the validity of the contract focuses on the consideration of the interests of creditors,company and other shareholders,applying the principles of shareholder equality and capital maintenance.Model-based views that having the priority rights compared to other shareholders makes investors violate the principle of shareholder equality,taking property from the company will make shareholders inevitably break the principle of capital maintenance,will weaken the market's enthusiasm for financial innovation by ignoring personality judgment and then denying certain types of transaction structure.The emergence of the "Formal Equity-essential Debt" trading model is the production of market conditions and economic situation.When the contract already includes the interest game between the opposite party and the choice of opportunity cost,denying the validity of the contract simply and straightly through the theory of principle without carrying out personality analysis on the case will be counterproductive,although the interest protection is the starting point.As a kind of commercial transaction innovation,the financing structure of "Formal Equity-essential Debt" serves for the profit-goal of commercial behavior.Therefore,the adjudication of such disputes should also reflect the value orientation of commercial law "efficiency first and taking account of fairness",focusing on maintaining the outcome of the transaction,the order of the transaction and the predictability of the transaction by the market participants.In terms of the nature of the trading mode,if the transaction structure constructed by the parties is lawful and compliant and does not involve a third party,the parties' rights and obligations in each transaction should be respected.The whole financing process should be viewed from a holistic perspective.Avoid investing too much personal value judgment and thinking the problem too essentially.We should treasure the value of the diversity of legal forms and respect the right of the parties to choose between the pluralistic legal forms.In the determination of contract effectiveness,the judiciary authorities should strictly abide by the provisions of the General Principles of Civil Law on the validity of civil legal acts and the provisions of Article 52 of the Contract Law so as to avoid the extension of the application of law principles and the excessive interpretation of the public interest.The judiciary should adopt a modest and restrained attitude to provide greater space for autonomy for financial and commercial innovation,and thus release market vitality to respond to market expectations.