| The rule of substantive consolidation of bankruptcy is a special legal rule created to solve the problem of bankruptcy of affiliated enterprises in judicial practice.Substantial consolidation breaks down the barrier of separate personality of affiliated companies by combining the assets of each affiliate and then settling the creditors in a unified manner.By analyzing the historical evolution of the standards applicable to the rules of substantive consolidation in bankruptcy,The United States in the early stage of the standard establishment is mainly relying on fraudulent property transfer,and later appeared the legal personality mixed,asset separation difficulties,creditor reliance interests and other comprehensive standards,which is very valuable reference for the construction of substantive consolidation bankruptcy rules in China.From examining the practical situation of the applicable standard of substantive consolidation in China,firstly,although the rules of substantive consolidation of bankruptcy are widely used in China’s judicial practice,it is still in a state of legislative gap.Secondly,whether the scope of application of substantive consolidation can be extended to affiliated enterprises that do not yet have a cause of insolvency and whether the applicable principle is universal or prudential is the focus of controversy in theory and practice.Again,excessive reliance on the negation of legal personality in the company law makes the criteria for judging the conflation of legal personality unclear,blurring the boundaries between the two while also expanding the discretion of judges.At the same time,the internal logic of the comprehensive application criteria is unclear and does not adequately consider the reliance interests of creditors.In short,these factors leave a lot of uncertainty in the applicable standards.To improve the standards for the application of substantive consolidation rules in China,substantive consolidation rules should be incorporated into the normative system of insolvency law,filling the gaps in the legislation and ensuring as much certainty and predictability of substantive consolidation rules as possible in accordance with the value objectives and legislative purposes of insolvency law.In view of this,a "dualistic" standard of application should be constructed with the conflation of legal personality at its core.Specifically,the inclusion of affiliated enterprises that do not yet have a cause for insolvency in substantive consolidation insolvency proceedings on a case-by-case basis is guided by the principle of prudential application,taking into account the balance of interests,and using the fraud standard as an independent standard of judgment,Adherence to a comprehensive standard of judgement with a high degree of conflation of legal personality as an element of conduct and indistinguishability of assets and damage to the interests of creditors as an outcome factor.At the same time,the circumstances in which the rules on substantive consolidation of insolvency apply are expressly excluded to safeguard the reasonable reliance interests of creditors in individual cases and to exclude situations that do not conform to a high degree of conflation of legal personality. |
