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On the restructuring of China's listed companies and related problems

Author: ChenYanLin From: www.yourpaper.net Posted: 2010-05-09 02:05:05 Read:
Paper Keywords: restructuring shareholders' equity of listed companies protect the information disclosed
Abstracts: Restructuring emerge from bankruptcy, to achieve mutual benefit and win-win outcome of the debtor, creditors and society and the creation of the system so that the enterprise toward crisis. This system of China's new bankruptcy law, slightly rough, and the restructuring of listed companies, there is no detailed provisions related judicial interpretation is not introduced, which gave the trial of the case brought a certain degree of difficulty, resulting in practice when some of the problems different handling practices. Perfect the reorganization system related legislation can guarantee the smooth progress of the restructuring of listed companies.
Corporate bankruptcy reorganization system before well-test of practice, is determined to be a reliable system for large enterprises solve the troubled debt problem and its revival. Enterprise Bankruptcy Law of the People's Republic of China "since June 1, 2007, our country, there are more than 10 listed companies through corporate bankruptcy reorganization proceedings given a new life, while our current legal system lacks restructuring of listed companies particularity the provisions of the Companies Act, the Securities Act and other related laws, and not to form a coordination mechanism, making the path of the restructuring of these enterprises go hard. The listed company is a special enterprise legal person, when it comes to improving the system of bankruptcy reorganization, should take into account the particularity of the listed companies.
First, the problems existing in China's listed company reorganization system running
Listed companies are re-engineering of an exceptional nature, but has yet to have a special provision to regulate them, caused certain obstacles to the use of the listed companies in reorganization proceedings in the practice.
First, corporate governance is not in place in the bankruptcy reorganization process. Listed companies in the restructuring process, the lack of effective self-management of the debtor constraints, resulting in the the debtor by leaving enterprises manage their own recovery nascent advantage is difficult to play. The administrator of the unclear legal status, and management of the liquidation group evolved into reality. The liquidation group mainly by local government departments, plus managers composed of the intervention of the government executive powers, bankruptcy and reorganization proceedings may evolve into a tool of the local government reorganization of listed companies, managers often difficult to work in practice.
Second, the lack of special provisions for restructuring in financing measures. The listed companies in the restructuring process, the introduction of new strategic investors to inject quality assets for enterprises is an important means to promote the success of corporate restructuring. In practice, most of the listed companies taken under the coordination of the local government, investor interest adjustment and the introduction of new capital for the enterprise to obtain the funding sources of the corporate restructuring plan execution, which involves the transfer of equity interest, the cancellation of the shares and the issue of new shares acts such as the lack of a clear legal norms to adjust, easy to damage the interests of shareholders and other stakeholders. The new enterprise insolvency law does not make provision for creditors market practice can only rely on the coordination of relevant government departments. The successful reorganization of listed companies is largely dependent on an active market of creditors, how to promote the debt market construction Next bankruptcy law and related supporting law problems to be solved.
Third, detailed provisions the court to force approval of the conditions of the draft reorganization plan is not for lack of operability in practice. Court approval of the reorganization plan, divided into mandatory approval of each voting group through the draft reorganization plan approved through the draft reorganization plan is not part of the voting group. Although Article 87 of the Enterprise Bankruptcy Law "made to court to force approval of a reorganization plan provides for the principle, but, due to the lack of specific supporting measures Jing, resulting in the court seised in practice is difficult to grasp the mandatory approval of the standard, so difficult to reflect the interests of the value of the protection of creditors legitimacy program.
Second, understanding
Scope reorganization system
Most of the countries and regions in different laws on bankruptcy reorganization proceedings Scope. Japan, Taiwan, China and the United Kingdom reorganization system only applies to the stock company. Reorganization system in addition to the U.S. bankruptcy law applicable to the Company, can also be applied to individuals and partnerships. French bankruptcy law reforming the system can be applied to all merchants and artisans, as well as private law, and even agricultural operators are also included. In fact, closely related to a country of a legal regime applicable to the scope of the regulations and the composition of its own legal traditions and legal systems. The size of the scope of the bankruptcy law reforming system directly determines the degree of realization of the objectives of the applicable range of the value of the system is not conducive to centralized social resources too wide to save large enterprises, also easy to abuse by Ning guilty of moral hazard which escape debt: the restrictions are too strict a certain extent to prevent abuse, there is overkill in danger, making it difficult to correctly reflect the value of reforming the system, the final departure from the purpose of this legislation reforming intended to revitalize the enterprise.
