Reorganization value must be allocated pursuant to clear rules that determine the order in which different stakeholders’ rights are realized. The absolute priority rule (APR), which prioritizes unsecured creditors over equity holders, has become the foundational rule for distributive order in reorganization. It is grounded in respect for substantive-law entitlements and pre-insolvency interests, and serves to constrain debtors’ self-serving incentives. From the perspective of interest-balancing theory, however, the APR’s one-dimensional pursuit of creditor value maximization tends to convert the relationship between creditors and shareholders into a zero-sum game: strict adherence often results in the complete exclusion or deprivation of shareholder interests. The APR thus weakens the role of shareholders in corporate governance, resource coordination, and the preservation of going-concern value, even though such influence may be a decisive condition for achieving reorganization goals in the context of micro and small enterprises (SMEs). In SMEs reorganizations, the core value sustaining the firm’s survival often lies less in capital than in human resources. Accordingly, reorganization strategies that primarily rely on third-party capital injections frequently fail to maximize operating value. Even where external funding is available, applying the APR rigidly can severely undermine shareholders’ incentives to participate in the reorganization, thereby causing the debtor to lose its core competitiveness and ultimately leading to reorganization failure—contrary to the bankruptcy law’s fundamental objective of rescuing distressed enterprises. Therefore, for SMEs, the APR requires a systematic recalibration. This involves shifting its objective from solely protecting creditors to serving the broader goal of enterprise rescue, and methodologically, replacing the exclusion of shareholders with equity-retention arrangements to incentivize their participation. In this regard, China’s newly released Draft Amendment to the Enterprise Bankruptcy Law (the “Draft”） breaks with the APR’s rigidity for the first time by introducing the expected disposable income standard as a new paradigm for balancing the interests of SMEs shareholders and creditors, with the aim of enhancing the effectiveness of relief and rescue mechanisms for SMEs. The expected disposable income standard and the new value exception are aligned in their pursuit of the institutional interest of rescue: both seek to create room for preserving shareholder interests in order to facilitate value creation consistent with SMEs’ operational logic. Compared with the new value exception—which constrains shareholder new value contributions and entails uncertainty in both commitment and verification—the expected disposable income standard, by structuring repayment around the debtor’s future income stream, better satisfies the proportionality principle of being most conducive to rescue while minimizing impairment to creditor interests. It therefore represents a more rational choice that reconciles fairness with efficiency. To safeguard unsecured creditors’ repayment expectations， on the basis of the Draft， China should further clarify the debtors’ repayment term and the methodology for calculating disposable income. In addition， supporting measures should be established， including reasonable adjustments to account for fluctuations in actual income and incentive-constraint mechanisms for reorganization plan performance, so as to foster a virtuous interaction between debt repayment and corporate rescue.