Law on Bankruptcy No. 21/2004/QH11

LAW

Bankruptcy

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Pursuant to the Constitution of the Socialist Republic of Vietnam in 1992, amended and supplemented by Resolution No. 51/2001/QH10 dated December 25, 2001 of the National Assembly, tenth session;

This Law stipulates bankruptcy for enterprises and cooperatives.

PART I
GENERAL PROVISIONS

Article 1Scope of Application

This Law stipulates conditions and procedures for filing a petition to initiate bankruptcy proceedings; determining asset obligations and measures to secure assets during bankruptcy proceedings; conditions and procedures for business recovery, asset liquidation, and declaring bankruptcy; rights, obligations, and responsibilities of the petitioner initiating bankruptcy proceedings, of the enterprise or cooperative subject to declaration of bankruptcy, and of participants in resolving the declaration of bankruptcy.

Article 2. Applicability

1. This Law applies to enterprises, cooperatives, and cooperative unions (cooperatives and cooperative unions collectively referred to as cooperatives) established and operating in accordance with the provisions of the law.

2. The Government shall specify the list and application of this Law to special enterprises directly serving national defense and security; enterprises and cooperatives operating in the financial, banking, insurance sectors, and other sectors frequently providing essential public goods and services.

Article 3. Enterprises and cooperatives enter into a state of bankruptcy

An enterprise or cooperative is considered to have entered a state of bankruptcy when it lacks the ability to pay its due debts upon demand by creditors.

Article 4. Effectiveness of the Bankruptcy Law

1. The Bankruptcy Law and other relevant laws shall be applied in resolving bankruptcy for enterprises and cooperatives operating on the territory of the Socialist Republic of Vietnam, except where international treaties to which the Socialist Republic of Vietnam is a party provide otherwise.

2. In cases where there is a discrepancy between the provisions of the Bankruptcy Law and those of another law concerning the same issue, the provisions of the Bankruptcy Law shall apply.

Article 5Bankruptcy proceedings

1. Bankruptcy proceedings are applied to enterprises and cooperatives that have entered a state of bankruptcy, including:

a) Filing a petition and initiating bankruptcy proceedings;

b) Business recovery;

c) Asset liquidation and debt settlement;

d) Declaring the enterprise or cooperative bankrupt.

2. After issuing a decision to initiate bankruptcy proceedings, based on specific provisions of this Law, the Judge decides to apply either the business recovery procedure or the asset liquidation and debt settlement procedure set forth in points b and c of Clause 1 of this Article, or to switch from applying the business recovery procedure to the asset liquidation and debt settlement procedure or declaring the enterprise or cooperative bankrupt.

Article 6. Definitions

In this Law, the following terms shall be understood as follows:

1. Secured creditor is a creditor whose debt is secured by the assets of the enterprise or cooperative or by the assets of a third party.

2. Partially secured creditor is a creditor whose debt is partially secured by the assets of the enterprise or cooperative or by the assets of a third party, where the value of the securing assets is less than the amount of the debt.

3. Unsecured creditor is a creditor whose debt is not secured by the assets of the enterprise or cooperative or by the assets of a third party.

4. Legal representative of the enterprise or cooperative includes the legal representative and the authorized representative.

5. Bilateral contract is a contract in which both parties have rights and obligations; the right of one party is the obligation of the other party and vice versa.

, Clause 1, Clause 2 Article 7a of this Regulation.Authority of the Court

1. People's Courts at district, city district, town, and provincial city level (hereinafter referred to as People's Courts at district level) have jurisdiction to conduct bankruptcy proceedings for cooperatives registered for business at the district-level registration authority.

2. People's Courts at provincial and centrally-administered city level (hereinafter referred to as People's Courts at provincial level) have jurisdiction to conduct bankruptcy proceedings for enterprises and cooperatives registered for business at the provincial-level registration authority.

In necessary cases, People's Courts at provincial level may take over to conduct bankruptcy proceedings for cooperatives under the jurisdiction of People's Courts at district level.

3. People's Courts at provincial level where foreign-invested enterprises are headquartered have jurisdiction to conduct bankruptcy proceedings for such enterprises.

Article 8Duties and powers of the Judge conducting bankruptcy proceedings

1. Conducting bankruptcy proceedings at People's Courts at district level is handled by one Judge, while at People's Courts at provincial level, it is handled by one Judge or a Panel of Judges consisting of three Judges.

2. In case a Panel of Judges handles the bankruptcy proceedings, one Judge is appointed as the Panel Chair.

Rules of operation of the Panel of Judges are prescribed by the President of the Supreme People's Court.

3. The Judge or Panel of Judges (hereinafter referred to as the Judge) has the duty and power to supervise and conduct bankruptcy proceedings. During the course of conducting bankruptcy proceedings, if signs of criminal offenses are discovered, the Judge provides copies of relevant materials to the People's Procuracy at the same level for consideration of criminal prosecution, while continuing to conduct bankruptcy proceedings in accordance with this Law.

