Socialist Republic of Vietnam

In order to protect the legal rights and interests of creditors, business debtors and related persons, to determine the responsibilities of business debtors in business bankruptcy, to encourage businesses to be more effective in their operations, and to ensure social order and discipline;

Pursuant to article 84 of the 1992 Constitution of the Socialist Republic of Vietnam;

This Law makes provisions on business bankruptcy.


CHAPTER I

General Provisions

Article 1

This Law shall apply to all forms of business ownership which are established and operated under the laws of the Socialist Republic of Vietnam at the time of bankruptcy.

The Government shall make detailed provisions on the implementation of this Law in respect of businesses which directly provide national defence and security, and important public services.

Article 2

A bankrupt business means a business which still faces financial difficulties or still suffers losses in its operation after it has applied all necessary financial measures and, as a result, loses its ability to repay debts when they fall due.

Article 3

In this Law, the following terms shall have the meanings ascribed to them hereunder:

1. Secured creditor means a creditor holding a security over the property of the debtor for a debt due to him from the debtor.

2. Partly secured creditor means a creditor holding a security over the property of the debtor and the value of the property is less than that of the debt due.

3. Unsecured creditor means a creditor who is not holding a security over the property of the debtor for a debt due to him from the debtor.

4. Legal representative of a business means a person who is vested with the authority by the owner of the business to represent the business before the law.

Article 4

1. The people's courts of provinces and cities under central authority (hereinafter referred to as the court) and the People's Supreme Court shall be the bodies vested with the jurisdiction to hear and declare business bankruptcy.

2. The judgment enforcement office of the department of justice and the general department of civil judgment enforcement and management of the Ministry of Justice shall be the bodies vested with the power to enforce the court sequestration orders or business declaration judgments.

Article 5

The public prosecutions office shall inspect compliance with the law during a business bankruptcy proceeding in accordance with the provisions of the law.

Article 6

Any voluntary conciliation between creditors and business debtors, or any guarantee or re-purchase of debts of the bankrupt business shall be given priority for resolution prior to the court issuing a decision to proceed with a bankruptcy petition.


CHAPTER II

Application for and Court Filing of Bankruptcy Petition

Article 7

1. If, after thirty (30) days from the date of serving an invoice, a debtor has not settled a debt, an unsecured or partly secured creditor shall have the right to file a petition at the court where the debtor's head office is located asking the court to make a sequestration order in respect of the assets of the debtor.

2. A petition for a sequestration order must state clearly the following:

(a) the full name and address of the petitioner;

(b) the name of the business in respect of which the sequestration order is sought, and the address of its head office.

3. The petition must be accompanied by a copy of the invoice and documentary evidence which shows that the business is unable to pay the debt due.

4. The petitioner must pay a deposit for costs in accordance with the provisions of the law.

Article 8

In cases where a business is unable to pay the wages of its employees for three consecutive months, the union representative or a representative of the employees (in cases where there is no union) shall have the right to file a petition at the court where the head office of the business is located asking the court to make a sequestration order in respect of the assets of the business. Having filed the petition, the abovementioned representative shall be deemed to be the creditor in the proceeding and shall be exempted from payment of the deposit.
Article 9

1. In cases where a business is unable to pay its due debts after applying all appropriate measures to overcome financial difficulties and pay such debts, including delaying the payments, the owner or legal representative of the business must file a petition at the court where its head office is located asking the court for a declaration of bankruptcy.

2. The petition must state clearly:

(a) the name of the business and the address of its head office; the full name of the owner or the legal representative of the business;

(b) the unsuccessful measures taken by the business to correct its inability to pay the debts due;

(c) the petition must be accompanied by a statement of affairs containing a list of the creditors and the corresponding amount owed, and the addresses of the creditors; a report on the responsibilities of the directors and the members of the board of management in respect of the business becoming unable to pay its debts; a report on the financial situation of the business for the six months prior to it becoming unable to pay its debts; the annual reports for the two previous financial years, or for the whole duration of the business if the business has been in operation for less than two years; all related accounting files.

3. The petitioner must pay a deposit for costs in accordance with the law.

Article 10

During the hearing of a related proceeding, if the court discovers that a business is in a position of bankruptcy, it shall notify the creditors and the business of the situation so that a petition can be filed with the court for declaration of bankruptcy.

