Handling Collateral Assets for Investment
Based on Article 56 of Decree 21/2021/ND-CP (effective from May 15, 2021), the content is stipulated as follows:
In the case of investment into mortgaged assets as stipulated in Article 20 of this Decree resulting in new assets or additional assets due to investment (hereinafter referred to as newly arising assets) which are not part of the mortgaged assets as agreed in the mortgage contract, the settlement is as follows:
a) If the newly arising assets can be separated from the mortgaged assets without losing value or reducing the value of the mortgaged assets compared to the value of those assets before the investment, the handling of the assets does not include the newly arising assets, and these portions of assets will be returned by the mortgagee to the investor;
b) If the newly arising assets cannot be separated as stipulated in point a of this clause, the assets will be handled including the newly arising assets, and the investor will be paid the value of these assets by the mortgagee.
In the case that newly arising assets continue to be used for the mortgage while also used to secure the performance of another obligation, the regulations on one asset being used to secure multiple obligations shall apply.
In the case that newly arising assets are not used to continue the mortgage but are used to secure the performance of another obligation, the settlement is as follows:
a) If the newly arising assets can be separated from the mortgaged assets without losing value or reducing the value of the mortgaged assets compared to the value of those assets before the investment, the new secured party has the right to separate the portion of assets that they receive as security;
b) If the newly arising assets cannot be separated as stipulated in point a of this clause, the assets will be handled according to the provisions at point b clause 1 of this Article. The value of newly arising assets will be paid by the mortgagee to the other secured party.
The mortgagee shall be compensated for damages as stipulated in clause 4 Article 20 of this Decree from the proceeds obtained from the handling of the mortgaged assets.
The handling of secured assets invested under another security measure in the absence of a different agreement by the parties or unrelated legal provisions shall apply clauses 1, 2, 3, and 4 of this Article.
Respectfully!
