(a) to ensure maximum recovery of creditor's rights and avoid unnecessary risks in bankruptcy liquidation.

If the creditor is unwilling to restructure the company's debts, even if the debtor enters the bankruptcy liquidation procedure, the relevant treatment process will last for a long time, and it may be more time-consuming and laborious for the creditor to recover the creditor's rights, and it may be difficult to guarantee full recovery as a result. Enterprise debt restructuring can ensure that creditors can recover their claims to the maximum extent and avoid unnecessary risks in bankruptcy liquidation.

(B) corporate debt restructuring can reduce capital occupation and accelerate capital turnover.

For creditors, if the debtor fails to repay the debt on time, the fund will become bad debts. Excessive bad debts will indirectly lead to insufficient liquidity of creditors and slow down the speed of capital turnover. In enterprise debt restructuring, creditors can recover a certain amount of monetary funds or effective non-monetary assets, which can solve the problem of insufficient liquidity caused by creditors' default on payment for goods to a certain extent. On the other hand, revitalizing bad debts has also improved the turnover rate of creditors' funds and enhanced the business ability of enterprises.

Disadvantages of corporate debt restructuring to creditors

(A) corporate debt restructuring will increase the cash flow burden.

Enterprise debt restructuring will bring considerable debt restructuring benefits to debtors and significantly increase the pre-tax profits of enterprises, but these benefits can not actually increase the debtor's operating cash flow. On the other hand, the increased income tax expenditure will actually reduce the debtor's cash flow. Therefore, although corporate debt restructuring can reduce the debtor's book burden, it actually increases the debtor's tax burden and may even lead to worse cash flow.

(B) corporate debt restructuring can not fundamentally reverse the financial difficulties.

The income from corporate debt restructuring is only the accidental income of the debtor, which can only affect the current profit and loss of the enterprise as "non-operating income". The debtor's future development cannot be guaranteed from the company's debt restructuring. Corporate debt restructuring only gives debtors a short respite from financial difficulties, but it can't fundamentally save enterprises.

(C) Corporate debt restructuring will reduce the credit level and aggravate the credit crisis.

Paying debts is the debtor's realistic obligation, and paying debts on time is an important measure of enterprise credit. Enterprise debt restructuring enables debtors to avoid paying off some debts due to financial difficulties and other reasons. Corporate debt restructuring, whether malicious or goodwill, will have a negative impact on the debtor's credit. The decline of the debtor's credit level has a very adverse impact on future financing.

Legal basis: Article 8 of the Enterprise Bankruptcy Law of the People's Republic of China shall submit a bankruptcy application and relevant evidence to the people's court.

The bankruptcy application shall specify the following items:

(a) the basic information of the applicant and the respondent;

(2) the purpose of the application;

(three) the facts and reasons for the application;

(4) Other matters that the people's court deems necessary.

If the debtor applies, it shall also submit to the people's court a statement of property status, a list of debts, a list of creditor's rights, relevant financial and accounting reports, a plan for the placement of employees, the wages of employees and the payment of social insurance premiums.