Do employees who are owed salaries have the right to send a written request for initiation of bankruptcy process in Vietnam?

Do employees who are owed salaries have the right to send a written request for initiation of bankruptcy process in Vietnam?

Pursuant to Article 5 of the Law on Bankruptcy 2014 stipulates 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, the employees have the right to send a written request for initiation of bankruptcy process in Vietnam upon the expiry of 03 months from the day on which the entity have to pay salaries and other debts to the employees. Therefore, if you have only been owed your salary for 2 months, you will not be entitled to send a written request for initiation of bankruptcy process.

If an enterprise has many branches in other provinces, which court has the competence in bankruptcy settlement in Vietnam?

According to Article 8 of the Law on Bankruptcy 2014, competence in bankruptcy settlement of the People’s Court is as follows:

1. The People’s Court of central-affiliated cities and provinces (hereinafter referred to as provincial People’s Court) has the competence in bankruptcy settlement for enterprises and cooperatives registered in the province and for one of the following cases:

a) There are overseas assets or involving entities.

b) The insolvent entity has branches and/or representative offices located in district and/or cities of various provinces;

c) The insolvent entity has real estate in district and/or cities of various provinces;

d) The provincial People’s Court takes the bankruptcy cases under the management of the People’s Court of a district/city of the province due to their complicacy.

2. The district People’s Court has the competence in bankruptcy settlement for enterprises and cooperatives of which the headquarters are located in the district and for the cases not mentioned in Clause 1 of this Article.

3. The Supreme People’s Court shall provide guidance on implementing this Article.

According to this Article, in case an enterprise has many branches in other provinces, the People’s Court of central-affiliated cities and provinces has the competence in bankruptcy settlement for enterprises registration in Vietnam.

What are entitlements of Judges conducting bankruptcy process in Vietnam?

Article 9 of the Law on Bankruptcy 2014 stipulates tasks and entitlements of Judges as follows:

1. Collect and verify documents and evidences related to the request for initiation of bankruptcy process if necessary.

2. Make the Decision on the initiation of bankruptcy process or the refusal to initiate bankruptcy process.

3. Make the Decision on appointing or replacing the asset management officer and/or the asset management enterprise.

4. Supervise the asset management officer and/or asset management enterprise.

5. Decide to conduct an audit of the insolvent entity if necessary.

6. Make the Decision on the liquidation of the assets of the insolvency entity after the Decision on the initiation of bankruptcy process in order to cover the cost of bankruptcy.

7. Take temporary emergency measures according to the regulations of the law.

8. Impose the prohibition against leaving the place on the representative of the insolvent entity and request the competent authorities to escort him/her according to the regulations of the Law.

9. Convene the creditors' meeting.

10. Make the Decision on approving the resolution of the creditors’ meeting on the plan to resume business operation.

11. Make the Decision on suspending bankruptcy process.

12. Make the Decision on the declaration of bankruptcy of the insolvent entity.

13. Impose administrative penalties and/or request competent authorities to impose criminal penalties according to the regulations of the Law.

14. Refer to the bankruptcy settlements for the prior similar cases with the guidance of the Supreme People’s Court.

15. Must dismiss settling bankruptcy in one of the cases prescribed in Clause 1 Article 10 of this Law.

16. Perform other tasks and powers according to the regulations of the Law.

Thus, the judge conducting bankruptcy proceedings has the powers specified above in Vietnam.

Best Regards!