On The System Of Suspension Of Security Right In Bankruptcy Reorganization Procedure

In the bankruptcy and reorganization proceedings,the system of suspension of the exercise of security rights has problems such as unclear provisions on the applicable conditions,scope and duration of suspension and resumption of the exercise of security rights,and insufficient protection of the rights of the secured party.The provisions of "whether the collateral is necessary for the reorganization of the enterprise",the specific types of security rights that should be suspended,"the possibility of collateral damage or significant reduction in value",and "sufficient to endanger the rights of the secured party" in the suspension system are not clear,and there is no unified judgment standard.Determine whether the collateral should be suspended by allocating the burden of proof,distinguishing the nature of the collateral,and setting different standards of proof for different collateral,and consider the interests of the enterprise and the secured party fairly.The literal meaning of the security right is limited to the security right that does not transfer possession.After the bankruptcy and reorganization of the enterprise,all the security rights that do not transfer possession of the secured property need to be suspended immediately and automatically.The "significant decrease in value" of collateral should include the decrease in value of collateral due to market fluctuations.If the value of the realized money after the realization of the secured property is less than the amount of repayment that the secured party should obtain in the normal bankruptcy liquidation procedure,it should be determined that "sufficient to harm" the rights and interests of the secured party.The applicable time point of the suspension system shall be advanced to the time when the enterprise applies to the court for bankruptcy.The court can solve the problem of inefficiency in the trial of the application for resumption of exercise by establishing a rapid trial system.The specific distribution of the burden of proof that each subject should bear in the system of restoring the exercise of the security right should be that the secured party should provide proof that the value of the collateral has been damaged.If the debtor’s enterprise does not cooperate in the evidence collection,the secured party can apply to the court for issuing a court investigation order or a lawyer’s investigation order to assist itself in completing the evidence collection;At the same time,the debtor’s enterprise proves that the collateral is necessary for the bankruptcy reorganization of the enterprise,and the existing value of the collateral is not significantly reduced from the initial value.In this process,the business judgment of the enterprise on the guarantee property should be respected.In case of major disputes between the two parties,they have the right to consult experts or introduce professional evaluation institutions to participate.In view of the problem that the provisions of the secured party’s priority to be repaid,the realization right and the deferred interest to be repaid are unclear and there is no corresponding relief mechanism,the realization right should be allowed to realize the secured party’s priority to be repaid.The debtor’s enterprise shall make appropriate compensation to the secured party within the limit of the actual value of the secured property.The creditor’s objection handling mechanism shall be established.At the same time,the right of objection of the secured party shall be exercised in different stages according to the reorganization process of the debtor’s enterprise.The important dividing line of this time stage is whether the exercise of the secured property has been suspended.The secured party has only the right to vote on the draft reorganization plan and has no right to participate in the formulation of the reorganization plan.In this process,it lacks the right to speak and cannot put forward targeted opinions in a timely manner.It undertakes the problem of high risk in the process of enterprise bankruptcy and reorganization and even in a period of time after that.It should provide for multiple subjects to draft the reorganization plan,and strengthen the interest linkage and balance between the diverse subjects,The reorganization plan drafting group composed of relevant stakeholders shall jointly negotiate to draft the reorganization plan.