A Comparative Study on the Reform of Taiwan Corporation Reorganization--Analyzing Two Prominent Cases Involving Hualon Corp and Procomp Informatics Ltd

• Main Authors: Ying-Huei Chou, 周英惠
• Other Authors: Yihong Hsieh
• Format: Others
• Language: zh-TW
• Published: 2007
• Online Access: http://ndltd.ncl.edu.tw/handle/41839328379487643962

碩士 === 東吳大學 === 法律學系 === 95 === The corporate restructuring system is expected to give some breathing space for a possible rebirth to those financially troubled corporations whose operations have been suspended or on the verge of suspension. While the chapter for corporate organization in Taiwan’s Company Act has been enacted for years, just a few of successful bankruptcy protection examples have been seen on the island. Moreover, such a rehabilitation system has been abused with some ill-intended companies, in the name of bankruptcy protection, having forced their creditors to make a reluctant concession or even having embezzled all of company assets. Without mutual trust between debtors seeking restructuring and creditors looking forward to recovering money owed to them, the local reorganization scheme have failed to yield a significant success. With studying two prominent company reorganization cases here in Taiwan and comparing the local design for corporate bankruptcy protection with its counterparts abroad, the research is aimed at delivering some suggestions in an attempt to improve the local reorganization system and lend a hand to the needy corporations. First of all, the research introduces the Chapter 11 of the Bankruptcy Act of the United States and the Corporation Reorganization Law of Japan (Kaishakoseihou) on which the local corporate restructuring scheme has been modeled, while simultaneously elaborating the local design, for a better understanding of the theme of company reorganization. Furthermore, the research analyses the two recent reorganization applications filed by Hualon Corp and Procomp Informatics Ltd to show critical factors under the local system to make a reorganization case done, including how to win support from its creditors for the debtor’s restructuring plan. The research also tries to figure out how a debt-ridden company is able to meet the requirements under the law to restructure itself to avoid insolvency. For instance, local court rulings indicate the reorganization petitioner’s financial conditions, such as a possibility of being able to break even as well as assign earnings to fulfill its debt obligations after restructuring, should be taken into consideration before courts determine if there is any potential for rehabilitation. In addition, the research looks into whether it is appropriate for the current restructuring system to burden judges alone to preside over a reorganization process as such a process is involved in crucial operational items, including financial and industrial capacity. In the meantime, the research takes a close look at how other professionals, such as lawyers, accountants and stock brokers, can help in a reorganization process. With the local economy developing faster than ever, there is an increasing need for domestic enterprises to have a smooth reorganization process as they encounter financial difficulties. So, the research suggests a petitioner should carry out its restructuring plan in good faith, which should be written into law as an essential element to avoid a failure in reorganization. Without good faith of the petitioner, the court should dismiss its bankruptcy protection application. Apart from appointing a manager to take over the petitioner’s operations and protect its assets during restructuring, the research recommends the court should have an impartial person or persons to supervise the use of the petitioner’s capital. In the research’s humble knowledge, not only a natural person but also a legal entity can serve as an inspector to facilitate a reorganization process. In addition, a special court should be set up as an exclusive body to hear reorganization cases to hand down proper rulings.