Abstract The pre‐reorganisation system is an innovative corporate rescue mechanism that integrates and builds upon out‐of‐court restructuring and in‐court bankruptcy reorganisation. It combines the dual advantages of both approaches and has been widely applied. As China actively promotes the establishment of an “open, transparent, standardised, and efficient market exit mechanism,” numerous local courts are exploring the pre‐reorganisation system. This article uses diverse research methods—including text mining, empirical analysis and questionnaire surveys—to investigate its judicial practice. The findings show that: government and court dominance in pre‐reorganisation is inevitable; initiation procedures are inappropriate and deviate from the system's original design; the system's positioning is misaligned, potentially causing case delays; and rule design is disordered with low accessibility, leading to unsatisfactory outcomes. The study proposes, firstly, to redefine the boundaries of administrative power, judicial power and market power in pre‐reorganisation, to establish a tripartite interaction model scharacterised by administrative complementarity, judicial guidance and market dominance, thereby correcting the excessive involvement of non‐market forces. Secondly, it suggests managing the out‐of‐court restructuring at the source (i.e., the front end) of the pre‐reorganisation process. Thirdly, it aims to grasp the dimensions of judicial efficacy and public governance in the application of pre‐reorganisation procedures, ensuring their correct implementation. Lastly, it seeks to construct a multiparty interest coordination mechanism that promotes benign collaboration and to improve safeguard mechanisms to ensure the smooth completion of the pre‐reorganisation process and its effective connection with subsequent stages, such as liquidation and sreorganisation. This research constructs a diversified, multilevel rescue mechanism that is balanced, unified and efficient, providing a new case for international comparative studies and a new direction for China's spre‐reorganisation rules.
Yu-xia et al. (Wed,) studied this question.