Enterprise Bankruptcy Law of China

Topics: Bankruptcy, Liquidation, Debtor Pages: 6 (1926 words) Published: January 10, 2014

Enterprise Bankruptcy Law of China
December, 1st, 2013

Contents

A. Introduction
"PRC Enterprise Bankruptcy Law" by the Standing Committee of the Tenth National People's Congress of the PRC on the twenty-third meeting of 27 August 2006, adopted in order to regulate bankruptcy process, fairness clearing debts, protection the legitimate rights and interests of creditors and debtors, safeguard the socialist market economic order, so make this law. Implemented on June 1st, 2007. To understand the importance of this new law, only to see it replaced the old bankruptcy law that the Department on the line. The law at the beginning of China's economic reforms enacted 20 years ago in all bankruptcy proceedings will be placed on the government dominance. Closed due to bankruptcy because of fear of unemployed workers in state-owned enterprises will lead to social unrest, the old bankruptcy law to be considered in the political focus on more than economic factors. This law will bankrupt the interests of employees placed above the interests of creditors. The private sector in this law or simply not mentioned, so bankruptcy of private enterprises has been no clear law applicable to regulate. B. The new bankruptcy law of China

Implementation of the new bankruptcy law also allows for bankruptcy protection in Beijing for the first opportunity to introduce the concept of China. Section 73 of the Act , based on the companies to make filing for bankruptcy reorganization after rebirth , having to settle onto the closed roads , the bankruptcy court has the power to approve the enterprise under the supervision of the Manager to manage their property and business affairs . But this does not mean that the new bankruptcy law will ever be perfect. Some vulnerabilities could cause the politicians to continue to intervene in corporate bankruptcy matters. For example, although the bankruptcy was appointed to the charge of corporate managers may be professionals , but they have the right to appoint judges who are often not professionals . As the income level managers are more likely to be determined by the court rather than the creditor , so the judges and their friends in the local government will get a more interventionist bankruptcy matters convenience. But the new bankruptcy law is still an important step in the right direction , particularly with regard to the restructuring of China's financial system is concerned . China 's financial system is still plagued by a large number of bad debts caused by bankruptcy . According to the American Institute for International Economics in Washington (Institute for International Economics) recently estimated that China 's total bad debt equivalent to 162 percent of the country 's GDP . If the Chinese banking sector in order to withstand the downturn in economic growth in the test , we must solve the problem of bad debts . C. The Bankruptcy procedures

So far, corporate bankruptcy proceedings have been so vague that China's four state-owned banks and some small shareholders who make mismanaged liquidation bankruptcy regarding prohibitive. Although Chinese banks to obtain a controlling stake in many companies through debt-equity swap transaction, the bank intends to come forward but there is no direct management of these companies. These banks are not prepared to judge the credit risk of the private sector in many cases they still tend to support local governments and state-owned or private lending. So the new bankruptcy law specifically develop the terms for financial regulatory agencies to apply to court for bankruptcy reorganization or liquidation of financial institutions. Specific bankruptcy processes as Appendix 1,2,3,4.

D. The order of pay off
When a company enters bankruptcy proceedings, liquidation order, how many creditors arrangement "PRC Enterprise Bankruptcy Law " on page 113 is such a requirement: (a) the...


Bibliography: or Literature Cited
[1] Jian Zhijie:《Description 》
[2] Yi Zongru《Analysis of the U.S. Bankruptcy Code Case》
Foreign Economic and Trade University Publishing House
[3] Li Yongjun:《Bankruptcy Law》
China Legal Publishing House, 2000 edition
[4] Li Fei《Contemporary foreign insolvency law》
China Legal Publishing House
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