Article 11

The petitioner of a bankruptcy petition to the court must be responsible for the contents of the petition and attached documents and information.

The owner or legal representative of the business and the petitioner have the obligation to provide all necessary evidence and documents as requested by the court during the process of a bankruptcy proceeding and must be responsible for the accuracy of such evidence and documents.

Article 12

The court where the bankruptcy petition is filed must enter each petition in its records and issue the petitioner with a written confirmation of receipt of the petition and attached documents.

Within seven days from the date on which the bankruptcy petition is filed, the court shall, by way of written documents, serve the debtor with a copy of the petition and the related attached documents.

Within ten (10) days from the date of service, the business which is being petitioned against must send to the court a report on its ability to pay the debts outstanding. In cases where the business is unable to pay the debts outstanding, it must send to the court the reports and documents stipulated in points (b) and (c) of clause 2 of article 9 of this Law.

Article 13

Within thirty (30) days from the date on which the bankruptcy petition is filed, the chief justices of the economic courts of the people's courts of provinces and cities under cental authority (hereinafter referred to as the provincial economic court) must consider the petition and the related documents, and where it is considered that there is insufficient evidence to proceed with a hearing for the bankruptcy proceeding, the chief justice will dismiss the petition. The reasons for the decision must be stated clearly and forwarded to the petitioner and debtor. Within a period of fifteen (15) days from the date of receipt of the decision of the chief justice of the provincial economic court, the parties may make an appeal against the decision to the chief justice of the provincial people's court. Within seven days from the date of receipt of the appeal application, the chief justice of the provincial people's court must make one of the following decisions:

1. To affirm the decision of the chief justice of the provincial economic court.

2. To set aside the decision of the chief justice of the provincial economic court and request that the decision be reconsidered.

Within seven days from the date the decision of the chief justice of the provincial people's court is made, the chief justice of the provincial economic court must issue a new decision. This decision must be sent to the chief justice of the provincial people's court and the parties involved. If within fifteen (15) days from receiving the new decision of the chief justice of the economic court the parties involved still wish to lodge further complaints, the chief justice of the provincial people's court must consider the matter and make a decision within seven days. The decision of the chief justice of the provincial people's court shall be final and binding.

Article 14

The costs of a business bankruptcy proceeding shall be determined by the court in accordance with the laws regulating costs of legal proceedings.


CHAPTER III

Resolution Procedures for a Business
Bankruptcy Proceeding

I. Decision to Conduct a Hearing of a Bankruptcy Proceeding

Article 15

If within thirty (30) days from the date of filing of a bankruptcy petition, or within seven days from the pronouncement of the chief justice's decision as stipulated in clause 2 of article 13 of this Law it is considered that there is sufficient evidence, the chief justice of the provincial economic court shall issue a decision to conduct a hearing of the bankruptcy proceeding. The reasons for proceeding with the bankruptcy petition must be stated clearly and the date on which all payments of the business cease to be valid must be fixed. The full name of the judge presiding over the bankruptcy proceeding and the full names of the members of the appointed trustee committee must be stated.

Depending on the nature of each matter, the chief justice of the provincial economic court shall appoint a single judge or a committee of three judges (hereinafter referred to as the judge) and a trustee committee to resolve the bankruptcy proceeding. In cases where there are three judges appointed, one judge shall be appointed as the presiding judge.

The trustee committee shall consist of:

· officers of the provincial economic court;
· enforcement officers of the judgment enforcement office of the Department of Justice;
· a representative of the creditors;
· a representative of the debtor;
· a union representative, or a representative of the workers where there is no union; and
· experts from financial institutions, provincial banks and other specialist branches.

The chairman of the trustee committee shall be an officer of the provincial economic court.

The chief justice of the People's Supreme Court shall stipulate regulations on the activities of the committee of judges; and the Government shall, after reaching an agreement with the People's Supreme Court, make provisions on the organization and operation of the trustee committee.

The decision to proceed with a bankruptcy petition must be published in local newspapers where the head office of the business is located and in daily central newspapers for three consecutive issues.

Article 16

1. The judge shall have the following duties and powers:

(a) to collect all documents and evidence for inclusion in the file of the bankruptcy proceeding;

(b) to supervise and inspect the activities of the members of the trustee committee;

(c) to issue orders for application of temporary emergency measures to protect the debtor's assets for the benefit of the creditors in accordance with the law, where required;

(d) to organize and preside over the meeting of creditors;

(e) to determine the temporary suspension, or suspension of a bankruptcy proceeding;

(f) to declare business bankruptcy.

