Who Can Submit for Bankruptcy???

Prestigious law firm in Vietnam in investment consultation, Dragon Law is always available to support any problem relating to dissolution or bankruptcy of the companies.

Under the Law on Bankruptcy 2014, best lawyers in Hanoi at Dragon Law Firm would like to offer some legal matter on the bankruptcy in the enterprises for foreign investors. Any inquiries please feel free to call the legal advice hotline 1900.599.979.

I. Application of Law on Bankruptcy

1. The Law on Bankruptcy is applied to the bankruptcy process of every enterprise and cooperative based in the territory of Vietnam.

2. In case an international agreement to which Vietnam is a signatory contravenes regulations of this Law, such international agreement shall prevail.

II. Interpretation of terms

In this Law, the terms below are construed as follows:

1. An insolvent enterprise or insolvent cooperative is an enterprise or a cooperative having failed to meet the debt liability for 03 months from the deadline for repayment.

2. Bankruptcy is a legal status of an insolvent entity that is declared bankrupt by the People’s Court.

3. A creditor is an individual, an agency or an organization entitled to request the debtors to pay debts. Creditors include creditors of unsecured debts, creditors of partly-secured debts and creditors of secured debts.

4. A creditor of unsecured debts is an individual, an agency or an organization entitled to request the debtor to pay the debts that are not secured against assets of the debtor or a third party.

5. A creditor of secured debts is an individual, an agency or an organization being entitled to request the debtor to pay the debt secured against assets of the debtor or a third party.

6. A creditor of partly-secured debts is an individual, an agency or an organization entitled to request the insolvent entity to pay the debt partly secured against assets of the debtor or a third party whose value is not sufficient to cover the debt.

7. Asset management officer is an individual specialized in management and liquidation of the assets of an insolvent entity during the process of bankruptcy settlement.

8. Asset management enterprise is an enterprise practicing in management and liquidation of the assets of an insolvent entity during the process of bankruptcy settlement.

9. Bankruptcy conductors are judges and executive judges of the People’s Courts; The Chairman of the People’s Procuracy, prosecutors; asset management officers and asset management enterprises; The heads of civil execution authorities, bailiffs.

10. Entities involved in bankruptcy process are creditors; employees; insolvent entities; shareholders; members of cooperatives or cooperatives which are members of cooperative unions; debtors of insolvent entities and other entities having relevant benefits and liabilities during the bankruptcy settlement.

11. Fee for submission of request for initiation of bankruptcy is an amount of money which the applicants for initiation of bankruptcy is required to pay for filing the petition to the People’s Court.

12. Cost of bankruptcy is an amount of money paid for bankruptcy settlement, including the payments for services provided by asset management officers and asset management enterprise, audit, publication and other expenditures according to the regulations of the law.

13. Payment for financial management is an amount of money paid for the bankruptcy settlement services provided by asset management officers and asset management enterprise.

14. Bankruptcy advance is an amount of money decided by the People’s Court in order to make announcement and pay an advance to asset management officers and asset management enterprises.

III. Who can submit for initiation of bankruptcy process?

1. Any creditor of unsecured debts or partly-secured debts is entitled to send a written request for initiation of bankruptcy process after 03 months from the payment due date for the debts which the enterprise or cooperative does not pay..

2. Any employee, internal Trade Union (or the superior Trade Union if the internal Trade Union is not established) is entitled to send a written request for initiation of bankruptcy process after 03 months from the day on which the entity have to pay salaries and other debts to the employees.

3. The legal representative of each enterprise or cooperative is liable to send a written request for initiation of bankruptcy process when the entity is insolvent.

4. The owner of any private enterprise, the President of the Board of Directors of any joint-stock company, President of the Member assembly of any multi-member limited liability company, the owner of any single limited liability company or any general partner of any partnership is liability to submit a written request for initiation of bankruptcy process when the entity is insolvent.

5. Any shareholder or any group of shareholders owning at least 20% of ordinary shares for at least 06 consecutive months is entitled to file a written request for initiation of bankruptcy process when the joint-stock company is insolvent. Any shareholder or any group of shareholders owning less than 20% of ordinary shares for at least 06 consecutive months is entitled to file a written request for initiation of bankruptcy process when the joint-stock company is insolvent if it is mentioned in the company’s charter.

6. Any member of any cooperative or any legal representative of any cooperative which is a member of the cooperative union is entitled to file a written request for initiation of bankruptcy process when the entity is insolvent.

IV. Announcement of insolvency of enterprises or cooperatives

1. Any individual, agency or organization realizing that any enterprise or a cooperative is insolvent is liable to send a written notification to those mentioned in Point III.

2. The notifying entities must ensure the precision of the notification. In case any entity intentionally notifies false information resulting in causing damage to the enterprise or cooperative, the entity must pay the compensation and have the liability for the damage.

V. Who will provide documents, evidences of relevant entities?

1. Any individual, agency or organization keeping documents and evidences related to the bankruptcy case is responsible for providing sufficiently the documents and evidences within 15 days from the receipt of request of creditors, enterprise or cooperative, the People’s Court, the People’s Procuracy, asset management officer or the asset management enterprise.

2. Any individual, agency or organization cannot provide the documents and evidences as prescribed in Point V.1 must provide a written explanation. Any entity not providing the evidences intentionally without legitimate reason shall be punished according to the regulations of the law.

Clients can look at the Article 3-7 of the Law on Bankruptcy 2014 for more consideration or contact to Dragon Law Firm for more help as the below information:

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