Abuse And Judicial Regulation Of Substantive Merger And Bankruptcy Of Related Enterprises

The substantive merger and bankruptcy of affiliated enterprises is a new problem in the bankruptcy of enterprises in China.There is no provision for this in the current bankruptcy law,but in judicial practice,the number of people’s courts applying substantive consolidation to deal with bankruptcy cases of affiliated enterprises is increasing.Substantive merger bankruptcy cases usually involve relatively large enterprise groups,with a large number of affiliated enterprises,ranging from two or three to hundreds,which have a great social impact.Therefore,how to properly handle the bankruptcy of affiliated enterprises and ensure the normative application of substantive merger has become a problem that cannot be ignored.However,trapped in the blank of substantive merger legislation,the identification standard of substantive merger under the current judicial system is not clear,and the right remedy path is not perfect.There is a selective application of management candidates.The people’s court freely delimits the scope of merger according to its authority and the abuse phenomenon of the invalidation of right remedy.It is urgent to build a perfect judicial regulation system to regulate the application of substantive merger.Specifically,to improve the judicial regulation of the abuse of substantive merger and ensure the normative application of substantive merger can be carried out from three aspects:emphasizing the application principle,clarifying the identification criteria and improving the rights relief of stakeholders.First of all,emphasize the applicable principle of "respecting the independence of legal personality as the principle and ruling substantive merger as the exception",strengthen the people’s court’s adherence to the basic principles when ruling substantive merger bankruptcy cases,and reduce the impact of substantive merger on the independent system of legal personality.Secondly,make clear the applicable standards of substantive consolidation,and construct a dual identification standard including the highly mixed legal personality and the protection of creditors’ rights and interests.The standard of asset separation difficulty is used as the basis for determining whether the degree of personality confusion is "high".In addition,it clarifies the exclusion and application of substantive consolidation,stipulates that substantive consolidation cannot be ruled based on the need for reorganization and other reasons,weakens the promotion of the need for reorganization on the application of substantive consolidation,and further limits the scope of application.Finally,it is necessary to improve the relief path for the rights of stakeholders.It includes the following aspects: First,optimize the public notice procedure,expand the notice path and further clarify the notice content,and ensure that more stakeholders participate in the hearing on the premise of ensuring the effectiveness of the notice.The second is to improve the hearing procedure,clarify the participants in the procedure,optimize the basic process of the hearing according to the order before,during and after the meeting,and list the specific rights enjoyed by stakeholders in the hearing procedure to ensure that the hearing procedure plays its due role.The third is to reasonably form the creditor committee,break through the limit of no more than 9members,and reasonably arrange the composition and representative selection according to the actual situation of the enterprise group.Fourth,under the dual review standards of formal review and substantive review,the court’s review obligations should be strictly enforced,and the act of incorporating enterprise members into substantive consolidation and bankruptcy should be treated with caution to avoid the occurrence of unfair liquidation.Fifth,in order to ensure the security and stability of the transaction,strengthen the protection of trust interests,and give priority to the creditors who enjoy the trust interests.Finally,in order to strengthen the protection of dissenting creditors who are in a weak position in the substantive merger bankruptcy proceedings,it is also emphasized to introduce confrontation in the substantive merger proceedings,grant dissenting creditors the right to appeal above,construct the substantive merger dissenting action by analogy with the execution dissenting action,and clarify the procedure of the substantive merger dissenting action,the subject of litigation and the legal effect during the litigation,in order to effectively protect the legitimate rights and interests of stakeholders.