2. Where breaches of the law are identified during the process of a bankruptcy proceeding, the judge shall forward to the public prosecutions office of the same jurisdiction documents relating to the matter for consideration as to whether a criminal proceeding should be initiated.
3. The judge shall be responsible to the chief justice of the provincial people's court for his action in respect of his duties and power.

Article 17

The trustee committee shall have the following duties and powers:

1. To prepare a list of all assets of the business;

2. To supervise and inspect the management of the assets of the business. Where necessary, the trustee committee has the power to request the judge for application of emergency measures in order to protect the remaining assets of the business;

3. To prepare a list of creditors and the debt amount of each creditor.

The trustee committee shall be responsible to the judge for its implementation of its duties and powers.

Article 18

1. During the resolution process of a bankruptcy proceeding, the directors and the members of the board of management of the business must still be responsible for the trading results of the business. Every business activity of the business shall continue as usual but shall be subject to the supervision and inspection of the judge and the trustee committee.

2. Upon receipt of the court's decision to proceed with a bankruptcy petition, the business against which the petition is lodged shall be prohibited from carrying out the following activities:

(a) to conceal, or dispose of any asset of the business;

(b) to pledge, mortgage, assign, or sell any asset of the business or to discharge secured debts without the written consent from the judge;

(c) to pay any unsecured debt of the business to any creditor.

Any debt which has resulted from the operation of the business after the court's decision to proceed with a bankruptcy proceeding against the business shall be settled in accordance with the provisions of article 23 of this Law;

(d) to discharge debts, or reduce the liabilities of debtors of the business;
(e) to create security over debts which were previously unsecured;

(f) to sell or convert shares, or assign ownership rights of any assets of the business.

Article 19

The assets of a business shall consist of all assets which are owned or managed by the business (in the case of State owned businesses) including:

1. Fixed assets and current assets of the business;

2. Money or assets contributed to the capital of the business, joint venture, or business association with other individuals, businesses or organizations;

3. Money or assets of the business which are currently owed to the business by, or are in the possession of, other individuals, businesses, or organizations;

4. Assets which are currently leased out or lent;

5. All rights to the assets.

The assets of a private business include all assets which belong to the owner of the business and which are not directly used in the operation of the business.

Article 20

Immediately after pronouncing the decision to proceed with the bankruptcy petition, the judge must request the owner or legal representative of the business to prepare resolution proposals and solutions for the restructuring of the business. The time limit for the business to restructure its operation shall be determined at the meeting of creditors but shall not exceed two years from the date on which the creditors agree on a resolution proposal at the meeting of creditors.

The resolution proposal and solutions for the restructuring of the business operation must consist of detailed methods and plans, and a schedule for payment of debts to creditors and salaries to workers.

The resolution proposal and solutions for the restructuring of the business operation must be forwarded to the judge within sixty (60) days from the date on which the judge issues such request. Where there is no resolution proposal at the end of this period, the judge shall make a sequestration order and organize a meeting of creditors to discuss methods of distributing the value of the remaining assets of the business.

Article 21

Within sixty (60) days from the first date of the publication in local and central daily newspapers of the court's decision to proceed with a bankruptcy petition, all creditors must submit to the court notices requesting payment of debts. Such notices must specify clearly the amount of the debt which is payable by the debtor categorized into due and undue debts, and secured and unsecured debts with attached documents and evidence proving the amount of debt owed.

Article 22

Within fifteen (15) days from the date of expiry for submission of notices and proof of debt, the trustee committee shall prepare a list of creditors and the amount of debt owed to each one (hereinafter referred to as list of creditors). This list must specify clearly the amount of money owed to each creditor categorized into secured and unsecured debts, and due and undue debts, and must be publicly posted at the provincial court, and the head office and the branches of the business within ten (10) days. Within this period, creditors and the business which is in debt shall have the right to lodge a complaint in respect of the list of creditors with the judge. The judge shall consider the complaint and, where appropriate, amendments or additions shall be made to the list of creditors. Upon the expiry of this period, the trustee committee shall finalize the list of creditors, and creditors who fail to send notices and proof of debt shall forfeit their rights to participate in the meeting of creditors.