China's new bankruptcy law has made a corporate legal entity as such a general and limited the scope of the reorganization system requirements, I think that such a provision is reasonable. First, in line with China's actual corporate legislation reforming the scope of the standard limited enterprise legal. Establish the correct corporate Legislative value orientation construct the framework of the Enterprise Law, the first should be the main market participants to make the division of science Secondly, we must closely rely on the fundamental responsibility of the form of capital and funders, to adhere to an open, fair and impartial the principle of market competition. For our country in the past by the nature of ownership by the State-owned Enterprise Law, the law of collective enterprises, are still now apply on the period, so the scope of the standard of our restructuring, ownership should not be divided on reforming the object should not be limited to directly companies, in order to avoid some leakage lack of those who have not been transformed into a company's corporate the chances of applicable reforming. Secondly, in order to prevent the occurrence of the drawbacks of reforming the system from being abused or exploited so as to avoid bankruptcy or delaying debt, the need to pass legislation reforming limit the scope of the enterprise legal person. Because the restructuring program has the strong force, once filed, will I played many series of legal relationships occur. Reforming procedures for requiring relatively loose, vulnerable to abuse and thus undermine the legitimate rights and interests of creditors of the debtor. So the legislation will be re strictly limited to the scope of the enterprise legal, to the exclusion of individuals, unincorporated body. This can effectively prevent small and medium-sized enterprises and individuals by restructuring to evade the debt. In addition, there are many experts and scholars propose to restrict the scope of the reorganization system for listed companies, the reasons is the high cost of re-engineering program, time-consuming, and general business can not afford. Indeed, judicial practice proved that mainly applies to the main program of the bankruptcy reorganization of listed companies. The reorganization system but that does not mean that other enterprises do not need to. I think that the restructuring of listed companies is a special case of the bankruptcy law reforming system. Need special consideration. Be noted here is that our restructuring legislation will apply to limit the scope of the enterprise legal person, but not all enterprise legal trouble are of course applicable restructuring program, it also depends on the autonomy of the creditor and the debtor as well as court particular study, eligibility does not mean absolute implement.
Three listed companies restructure in shareholders' equity protection issues
Debtor's shareholders as an independent body to participate in reforming the legal relationship in the past, this has been a clear manifestation of the Bankruptcy Reorganization in China's new Enterprise Bankruptcy Law. Chapter VIII of the "re-engineering" system, reforming the right to apply the provisions of the shareholders 'rights of the right to vote, and many of the the adjustment matters related to shareholders' equity in the draft reorganization plan. But in general, the existing ordinance is rather sketchy, and no restructuring the debtor's shareholders entitled to participate in the legal status of the subject to form a more complete and clear regulation. The new bankruptcy law has been traveling for two and a half years, during which the case of many listed companies restructure, some specific issues into no laws in an awkward position due to the brief of legislation and judicial practice. The protection of the interests of shareholders as an important issue.
(A) The right to apply for re-engineering
Reforming the right to apply the provisions of Article 70 (2) shareholders of the China's new bankruptcy law: the creditor to apply for bankruptcy and liquidation of the debtor, the People's Court has accepted a bankruptcy application, declare the debtor bankrupt, debtor or financing accounted debtor investors of more than one tenth of the registered capital, can apply to the people's court restructuring visible, our new "bankruptcy law" reforming the right to apply for the shareholders made the special conditions, namely the shareholders to apply for restructuring should be to creditors debtor for bankruptcy liquidation in the premise, and the court accepts the application for liquidation, declaring the debtor bankrupt before the time period proposed. Our shareholders the right to apply for rationalization so it can be called a "bit application right after," after the bit right to apply so that shareholders can not be directly proposed a reorganization of application, even in the case of an application for liquidation of the debtor rather than the creditor can not apply for re-engineering. I think the new bankruptcy law reforming the right to apply the provisions of the shareholders of the bit application right after "an inappropriate term. The reorganization system's fundamental purpose is to avoid bankruptcy to save the business, belongs to the prevention bankruptcy system, So, from a logical point of view, the conditions of restructuring should be wider than the condition of the bankruptcy liquidation. People's Court accepted the creditors on the debtor's bankruptcy liquidation application, the company has actually insolvency of reasons r, then the time to allow the investor to apply for re-engineering, often too late, the companies lost the best time of the restructuring, which is clearly inconsistent with the aim to set up a re-engineering system, may also make provision itself lost its practical significance. So, I think the legislation should be separate application for restructuring the rights given to the debtor's investor shareholders enjoy, rather than give its bit application right after ", meaning that the investor of the debtor at the debtor and creditors did not apply for re-engineering can under the premise of "advance" application re-engineering, but taking into account the relationship between the investor and debtor rights institutions, legislation should also make a re-engineering of the investor the right to apply for a certain degree of restriction, such provisions must fulfill certain pre-relief program restructuring application that has been made to the debtor's rights bodies, but were refused or not answered within a reasonable period.
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