On June 19, 2014, the National Assembly passed the 2014 Bankruptcy Law. This law takes effect from January 1, 2015, replacing the 2004 Bankruptcy Law. The 2014 Bankruptcy Law consists of 14 chapters and 133 articles, featuring many new provisions compared to the 2004 Bankruptcy Law, including three fundamental new points.
Article table of contents
1. Determining Enterprises and Cooperatives Unable to Meet Debt Payments
Criteria for determining enterprises (DN) and cooperatives (HTX) unable to meet debt payments (Clause 1, Article 4 Bankruptcy Law 2014) is "failure to perform payment obligations" rather than "inability to pay."
The time defined is within 3 months from the due date of payment rather than “when a creditor requests,” as stipulated in the Bankruptcy Law 2004.
The new law does not require determining or proving DN and HTX's inability to pay through a financial balance sheet.
The basis for the Court to issue a decision to initiate bankruptcy procedures is having a debt and, at the time the Court issues the decision to initiate bankruptcy procedures, DN and HTX still do not make the payment.
Criteria for inability to pay do not depend on the number of debts, whether many or few, but only on a single debt. The Bankruptcy Law 2014 does not limit the types of debts.
This can be understood as any debt, whether wage debt, tax debt, social insurance debt, contractual debts, with creditors being individuals, agencies, or organizations having the right to request initiating bankruptcy procedures for DN and HTX.
Article 5 Bankruptcy Law 2014 clearly determines the people who have the right and obligation to submit a petition for initiating bankruptcy procedures.
Those who have the right to submit a petition for initiating bankruptcy procedures include: Unsecured creditors, partially secured creditors; employees, grassroots trade unions, superior trade unions directly superior to grassroots trade unions where grassroots trade unions have not yet been established; shareholders or groups of shareholders owning 20% or more of common shares consecutively for at least 6 months, shareholders, or groups of shareholders owning less than 20% of common shares consecutively for at least 6 months if stipulated in the company charter; members of HTX or legal representatives of HTX, members of union HTX.
Those who are obligated to submit a petition for initiating bankruptcy procedures include: Legal representatives of DN, HTX; sole proprietorship owners, chairman of the board of directors of joint-stock companies, chairman of the members' council of limited liability companies with two or more members, owner of single-member limited liability companies, and general partners of partnerships.
2. Asset Managers and Asset Management Enterprises
The Bankruptcy Law 2014 stipulates that individuals and enterprises are allowed to practice asset management and liquidation in the bankruptcy proceedings, including Asset Managers and Asset Management Enterprises.
An Asset Manager is a lawyer, auditor, a person with a bachelor's degree in law, economics, accounting, finance, or banking with over 5 years of experience in their field and is certified to practice as an Asset Manager.
Asset Management Enterprises include: partnerships having at least 2 general partners who are Asset Managers, the general director, or director of the partnership who is an Asset Manager; sole proprietorships with an owner who is an Asset Manager and concurrently the director.
The establishment of the institution of asset management and liquidation by individuals and legal entities is a fundamental change in the Bankruptcy Law 2014. It can be said that the Bankruptcy Law 2014 creates a new profession: the profession of managing and liquidating bankrupt assets by Asset Managers and Asset Management Enterprises.
According to the provisions of Articles 85 and 86 of the Bankruptcy Law 2004, the Court issues a decision declaring DN and HTX bankrupt simultaneously with the decision to terminate the asset liquidation procedures when DN and HTX no longer have assets to execute the asset distribution plan; or the asset distribution plan has been completed.
The Bankruptcy Law 2014 stipulates that when the creditors' meeting is unsuccessful, or according to the resolution of the creditors' meeting, the Court declares DN and HTX bankrupt. The civil judgment enforcement agency will carry out the procedures for enacting the decision to declare DN and HTX bankrupt.
3. Declaring Bankruptcy through Summary Procedures
In cases where the person who submits a petition to initiate bankruptcy procedures, as stipulated in Clauses 3 and 4, Article 5 of Bankruptcy Law 2014, where DN and HTX are unable to meet debt payments and have no money, other assets to pay bankruptcy fees, advance bankruptcy costs, the petition should clearly state the request for the Court to resolve bankruptcy through summary procedures.
The petition to initiate bankruptcy procedures and accompanying documents must conform to Article 28 of the Bankruptcy Law 2014 and provide sufficient evidence proving DN and HTX have no money or other assets to pay bankruptcy fees and advance bankruptcy costs.
For these cases, bankruptcy procedures are processed quickly. Within 30 days from the date the Court notifies participants in the bankruptcy procedures of the Court resolving the bankruptcy through summary procedures, the Court will review and declare DN and HTX bankrupt or continue to resolve according to regular procedures and notify the participants in the bankruptcy procedures.
Reviewing petitions and recommendations under special procedures is also a new procedure that the Bankruptcy Law 2004 did not have.
Regarding the procedure for submitting a petition: Participants in the bankruptcy procedure, the Supreme People’s Procuracy, the People’s Court will issue a decision declaring bankruptcy. Regarding the authority to review petitions: the Chief Justice of the Supreme People’s Court.
Regarding the basis for review: The Court reviews petitions and recommendations under special procedures when there is one of two bases: 1. Serious violations of bankruptcy laws; 2. Discover new facts that can fundamentally alter the content of the bankruptcy declaration decision, unknown to the People’s Court or participants in the bankruptcy procedure when the People’s Court issued the decision.
Source: Doanhnhansaigon.vn
