Review and Improvement of the Rules for the Protection of Secured Creditors in the Compulsory Approval of Bankruptcy Reorganization Plans
The provisions of the Bankruptcy Law on mandatory approval of reorganization plans provide an appropriate protec-tion for secured creditors.However,the existing rules are too abstract to cause disputes in practice.The determination of whether a secured claim has been fully satisfied is based on the value of the secured property.The value shall be firstly pro-duced by agreement among the parties.Or the value shall be assessed with the the"liquidation value"of the secured property at the time the draft reorganization plan is submitted.And the court is permitted to adjust the results of the assessment.Fair compensation shall be limited to the loss of deferred settlement of the secured claim during the period of implementation of the reorganization plan.The rate of compensation should be set with the"quoted market interest rate of the loan"as the bench-mark and shall be adjusted upward by taking into account factors such as the time of deferred settlement and the debtor's cost of reacquiring the secured property.The identification of unimpaired security rights should be based primarily on whether the draft reorganization plan changes the manner in which the claim is to be satisfied without the consent of secured creditors and whether it specifies the compensation for impairment of the value of the encumbered property.
NETL
NSTL
万方数据