Article 23

The business with debts outstanding shall not be required to pay interest on the debts as from the date on which the court issues an order to stop all payments; all undue debts shall be deemed to be due but the interest calculated up until the actual due date shall not be taken into account.

During a bankruptcy proceeding, new debts which result from the operation of the business and the salaries of workers shall be settled under the supervision of the judge.


II. The Meeting of Creditors

Article 24

The meeting of creditors shall have the following duties and powers:

1. To consider and pass resolution proposals or solutions for the restructuring of the operation of the business;

2. To discuss and propose motions to the judge on the distribution of the remaining assets of the business where there is no resolution proposal, or where a resolution proposal is not passed at the meeting of creditors.

Article 25

The individuals who, or businesses and organizations which, are specified in the list of creditors shall be the members of the meeting of creditors.

A creditor may appoint in writing a proxy to attend the meeting on its behalf. The duly appointed proxy shall have the same rights and obligations as the creditor.

Only unsecured and partly secured creditors have the right to vote at the meeting of creditors.

Union representatives, or representatives of workers in businesses which have no unions shall have the right to attend the meeting of creditors but shall have no rights to vote except in the cases stipulated in article 8 of this Law.

Article 26

Having paid a debt on behalf of the business, the guarantor of the debt shall become an unsecured creditor with the same rights and obligations as other unsecured creditors. The guarantor shall be allowed to participate in the meetings of creditors and shall be entitled to a portion of the value of the remaining assets of the bankrupt business in accordance with a rate equivalent to the amount of debt paid on behalf of the business.

A creditor whose debt has been partly settled by the guarantor of the debt shall have the right to participate in the distribution of the value of the remaining assets of the business in accordance with a rate equivalent to the amount of debt still outstanding.

Article 27

Within thirty (30) days from the date on which the list of creditors is finalized, the judge shall convene and preside over the meeting of creditors. Notice of the meeting must be sent to the members and participants of the meeting no later than fifteen (15) days prior to the commencement of the meeting; and attached to such notice shall be copies of the resolution proposals and solutions for the restructuring of the operation of the business.

Article 28

The owner, or the legal representative of the business must be present at the meeting of creditors in order to present to the participants the resolution proposals and the solutions for the restructuring of the business operation, and to answer any questions raised during the meeting. In cases where the owner, or the legal representative of the business is unable to attend the meeting of creditors for legitimate reasons, a proxy must be appointed in writing. The proxy shall have the same rights and obligations as the owner, or the legal representative of the business. In cases where the owner of a private business dies, his legal successor shall attend the meeting of creditors on his behalf.

Article 29

A meeting of creditors shall only be valid if more than half of the number of creditors representing at least two thirds in value of the unsecured debts are present at the meeting.

Minutes in respect of the accepted resolution proposal and restructuring solution shall only be valid if they are duly passed by more than half of the number of creditors representing at least two thirds in value of the unsecured debts. The minutes must record clearly the matters which have been discussed and must be signed by the judge and the creditors who attended the meeting. On the basis of the minutes of conciliation, the judge shall issue a decision to suspend temporarily the bankruptcy proceeding. All agreements which are recorded in the minutes of conciliation shall be binding on all creditors and the debtor.

Article 30

A meeting of creditors may be adjourned once if:

1. There is less than half of the number of creditors representing at least two thirds in value of unsecured debts present at the meeting;

2. A majority of the creditors present at the meeting vote in favour of the adjournment.

Article 31

1. Within thirty (30) days from the date on which the meeting of creditors is adjourned, the judge must reconvene and preside over the meeting of creditors. Notice of the meeting must be published once in the local newspaper and the daily central newspaper, and must be sent to the members and the participants of the meeting no later than fifteen (15) days prior to the commencement of the meeting. This meeting shall only be valid if more than one half of the number of creditors representing at least two thirds in value of the unsecured debts are present.

The decision to adopt a resolution proposal and the solutions for the restructuring of the operation of the business at this meeting shall only be legally valid if it is duly passed by creditors representing at least two thirds in value of the unsecured debts who are present at the meeting.

All agreements which are recorded in the minutes of conciliation of the meeting shall be binding on all creditors and the business debtor.

2. Where a meeting of creditors is not valid due to the attendance of fewer than the number of creditors as required by clause 1 of this article, the judge shall issue a decision to suspend the bankruptcy proceeding and such decision shall be published in the local newspaper and the daily central newspaper for three consecutive issues.

