Judicial Moderate Intervention in Information Disclosure of Bankruptcy Reorganization Plan Voting in China

Bankruptcy reorganization plays an important role in saving enterprises with reorganization value, fairly repaying creditors and maintaining economic and social stability. The voting of the reorganization plan is the core link of the reorganization process, which is a multi-party game under the condition of high information asymmetry, involving complex interest conflicts. The information disclosure system of the reorganization plan voting is the essential requirement of modern reorganization to balance the interests of debtors and creditors. The 2006 “Enterprise Bankruptcy Law” of China neither stipulates the standard of the information disclosure of the reorganization plan nor the judicial relief of the disclosure dispute. In this situation, there are common problems in the practice of the disclosure of the reorganization plan voting, such as inadequate disclosure, selective disclosure and lagging disclosure. False disclosure, misleading disclosure and refusal to disclose are also common, and judicial relief for information disclosure disputes is absent, resulting in the lack of effective protection of creditors’ right to know, right to vote and right to supervise. The risk of creditors’ interests being infringed is also greatly increased. Facing the practical dilemmas of information disclosure, it is necessary for the “Enterprise Bankruptcy Law” of China to introduce a judicial intervention mechanism to ensure creditors’ informed voting.Based on the consideration of factors such as system fairness and system cost, the “Enterprise Bankruptcy Law” should focus on building a judicial resolution mechanism for disputes over the disclosure of information on reorganization plan voting and embedding information disclosure compliance into the voting and court approval system of reorganization plans on the premise of establishing a mandatory adequate information disclosure system.