Author
Assoc Prof Liu sixuan
Organisation/Institution
Law school of Soochow University
Country
CHINA
Panel
Bankruptcy
Title
Classification of claims in reorganization: Scrutiny for the Revision of bankruptcy law of China
Abstract
The importance of classification of claims can hardly be overemphasized. Section 82 of Enterprise Bankruptcy Law of China establishes the fixed classification pattern of reorganization plan voting, but the creditors' claims classification shows various and flexible characteristics in practice, such as "relocation and resettlement creditor group". The paper analyses the reason of such specific classification, and introspect the rationality of flexible classification and consider whether it should be included in revision of the insolvency law. The creditors in the same classification rank may have different interest demands for restructuring. The fixed classification would erode the voluntary autonomy of bankruptcy law.However, flexible classification is suspected of violating the principle of equality of claims. The paper concerns that the principle of equality of claims means similar claims should obtain the same distribution in bankruptcy proceedings, and different similar claims should be treated differently. But the ranking of rights doesn’t constitute the only criterion for similar claims, substantially similar criterion should be used as the standard for the separate classification. Some factors can be taken into account when we identify substantially similar , such as the way of discharge, supplier-creditors, loyal customer. Another issue is “business purpose” to be used as rational exception for placing substantially similar claims into separate classes. What’s more, the “cram down” provision in bankruptcy code require at least one class of impaired creditors votes to accept the plan. If flexible classification is applied, It is urgent to have a bright rule line to prevent classification from gerrymander classes in order to obtain approval for a reorganization plan which would otherwise not be approved. ※Section 82 of Enterprise Bankruptcy Law of PRC When creditors take part in the negotiation and voting on the draft reorganization plan, they shall be separated into the secured creditor class, the employee creditor class, the tax creditor class and the unsecured creditor class. The court can decide to add a small amount unsecured creditor class when it is necessary.
Biography
Personal Ph.D. Associate Professor, Kenneth Wang school of law, Soochow University, China. Visiting Scholar of St.John’s University Law school, USA Secretary-General of Bankruptcy Law Research Society of Jiangsu Province Expert Advisor of the Suzhou Appellate Court, China Expert Advisor of Wujiang District Government, Suzhou, China Educational & Professional Qualifications Ph.D., Nanjing University school of Law, 2012. JD, Xiangtan University of school of Law,2004. BA, Xiangtan University of school of Law,2001. Working Experience Associate Professor, Soochow University School of Law, China.(since 2013) Senior Scholar, the Bankruptcy Law Research Center of Renmin University, China.(since 2012) Chief Judge of corporation and bankruptcy cases,2nd Division of Suzhou Appellate Court, China.(from 2009 to 2013) Judge, Judicial Committee of Suzhou Appellate Court, China.(from 2006 to 2009) Assistant of judge, Suzhou Appellate Court. (from 2004 to 2006) Research Interest Bankruptcy law, corporation law Teaching Interest Bankruptcy law, corporation law
