Bankruptcy Law

B.
BANKRUPTCY LAW
 Def: An insolvent enterprise or insolvent cooperative is an enterprise or cooperative
having failed to meet the debt liability for 03 months from the deadline of repayment.
 Bankruptcy is a legal status of an insolvent entity that is declared bankruptcy by the
people court. ( 1,2 Article 4- Bankruptcy law)
 Bankruptcy and dissolution ( pha san vs giai the )
Bankruptcy Dissolution
Reasons become insolvency , fail to meet the  company owner decide to

debt liability for 3 months stop the company
operation
Procedure Court procedure Administrative procedure ( by

( only court can make decision BRO decision)
whether the company go bankruptcy
or not)
Consequences of may exist in case if they can fulfill all After the dissolution procedure ,
enterprise debt, they can operate again the company stopped operation
and does not exist any more.
Consequences of suffer restricted liability, they are not Not suffered any restricted liability
manager allowed to open new company wth 3 at all
year/ or not be a manager of other
company.
2. Bankruptcy procedure:
2.1 . Application of bankruptcy procedure:
 Eligibility: ( A5- Bankruptcy law)
 Any creditors of unsecured debt or partly- secured debt ( after 3 months from
deadline of payment. ( K1 )
 Shareholders ( owning > 20% of ordinary shares for at least six months
consecutive months) K5
 Employees, internal trade union ( after 3 months from the day on which the entity
have to pay salaries and other debts to the employees) K2
 The legal representative of each enterprise or cooperative. ( K6 )
 Liability:
 K3: The legal representative of each enterprise or cooperative.
 K4: The owner of any private enterprise, the president of the board directors of
any joint stock company, President of member asemm….
**Competence in bankruptcy procedure of the People’s court:

 district court: ( 1 judge) Enterprise, cooperatives which locate in the district except
special case ( foreign elements, in different district..)
 Provincial court ( 1-3 judges ) : special cases
** Prohibited activities of insolvent entities on initiation of bankruptcy: ( A48)
** Invalid contract ( A59 )
** Open bankruptcy procedure;
 Establish Assets management officer / civil execution authorities
 list of creditors
 list of debtors
 Inventory property: decide the value
 creditor conference.
 business operation restoration
 property liquidation
 declare of bankruptcy
2.2. Creditor’s conference: ( 75-86 )

 Convening and notification of convening creditor’s meeting ( thẩm quyền triệu tập) : The
Judge ( A75 )
 Thành phần tham gia creditor’s conference meeting:
 Right to attend creditor meeting: ( A.77 )

+The creditor whose names are on the list of creditors.
+ The representative of employees, trade union
+ The guarantors having paid the debts of the insolvent entities( are the unsecured
creditor) - người bảo lãnh sau khi trả nợ thay cho doanh nghiệp “ chủ nợ không đảm
bảo"
 Obligation to attend creditor's meeting:

+ the person who submit the written request for the initiation of the bankruptcy process.
+ Representatives of insolvent entities ( or otherized others )
 Assets managements ( A48 )
1.After the decision on the initiation of bankruptcy is made, the insolvent entity is
prohibited from :
 Dispersing and hiding assets
 paying unsecured debt ( except the unsecured debts incurred after the initiation
of bankruptcy process and paid for employee salaries..)
 Renouncing the right over debt claim.
 Making unsecured debt into a secured or partly - secured debt with collateral
which are assets of company.
2.Any invalid transaction in A60.
 Valid requirements for creditor’s meeting: ( A79)
 The creditors attending represent at least 51% of total unsecured debt.
 With the representation of management officers, asset management enterprises
are assigned to deal with the written requests for the initiation of bankruptcy
process.
** Decision of creditor’s meeting: ( c2. A 81 )

→ Thong qua nghi quyet: > ½ of unsecured creditors attend + representatives of at
least 65% of unsecured debts approve .
 Property liquidation order ( A54 )
1. Cost of bankruptcy
2. Employee debt
3. Restoration costs
4. State debt, unsecured debt partly unsecured debts.
→ if not enough, paid in proportion.
2.3. Consequences of bankruptcy:
 The enterprise's name has been deleted from the enterprise registration book
 No exempt any owner of private enterprises, general partner of any partnership from
fulfilling the financial obligation to the creditor. A110
 Restricted liabilities of holding posts after entities are declared bankruptcy within 3 yrs
A130

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B.

 Bankruptcy and dissolution ( pha san vs giai the )

Reasons become insolvency , fail to meet the  company owner decide to

Procedure Court procedure Administrative procedure ( by

**Competence in bankruptcy procedure of the People’s court:

2.2. Creditor’s conference: ( 75-86 )

 Right to attend creditor meeting: ( A.77 )

 Obligation to attend creditor's meeting:

** Decision of creditor’s meeting: ( c2. A 81 )

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