Corporate reorganization reform in China: Findings from an empirical study in Zhejiang

• Main Authors: ZHANG, Zinian, TOMASIC, Roman
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2016
• Subjects: Asian Studies
• Online Access: https://ink.library.smu.edu.sg/sol_research/1918; https://ink.library.smu.edu.sg/context/sol_research/article/3870/viewcontent/corporate_reorganization_reform_in_china_findings_from_an_empirical_study_in_zhejiang__1___2_.pdf
• Institution: Singapore Management University

In 2006, China enacted its first rescue-oriented Enterprise Bankruptcy Law with the aim of establishing its corporate rescue culture. But the corporate reorganization procedure that is at the heart of the new bankruptcy law has not been used frequently. It is appropriate to ask why the use of China's new corporate rescue law has been so low. Meanwhile, in the existing corporate reorganizations under the 2006 Law, most debtors were excluded from the reorganization process, so that the Chinese new debtor-in-possession model, which seems to be a desirable control format, was largely shelved. Why so? This article explores these two issues through the use of empirical data collected from Zhejiang, a province with a significantly larger number of reorganizations than most other Chinese provinces.