Popular in Course
verified elite notetaker
Popular in Business
This 7 page Document was uploaded by an elite notetaker on Saturday December 19, 2015. The Document belongs to a course at a university taught by a professor in Fall. Since its upload, it has received 8 views.
Reviews for It-Is-Very-Common-That-Debt-May-Occur-In-The-Econo32
Report this Material
What is Karma?
Karma is the currency of StudySoup.
You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!
Date Created: 12/19/15
It is very common that debt may occur in the economic activities between enterprises. However, once the debtor is in a financial difficulty and unable to pay off the debt in time, the remedy left for the creditor shall be very limited. In many cases, the creditor may hesitate whether it shall file a lawsuit to solve the debt issue. The reason is if the failure in payment by the debtor is really caused due to the financial problem, even the creditor wins the lawsuit after long time litigation, the enforcement shall still be a long term process with uncertain result. In extreme cases, the debtor may be filed for bankruptcy if there are many creditors and the asset of the debtor is not sufficient to pay off all debt. Under such circumstances, the business and operation of the debtor may have to be stopped. How to File Bankruptcy In addition, only the debt which falls into one of the following circumstances can be allowed to be swapped for equity: I The contractual debts arising between creditor and debtor during business operations The creditor should have performed all its obligations under the contract which are relating to debt payable by the debtor Furthermore, the performance of the contract by the creditor shall not be in violation of the law and regulation of the State as well as the article of association of the debtor; II Debt confirmed by effective judgments made by the courts; or III Debts listed in reorganization plans approved by the courts or settlement agreements ruled and accepted by the courts during the course of bankruptcy reorganization or settlement The Limitation of the Amount of the Contribution from Debt-for-Equity Swap How to File Bankruptcy In accordance with the Measures, as a special form of contribution, the debt to be swapped for equity shall be deemed as non-monetary contribution, which shall be appraised by certified asset appraisal firm and verified by certified accounting firm according to current corporate law A verification report shall be issued accordingly The contribution amount from debt-for-equity swap shall not exceed the appraised value of the debt The sum of the contribution amount from debt-for-equity swap and other non-monetary property shall not exceed 70% of the debtorâ€™s corporate registered capital Therefore, debt to be swapped for equity shall be limited in terms of its appraised value as well as non-monetary contribution proportion The Registration of Debt-for-Equity Swap If the debtor plans to swap debt for equity, it shall apply to the authority with required documents and submit for registration change in registered capital and paid-up capital The authority, after approval, shall mark debt-for-equity swap in the legal document and make public for such registration information How to File Bankruptcy
Are you sure you want to buy this material for
You're already Subscribed!
Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'