Are creditors of unsecured debts entitled to submit written requests for initiation of bankruptcy process in Vietnam?

Are creditors of unsecured debts entitled to submit written requests for initiation of bankruptcy process in Vietnam?

Pursuant to Article 5 of the 2014 Bankruptcy Law, there are regulations on eligibility and liability to submit written requests for initiation of bankruptcy process as follows:

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.

Thus, according to the above provisions in Vietnam, the creditor of unsecured debts has right to submit written requests for initiation of bankruptcy process in Vietnam after the expiration of 03 months from the payment due date for the debts which the enterprise or cooperative does not pay.

What are contents of requests of debtors for initiation of bankruptcy process in Vietnam?

According to Article 26 of the Law on Bankruptcy 2014, requests of debtors for initiation of bankruptcy process are as follows:

1. When requesting the People’s Court to initiate bankruptcy process, the creditors mentioned in Clause 1 Article 5 of this Law must make a request for the initiation of bankruptcy process.

2. A request for initiation of bankruptcy process must contain:

a) Date

b) Name of the People’s Court in charge of bankruptcy settlement;

c) Name and address of the requester;

d) Name and address of the enterprise or the cooperative forced to file for bankruptcy;

dd) The due debts

Proof of due debts must be enclosed herewith .

3. When advising on the selection of asset management officers and/or asset management enterprises, the request must contain the name and address of the asset management officers and/or asset management enterprises.

According to this Article, requests of debtors for initiation of bankruptcy process must contain the following contents in Vietnam.

Can insolvent enterprises negotiate with their creditors to withdraw requests for initiation of bankruptcy process in Vietnam?

In Article 37 of the Bankruptcy Law 2014, there is an agreement between the creditors making written requests for initiation of bankruptcy process and an insolvent entity as follows:

1. Within 03 working days from the day on which the People’s Court receives the satisfactory written request for initiation of bankruptcy process, the insolvent entity and creditors may submit a written request to the People’s Court for permission to negotiate withdrawing of request.

The People’s Court shall decide the negotiation duration which is not longer than 20 days from of the receipt of the satisfactory written request for initiation of bankruptcy process.

2. If the parties reach an agreement on withdrawal of the written request for initiation of bankruptcy process, the People’s Court shall dismiss the case.

3. If the parties cannot reach an agreement within the time given, the People’s Court shall request the requester to pay the bankruptcy fee and bankruptcy advance and take the case according to the regulations of this Law.

4. The negotiation of the parties must comply with the regulations of this Article and the Law on bankruptcy;

According to this Article, the insolvent enterprise and the creditor have the right to request in writing to the People's Court for the parties to negotiate withdrawing of request within 3 working days from the day on which the People’s Court receives the satisfactory written request for initiation of bankruptcy process in Vietnam.

Best Regards!