Vietnam: "Insolvent" does not mean that the enterprise or cooperative has no assets to repay the debt

Lê Hải

16:10, 23/12/2020

This is a notable content of the Official Dispatch No. 199/TANDTC-PC of the Supreme People’s Court of Vietnam on the announcement of the results of online answers to some problems in bankruptcy settlement.

Specifically, according to Official Dispatch No. 199/TANDTC-PC of the Supreme People’s Court, pursuant to Clause 1 Article 4 of the Law on Bankruptcy of Vietnam, a/an enterprise or cooperative considered as “insolvent” must meet all following conditions:

- There is a specific and clear debt that is recognized, agreed upon by the parties or determined through a legally effective judgment or decision of the Court, judgment of commercial arbitration, or is determined in the decision of the competent authority and the parties have no dispute about this debt.

- Debt that is due for payment.

- Enterprises and cooperatives fail to fulfill their debt payment obligations within 03 months from the payment due date, including 02 cases:

+ Enterprises and cooperatives have no assets to pay debts;

+ Enterprises and cooperatives have assets but do not pay debts.

Thus, "insolvent" does not mean that the enterprise or cooperative has no assets to repay the debt; even though an enterprise or cooperative has assets to repay its debt but fails to fulfill its debt repayment obligation on time to its creditor, it is still considered an "insolvent" enterprise or cooperative.

View more details at the Official Dispatch No. 199/TANDTC-PC of the Supreme People’s Court of Vietnam, issued on December 18, 2020.

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