Valid requirements for creditors’ meetings agreeing plans to resume business operations of entities in Vietnam

Valid requirements for creditors’ meetings agreeing plans to resume business operations of entities in Vietnam (Internet image) 

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

1. Valid requirements for creditors’ meetings agreeing plans to resume business operations of entities in Vietnam

According to Article 90 of the Bankruptcy Law 2014, the valid requirements for creditors’ meetings agreeing plans to resume business operations of entities are as follows:

- The creditors attending represent at least 51 % of the total unsecured debts.

The creditors absent from the creditors’ meeting send their written opinions to the Judge before the creditors’ meeting is opened of which their opinions about the agreement or disagreement about the plan to resume the business operation of the entity. Such absent creditors shall be considered to attend the creditors’ meeting.

- The asset management officers, asset management enterprises assigned to deal with the written requests for the initiation of bankruptcy process must attend the creditors’ meetings.

2. Contents and procedures for approving plans to resume business operations in Vietnam

- The Judge shall convene the creditors’ meeting to consider and agree the plan to resume the business operation within 10 working days from the submission of any plan to resume the business operation of a insolvent entity to the creditors’ meeting.

- A creditors' meeting shall be conducted as follows:

+ The appointed Judge shall declare the creditors’ meeting open;

+ The creditors’ meeting shall vote on the appointment of a Secretary made by the asset management officer and asset management enterprise to record the creditors' meeting in writing;

+ The asset management officer and asset management enterprise shall report the absence and presence of the participants in the creditors’ meeting according to the summonses of the People’s Court, reasons for absence and check the IDs of the participants in the creditors’ meeting.

+ The Judge shall report the participants in the creditors’ meeting;

+ The representative of the entity shall present the plan to resume the business operation;

+ The participants in the creditors’ meeting shall express their opinion about the plan to resume the business operation;

+ The creditors’ meeting shall discus an vote on the plan to resume the business operation.

- A creditors’ meeting can be delayed once in case of failing to satisfy the valid requirements. The creditors’ meeting shall be reorganized in accordance with the regulations in Article 90 and Article 91 of the Bankruptcy Law 2014.

- The Resolution of the creditors’ meeting shall be considered to agree the plan to resume the business operation when more than half of the unsecured creditors attend the meeting and representatives of at least 65 of the total unsecured debts vote for.

If the plan to resume the business operation uses the collateral, the time to use the collateral and plan to handle the collateral must be specified and approved by the creditors of such collateral.

- The Resolution of the creditors’ meeting shall apply to every creditors.

- If the creditors’ meeting is not reorganized or the creditors’ meeting cannot pass the Resolution prescribed in Clause 5 Article 91 of the Bankruptcy Law 2014, the People’s Court shall declare the entity bankrupt.

(Article 91 of the Bankruptcy Law 2014)

3. Recognition of Resolutions of creditors’ meetings through plans to resume business operations in Vietnam

According to Article 92 of the Bankruptcy Law 2014, it stipulates the recognition of Resolutions of creditors’ meetings through plans to resume business operations in Vietnam as follows:

- The Judge shall issue a Decision on recognition of the Resolution of the creditors’ meeting through the plan to resume the business operation of an insolvent entity. This Resolution shall apply to every involved entities.

The prohibitions and supervision on the business operation of the entity prescribe din Article 48 and Article 49 of the Bankruptcy Law 2014 shall end from the effective date of this Resolution.

- The People’s Court shall send the Decision on recognition of the Resolution of the creditors’ meeting agreeing the plan to resume the business operation of the insolvent entity, creditors and the People’s Procuracy at the same level within 07 working days from the issuance of such Decision.

Nguyen Ngoc Que Anh

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