In case of initiation of bankruptcy process in Vietnam, is the insolvent entity required to make an inventory of the assets?
- In case of initiation of bankruptcy process in Vietnam, is the insolvent entity required to make an inventory of the assets?
- What are the assets of an insolvent enterprise or cooperative in Vietnam?
- After the People’s Court of Vietnam issues an Decision to initiate the bankruptcy process, how will creditors and insolvent entity offset their liabilities?
In case of initiation of bankruptcy process in Vietnam, is the insolvent entity required to make an inventory of the assets?
Pursuant to Clause 2, Article 4 of the Law on Bankruptcy 2014: "Bankruptcy is a legal status of an insolvent entity that is declared bankrupt by the People’s Court."
Pursuant to Clause 1, Article 65 of the Law on Bankruptcy 2014:
Inventory of assets of insolvent entities
1. The insolvent entity must make an inventory of the assets and carry out the asset valuation within 30 days from the receipt of a Decision on initiation of bankruptcy; or send a written request for extension to the Judge if necessary but not more than 2 times, each extension is at most 30 days. The assets of entities shall be valued under the regulations of the law.
2. If the legal representative of an entity is absent, the asset management officer and asset management enterprise shall appoint another representative to make the inventory and carry out the valuation of the assets of such entity.
3. The inventory of assets must be immediately sent to the People’s Court implementing the bankruptcy process.
4. If the inventory and valuation of the assets of any entity prescribed in Clause 1 this Article is incorrect, the People’s Court shall request the asset management officer and asset management enterprise to make an inventory and carry out valuation of part of or all of the assets of the entity. The assets shall be valued according to the market price at the time for inventory.
5. The representative if any entity and other people that do not cooperate in making the inventory of assets or intend to falsify the inventory of assets shall be penalized under the regulations of the law.
The insolvent entity must make an inventory of the assets and carry out the asset valuation within 30 days from the receipt of a Decision on initiation of bankruptcy
If necessary, the insolvent entity may send a written request for extension to the Judge but not more than 2 times.
In case of initiation of bankruptcy process in Vietnam, is the insolvent entity required to make an inventory of the assets? (Image from the Internet)
What are the assets of an insolvent enterprise or cooperative in Vietnam?
Pursuant to Clause 1, Article 64 of the Law on Bankruptcy 2014, assets of an insolvent enterprise or cooperative include:
- Assets and asset ownership of the insolvent entity at the time the People’s Court decide to initiate the bankruptcy process;
- Assets and asset ownership acquired after the People’s Court decide to initiate the bankruptcy process;
- The difference between the value of the collateral and the secured debts that the entity must pay to the creditors of the secured debts;
- Value of land use right of the entity that is determined according to the regulations of the law;
- Dispersed and hidden assets that are confiscated;
- Assets and asset ownership that are confiscated from the invalid deals;
- Other assets under the regulations of the law.
After the People’s Court of Vietnam issues an Decision to initiate the bankruptcy process, how will creditors and insolvent entity offset their liabilities?
Pursuant to Clause 1, Article 63 of the Law on Bankruptcy 2014 stipulates:
Offsetting liabilities
1. After the People’s Court issues an Decision to initiate the bankruptcy process, creditors and insolvent entity may offset their liabilities against those of the creditors provided that such liabilities are derived from the contract concluded before the Decision to initiate the bankruptcy process is issued.
2. That the liabilities shall be offset must comply with the regulations in Clause 1 this Article and approved by the asset management officer and asset management enterprise. The asset management officer and asset management enterprise must report the liabilities offsetting to the Judge.
3. Methods of offsetting liabilities:
a) If the parties have equivalent financial obligations, they do not need to fulfill such obligations to each other and the obligations shall be considered to be ended, unless otherwise prescribed by law;
b) If the financial obligations of the parties are not equivalent and the positive difference belongs to the entity, the party signing the contract with the entity shall pay the value of such difference. The value of such difference shall be included in the assets of the entity.
b) If the financial obligations of the parties are not equivalent and the positive difference belongs to the party signing the contract with the entity, such party shall become a unsecured creditor of such difference.
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After the People’s Court issues an Decision to initiate the bankruptcy process, creditors and insolvent entity may offset their liabilities against those of the creditors provided that such liabilities are derived from the contract concluded before the Decision to initiate the bankruptcy process is issued.
That the liabilities shall be offset must be approved by the asset management officer and asset management enterprise.
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