Article 32

The agenda of the meeting of creditors must be fully recorded in the minutes of the meeting. The minutes of the meeting must be signed by the judge, the court clerk, the owner, or the legal representative of the business, and the creditors present at the meeting.

Article 33

The judge shall pronounce a decision acknowledging the resolution proposal and the solutions for the restructuring of the operation of the business which were passed at the meeting of creditors, and shall suspend temporarily the bankruptcy proceeding. The judge must cause such decision to be published in the local newspaper and the daily central newspaper for three consecutive issues.

Article 34

The owner, or the legal representative of the business must be responsible for the implementation of the proposed methods for restructuring the operation of the business in accordance with the plan and schedule passed at the meeting of creditors.

Creditors shall have the obligation to perform the agreements reached at the meeting of creditors and to supervise the performance of the debtor in respect of such agreements.

Article 35

If, during the restructuring period of the business, good trading results are achieved and the business is able to perform all of its obligations in accordance with the plan adopted at the meeting of creditors, the owner of the business shall have the right to request the judge to suspend the bankruptcy proceeding provided that no creditor has lodged a complaint to the court. The judge shall pronounce a decision to suspend the bankruptcy proceeding and must cause such decision to be published in the local newspaper and the daily central newspaper for three consecutive issues.


III. Declaration of Business Bankruptcy

Article 36

The judge shall make a sequestration order or a declaration of bankruptcy in the following cases:

1. The owner, or the legal representative of the business does not present the court with a resolution proposal and solutions for the restructuring of the operation of the business in accordance with the provisions of article 20 of this Law;

2. The owner, or the legal representative of the business is unable to implement the provisions of article 28 of this Law;

3. The resolution proposal and the solutions for the restructuring of the operation of the business are not passed at the meeting of creditors;

4. Upon expiry of the restructuring period, the business is still trading poorly and the creditors file a petition with the court for a sequestration order against the business;

5. During the restructuring period, the business commits serious breaches of the agreement reached at the meeting of creditors and the creditors file a petition with the court for a sequestration order;

6. During the process of a bankruptcy proceeding, the owner of a private business goes into hiding, dies and his legal successor refuses the inheritance, or dies and there is no legal successor.

Article 37

The sequestration order or the declaration of bankruptcy must contain the following:

1. The name of the court and the full name of the judge presiding over the bankruptcy proceeding;

2. The date and the court filing number of the petition for bankruptcy proceeding;

3. The name and address of the business in respect of which the petition is lodged;

4. The date of pronouncement of the sequestration order or the declaration of bankruptcy;

5. Reasons for the order or the declaration;

6. Proposal for the distribution of the assets of the bankrupt business.

The decision to declare business bankruptcy shall be sent to creditors, the bankrupt business, and the public prosecutions office of the same jurisdiction.

Article 38

During the process of a bankruptcy proceeding, the judge shall order that the pledged or mortgaged property of the business be protected and shall organize the valuation of such property. Where the value of the pledged or mortgaged property is insufficient to pay the debts of secured creditors, such creditors shall be permitted to participate in the distribution of the remaining assets of the bankrupt business together with other unsecured creditors. Where the value of the pledged or mortgaged property is greater than the amount of debt owed to secured creditors, the difference in value shall be deemed to be part of the remaining assets of the bankrupt business.

Article 39

The distribution of the assets of the bankrupt business amongst the creditors shall be carried out in the following order of priority:

1. Fees and costs of the bankruptcy proceeding as determined by the provisions of the law.

2. Unpaid wages, allowances for termination of employment, and social insurance in accordance with the provisions of the law and other rights pursuant to a signed collective or individual labour agreement.

3. Tax liabilities.

4. Payment of debts owed to the creditors whose names appear on the list of creditors:

(a) if the value of the remaining assets of the bankrupt business is sufficient to cover the debts of all creditors, then each creditor shall be paid in full the amount owed to him or her;

(b) if the value of the remaining assets of the bankrupt business is insufficient to cover the debts of all creditors, then each creditor shall be paid a portion of the amount owed in accordance with an appropriate ratio.

5. If the value of the remaining assets of the bankrupt business exceeds the total amount of debts owed to all creditors, then the difference in value shall belong to:

(a) the owner of the business in the case of private businesses;

(b) the members of the company in the case where the business is a company;

(c) the State treasury in the case of State owned businesses.

