Dragon Law Firm, famous company in investment, knows that every company always plan to operate their business activities in the good targets. However, it sometimes happens in different ways and company owners want or have to apply for bankruptcy. At that time, what will deal with the financial obligations to others such as labor wages, partner debt, assets … Just easy to take your call to the legal advice hotline of prestigious law firm in Vietnam at 1900.599.979 for more support.
On financial obligations, the best company in debt recovery in Vietnam, Dragon Law will provide to Clients some questions and answers that the company owners maybe raise in the specific cases on dissolution or bankruptcy. Some legal provisions can be considered under the Law on Bankruptcy 2014, namely at he Articles range from 51 to 58.
I. How to Valuate the Financial Obligations?
1. The valuation of financial obligations that an insolvent entity incurs before the People’s Court makes the Decision on the initiation of bankruptcy process shall be carried out when such Decision is issued.
2. The valuation of financial obligations that an insolvent entity incurs after the People’s Court makes the Decision on the initiation of bankruptcy process shall be carried out when the Decision on the declaration of bankruptcy is issued.
3. In case the above financial obligations are not in money, the People’s Court shall valuate the obligations in money.
II. How about Interest on Debts?
1. The interest on the debts shall be charged under the agreement from the issuance of the Decision on initiation of bankruptcy process but the payment for such interest shall be delayed.
2. The interest on any debt arising during the time from the initiation of the bankruptcy process to the declaration of bankruptcy shall be determined according to the agreement under the regulations of the law.
3. From the day of the declaration of bankruptcy of the insolvent entity, the interests on debts are no longer charged.
III. How to Distribute Assets?
1. When the judge gives the Decision on the declaration of bankruptcy, the assets of the insolvent entity shall be redistributed in the following sequence:
a. Cost of bankruptcy
b. The unpaid salaries, severance pay, social insurance and medical insurance to employees, other benefits according to the labor contracts and collective bargaining agreements;
c. Debts incurred after the initiation of bankruptcy which are used for resuming the business operation.
d. Financial obligations to the Government; unsecured debts payable to the creditors on the list of creditors; secured debts which are not paid because the value of collateral is not enough to cover such debts.
2. The remaining amount of the asset value after every payment in Point II.1 has been made shall belong to:
a. Owners of the private enterprises;
b. Owners of the single member limited companies;
c. Members of multi-member limited liability companies , shareholders of the joint-stock companies;
d. Members of the partnerships;
3. If the value of the assets of the insolvent entity is not enough to make the payment in Point II.1, the entities given the same priority shall be paid in proportion to the debt.
IV. How to Handle with Joint Liabilities or Guarantees?
1. If there are many enterprises having joint responsibility to a debt while one or all of the entities are insolvent, the creditor may claim the payment for the debt from any entity according to the regulations of the Law.
2. In case an guarantor is insolvent, the guarantee is handled as follows:
a. The guarantor must fulfill every obligation to the guarantee that arises. If the guarantor does not pay sufficiently in the range of guarantee, the creditor may request the guarantee obtainer to pay the deficiency;
b. If the obligation to the guarantee is not occur yet, the guarantee obtainer must find another measure for guarantee, except the guarantee obtainer has other agreements with the creditor.
3. If the guarantee obtainer or both the guarantor and the guarantee obtainer are insolvent, the guarantor shall take the liability of the guarantee obtainer according to the regulation of the Law.
V. How to Return Rented or Borrowed Assets?
1. Within 10 working days from the receipt of the Decision on declaration of bankruptcy, the owners of the assets rented or borrowed by the insolvent entity must present proof of the ownership, rental contract or borrowing contract to the civil execution authorities in order to take back the assets.
2. If the insolvent entity has paid the rent in advance and the rental period has not ended, the owners shall take back the assets after paying the amount in proportion to the remaining rental period in order for the civil execution authorities to include the amount in the assets of the entity.
3. If the insolvent entity has transferred the rented or borrowed assets to other parties and cannot take back, the owners of the assets may request for compensation for the assets which is considered an unsecured debt.
VI. How to Return Collaterals?
The insolvent entity shall only return the collaterals to the individuals and/or organizations who have transferred the assets to the entity in order to fulfill their obligations to the entity before the People’s Court initiates bankruptcy process in case the individuals and/or organizations have fulfilled their obligations to the entity.
VII. How to Receive the Sold Assets?
If the sellers have sent the goods to the insolvent entity but have not received the payment for such goods and the insolvent entity has not received such goods, the sellers shall take back the goods.. If the insolvent entity has received the goods and cannot return them, the sellers shall be considered the creditors of unsecured debts.
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