Cases of suspension of plans to resume business operations in Vietnam

Cases of suspension of plans to resume business operations in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Cases of suspension of plans to resume business operations in Vietnam

Specifically, according to Clause 1, Article 95 of the Law on Bankruptcy 2019, the Judge shall issue a Decision on suspension of the plan to resume the business operation of an insolvent entity if:

- the entity has completely executed the plan to resume the business operation;

- or the entity cannot execute the plan to resume the business operation;

- or the entity is still insolvent after the deadline for the execution of the plan to resume the business operation.

2. Regulations on supervising execution of plans to resume business operations in Vietnam

Pursuant to Article 93 of the Law on Bankruptcy 2019, the supervising execution of plans to resume business operations is as follows:

- After the Judge issues the Decision on recognition of the Resolution of the creditors’ meeting agreeing the plan to resume the business operation of an insolvent entity, the asset management officer, asset management enterprise and creditors shall supervise the business operation of such entity.

- The entity must send biannual reports on the execution of its plan to resume the business operation to the asset management officer and asset management enterprise. The asset management officer, asset management enterprise shall notify the Judge and the creditors.

3. Regulations on adjustment to plans to resume business operations in Vietnam

According to Article 94 of the Law on Bankruptcy 2019, adjustment to plans to resume business operations is as follows:

- During the execution of any plan to resume the business operation, the creditors can negotiate with the entity about the adjustment to such plan.

- The agreement on the adjustment to the plan to resume the business operation of an entity shall be concluded when more than half of the unsecured creditors attending and representing at least 65% of the total unsecured debts vote for it.

- The asset management officer and asset management enterprise shall send the Judge a written request for the issuance of the Decision on recognition of agreement on the adjustment to the business operation of the entity.

The Decision on recognition of agreement on the adjustment to the business operation of the entity shall be sent to the insolvent entity and creditors within 07 working days from the issuance of such Decision.

4. Legal consequences of suspension of plans to resume business operations in Vietnam

Legal consequences of suspension of plans to resume business operations are specified in Article 96 of the Law on Bankruptcy 2019 as follows:

- Regarding the case prescribed in Point a Clause 1 Article 95 of the Law on Bankruptcy 2019, the entity shall be considered solvent.

The Judge in charge of handling the request for initiation of bankruptcy process shall give a written notification of the end of the rights and obligations of the asset management officer and asset management enterprise.

- Regarding any case prescribed in Point b or Point c Clause 1 Article 95 of the Law on Bankruptcy 2019, the Judge shall issue a Decision on declaration of bankruptcy to the entity.

Ho Quoc Tuan

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