Article 40

1. Within thirty (30) days from the date of pronouncement of the judgment or order, both the creditors and the business in debt shall have the right to lodge an appeal against the judgment or order, and the public prosecutions office of the same jurisdiction shall have the right to protest against such judgment or order. If this period expires and no appeal or protest has been lodged, the judgment or order of the court shall be final and enforceable.

In cases where there is an appeal from, or protest against the judgment or order of the bankruptcy court, the judge who is responsible for the judgment or order must, within five days from the date of receipt of the appeal or protest, transfer the file of the bankruptcy proceeding to the People's Supreme Court of Appeal.

2. Within sixty (60) days from the date of receipt of the file of the bankruptcy proceeding, a council consisting of three judges appointed by the chief justice of the People's Supreme Court of Appeal must resolve the appeal or protest. The decision of the People's Supreme Court of Appeal shall be final.

Article 41

No later than ten (10) days after the date on which the sequestration order or bankruptcy judgment becomes enforceable, the judge must publish the judgment or order in the local newspaper and the daily central newspaper for three consecutive issues.

The copy of the judgment or order must be forwarded to:

(a) the judgment enforcement office of the Department of Justice;

(b) the creditors and the bankrupt business;

(c) the public prosecutions office, and the financial and labour institutions of the same jurisdiction;

(d) the State body which issued the licence for the establishment of the business.

The copy of the judgment or order sent to the judgment enforcement office must be accompanied by the necessary documents for the execution of such decision.

The judge of the provincial economic court must supervise the transfer of assets and the relevant papers and documents of the business between the trustee committee and the property realization committee.


CHAPTER IV

Execution of the Judgment or Order of the Court

Article 42

1. The execution of the judgment or order of the court in respect of a declaration of business bankruptcy shall be within the jurisdiction of the judgment enforcement office of the Department of Justice where the head office of the bankrupt business is located.

2. The head of the judgment enforcement office shall appoint an enforcement officer who shall be responsible for the implementation of the judgment or order of the court. The office shall also establish a property realization committee, and inspect and supervise the activities of the committee.

3. The property realization committee shall consist of:

(a) enforcement officers or employees of the judgment enforcement office;

(b) representatives of the financial and banking institutions of the same level;

(c) representatives of the creditors, and the union representative or representative of the workers (where there is no union);

(d) representative of the bankrupt business.

The members of the trustee committee may be appointed as members of the property realization committee. The chairman of the property realization committee shall be the enforcement officer of the judgment enforcement office.

The Government shall provide regulations on the organization and operation of the property realization committee.

Article 43

The enforcement officer responsible for the implementation of the judgment or order of the court shall have the following duties and powers:

1. To make a determination on the recovery and auction of the assets of the bankrupt business;

2. To implement the proposal on the distribution of the assets of the business in accordance with the judgment or order of the judge;

3. To freeze all current bank accounts of the bankrupt business; to open new bank accounts to deposit the money received from the recovery of debts owed to the bankrupt business and from the auction of the assets of the bankrupt business.

The enforcement officer shall be responsible to the head of the judgment enforcement office in carrying out his duties and powers.

Article 44

The property realization committee shall have the following duties and powers:

1. To accept any transfer of assets or related documents from the trustee committee;

2. To recover and manage all the assets, documents, and accounting records of the bankrupt business;

3. To identify and make requests to the enforcement officer for the recovery of assets, value of assets, or the difference in value of assets of the bankrupt business which were illegally sold or transferred in accordance with article 45 of this Law. The property realization committee shall recover the abovementioned assets, value of assets, or the difference in accordance with the decision of the enforcement officer;

4. Pursuant to the decision of the enforcement officer, the property realization committee shall organize the auction of the assets of the bankrupt business. Any auction of assets of the business must be notarized by a State notary. Where an asset to be auctioned is a complete equipment, it must be sold as a whole except in cases where it cannot be sold as such, in which case it can be sold as separate items. The realization of the assets and the right to use land of the business by way of an auction must be carried out in accordance with the provisions of the law;

5. To deposit all revenue earned by the business in the newly opened bank account;

6. To carry out payment of debts in accordance with the judgment or order of the judge.

Article 45

1. The enforcement officer shall make a recommendation to the court for the recovery of assets, value of assets, or the difference in value of the assets of the business if, within six months prior to the date a bankruptcy petition was lodged against the business, the business committed the following breaches:

(a) any form of disposition of the assets of the business;

(b) payment of debts not yet due;

(c) termination of rights to claim debts owed to the business, or discharge of the debtors' liabilities;

(d) conversion of unsecured debts into secured debts;

(e) sale of assets of the business for less than their actual value.

