The "Control Model" in Chinese Bankruptcy Reorganisation Law and Practice

Bankruptcy reorganization provides a legal proceeding in which all interested parties are constrained to act as a collective and make decisions on how to deal with the debtor's assets. In order to help the interested parties make an efficient deployment decision, i.e., a decision that maximizes the debtor's overall value, and a distribution decision that distributes the debtor's value in a fair and equitable way,1 bankruptcy reorganization law contains delicately designed decision-making mechanisms. In these mechanisms, there is often one party who takes a controlling role, but is meanwhile supervised and counterbalanced by the other interested parties. This article first analyses the control model of the decision-making mechanism in Chinese bankruptcy law from a Sino-United States comparative perspective, then further explores how it is applied in practice, and finally proposes suggestions for improving the decision-making mechanism provided in Chinese bankruptcy reorganization law and ensuring its application in practice.