The lecture on “Corporate Group Bankruptcy: Intersection of Corporate Law and Bankruptcy Law”held by Nanjing Normal University Law School held successfully on June 19, 2020. The lecture invited Associate Professor HE Dan of the law school of Beijing Normal University as keynote speaker, Judge MAO Jinand Judge LIU Changzheng as panelists. Due to the impact of the epidemic, this event was held online. More than 100 teachers and students participated in this activity.
Professor HE generalized the importance of the company group bankruptcy at first, taking the four types of relationships handled by the corporate law as the access point. And then she emphatically analyzed the relationship between shareholders, companies and creditors, which was particularly concerned by bankruptcy law.
Professor HE said that it was time to consider how to protect the interests of creditors when the shareholders became the companies, which was the first change in the framework of the relationship between shareholders, companies and creditors. In this case, there were three tools for creditors to protect their own interests: the right of revocation, piercing the veil of the company and the principle of equitable subordination.
Then Professor HE expounded，when the second change that companies turned into a group occurred, the complex transfer of property within the group would make it difficult for creditors to protect their interests fully by above-mentioned means. Therefore, the legislators must search for new answers.
One of the possible solutions was the entity merger, in other words, consolidating the related companies’property. Professor HE also explained the development and standards of the entity merger.
Another possible solution was procedurecoordination. Members of the group operate normally as a whole. In this regard, it is ideal when all bankruptcy procedures are judged by the same court.
There are different choices about whether a corporate group should be merged or treated separately when it goes bankrupt in different legislations. In China and the United States court decisions dominate, while in Australia the decision is basically left to the parties. Forthis matter, the relationship between the court decisionand the party autonomy is also worth pondering on.
During the interactive session, Judge Mao commented on the reverse denial of the corporation’spersonality and other regimes that lack of clear legal basis. Judge Liu mainly discussed on frontier issues, such as personal bankruptcy. Students also put questions to Professor HE actively.
At the end of the lecture, Ms. Liang made a brief summary and expressed her special interest in the “procedure coordination”, hoping to have the opportunity to invite Professor HE again. Ms. Liang expressed her sincere thanks to Professor HE, Judge Mao and Judge Liu for their thought-provoking comments, and praisedthe students' high enthusiasm for learning. The lecture came to a close with warm applause, and we all are looking forward to Professor HE’s visiting next time!