2. Prior to recovering the assets or the difference in value of the assets of the bankrupt business, the property realization committee shall have the responsibility of presenting the order of the court to the parties concerned and explaining to them clearly the reasons for the recovery. All disputes relating to the recovery of assets or the difference in value of assets of the business shall be resolved by the court.

Article 46

Within thirty (30) days from the date on which a business is declared bankrupt, the owner of assets leased and lent to the bankrupt business for use in its operation must present to the enforcement officer evidence of ownership and the lease or loan contract in order to retrieve back his property.

In cases where the bankrupt business has paid rent in advance and the term of the lease has not expired, the owner of the assets shall only be able to retrieve his property after he has refunded to the business the amount of prepaid rent which is not yet earned in order for the property realization committee to include the refund as part of the remaining assets of the business.

Article 47

During the implementation process of the sequestration order or judgment on declaration of bankruptcy of the court, the parties concerned shall have the right to lodge a complaint with the head of the judgment enforcement office of the Department of Justice. Within seven days from the date of receipt of the complaint, the head of the judgment enforcement office shall consider and resolve the matter, and notify the complainant. Where the complainant is not satisfied with the decision of the head of the judgment enforcement office of the Department of Justice, he or she shall have the right to lodge a complaint against such decision to the director of the general department of civil judgment enforcement and management of the Ministry of Justice. Within thirty (30) days from the date of receipt of the complaint, the director of the general department of civil judgment enforcement and management shall issue one of the following decisions:

1. to affirm the decision of the head of the judgment enforcement office of the Department of Justice;

2. to set aside the decision of the head of the judgment enforcement office of the Department of Justice and order a review of the matter.

Article 48

Once the payment process is over, the head of the judgment enforcement office shall order the termination of all activities relating to the execution of the judgment or order of the court. This decision must be sent to the State body where the bankrupt business is registered in order for the deletion of the business name from the book of registration.


CHAPTER V

Dealing with Breaches

Article 49

1. Any person who commits the following breaches shall, depending on the seriousness of the breach, be punished administratively, liable for payment of compensation, or criminally prosecuted in accordance with the law:

(a) carrying out any of the prohibited activities stipulated in article 18 of this Law, or engaging in other fraudulent conducts during the process of a bankruptcy proceeding;

(b) use of threats or other forms of coercion to force the business debtor to lodge a bankruptcy petition;

(c) intentionally causing damage to, or destroying the property of the business.

2. Judges, members of the trustee committee, enforcement officers, and members of the property realization committee who breach the provisions of this Law and other provisions of the law during the process of a bankruptcy proceeding shall, depending on the seriousness of the breach, be disciplined or criminally prosecuted in accordance with the law.

Article 50

1. The directors, the chairman, and the members of the board of management of a bankrupt business shall be prohibited from holding similar positions in any other business within one to three years from the date on which the business is declared bankrupt.

2. The provisions of clause 1 of this article shall not apply to the directors, the chairman, and the members of the board of management of a bankrupt business in the following circumstances:

(a) the business is bankrupt due to force majeure as determined by the Government;

(b) the directors, the chairman, and the members of the board of management are not directly responsible for the acts of bankruptcy;

(c) the directors or the chairman of the board of management have voluntarily lodged a bankruptcy petition against the business in accordance with the law and have fully paid the creditors of the business.


CHAPTER VI

Implementing Provisions

Article 51

This Law shall be applicable to bankruptcy proceedings in respect of businesses which involve foreign individuals and organizations except where an international treaty of which the Socialist Republic of Vietnam is a signatory otherwise provides.

Article 52

This Law shall be of full force and effect as of 1 July 1994.

All previous provisions which are inconsistent with this Law are hereby repealed.

The Government, the People's Supreme Court and the public proseuctions office shall make detailed provisions on the implementation of this Law.

This Law was passed by Legislature IX of the National Assembly of the Socialist Republic of Vietnam at its 4th Session on 30 December 1993.


President of the National Assembly



NONG DUC MANH