4. The Judge is responsible before the Chief Judge and the law for performing their duties and exercising their powers.

Article 9Management and asset liquidation team

1. Simultaneously with issuing a decision to initiate bankruptcy proceedings, the Judge issues a decision to establish a management and asset liquidation team to perform the tasks of managing and liquidating the assets of enterprises and cooperatives in a state of bankruptcy.

2. Members of the management and asset liquidation team include:

a) One enforcement officer from the same-level enforcement agency as Team Leader;

b) One court staff member;

c) One creditor representative;

d) A legal representative of the enterprise or cooperative subject to initiation of bankruptcy proceedings;

e) If necessary, representatives of trade unions, workers, and relevant specialized agencies participating in the management and asset liquidation team shall be considered and decided by the Judge.

3. Based on the provisions of this Law, the Civil Enforcement Law, and other relevant laws, the Government shall promulgate regulations on the organization and operation of the management and asset liquidation team after reaching consensus with the Supreme People's Court.

Article 10Duties, powers, and responsibilities of the management and asset liquidation team

1. The management and asset liquidation team has the following duties, powers, and responsibilities:

a) Preparing a comprehensive inventory of current assets of the enterprise or cooperative;

b) Supervising and inspecting the use of assets of the enterprise or cooperative;

c) Propose the Judge to issue a decision on applying provisional emergency measures to secure the assets of the enterprise or cooperative when necessary;

d) Compile a list of creditors and the amounts owed to each creditor; debtors and the amounts owed by the enterprise or cooperative;

đ) Retrieve and manage the assets, documents, accounting books, and seals of the enterprise or cooperative subject to liquidation procedures;

e) Implement the asset distribution plan according to the Judge's decision;

g) Detect and propose the Judge to issue a decision to recover the assets, value of assets, or the difference in asset value of the enterprise or cooperative subject to liquidation that have been illegally sold or transferred as provided for in Clause 1 of Article 43 of this Law;

h) Enforce the Judge's decision regarding the auction sale of the assets of the enterprise or cooperative subject to liquidation in accordance with the laws on auction sales;

i) Deposit the amounts received from debtors and from the auction sale of the assets of the enterprise or cooperative into an account opened at a bank;

k) Enforce other decisions of the Judge during the process of bankruptcy proceedings;

2. The asset management and liquidation team shall perform the tasks and powers stipulated in Points đ, e, g, h, and k of Clause 1 of this Article in accordance with the laws on civil enforcement, other relevant laws, and shall be responsible under the law for performing their duties and powers;

Article 11. Tasks, powers, and responsibilities of the head of the asset management and liquidation team

1. The head of the asset management and liquidation team has the following tasks and powers:

a) Direct the asset management and liquidation team to perform the tasks and powers stipulated in Article 10 of this Law;

b) Open a bank account to deposit the amounts received from debtors and from the auction sale of the assets of the enterprise or cooperative subject to liquidation when necessary;

c) Organize the enforcement of the Judge's decisions;

2. The head of the asset management and liquidation team shall be responsible under the law for performing their duties and powers;

Article 12. Supervision of compliance with the law during the process of bankruptcy proceedings

The People's Procuracy supervises compliance with the law during the process of bankruptcy proceedings in accordance with this Law and the Law on the Organization of the People's Procuracy;

PART II
SUBMITTING PETITIONS AND HANDLING PETITIONS TO OPEN BANKRUPTCY PROCEEDINGS

Article 13. Rights of creditors to submit petitions to open bankruptcy proceedings

1. When recognizing that an enterprise or cooperative is in a state of bankruptcy, creditors without security or with partial security have the right to submit a petition to open bankruptcy proceedings against such enterprise or cooperative;

2. A petition to open bankruptcy proceedings must include the following main contents:

a) Date of submission;

b) Name and address of the petitioner;

c) Name and address of the enterprise or cooperative in a state of bankruptcy;

d) Unsecured or partially secured debts due but not paid by the enterprise or cooperative;

đ) Debt collection process;

e) Basis for requesting the opening of bankruptcy proceedings;

3. A petition to open bankruptcy proceedings must be submitted to the court with jurisdiction as prescribed in Article 7 of this Law;

Article 14. Rights of workers to submit petitions to open bankruptcy proceedings

1. In cases where an enterprise or cooperative fails to pay wages and other debts to workers and recognizes that the enterprise or cooperative is in a state of bankruptcy, workers may elect representatives or through the trade union representative to submit a petition to open bankruptcy proceedings against such enterprise or cooperative;

Representatives elected legally by workers must be approved by more than half of the workers in the enterprise or cooperative through secret ballot or signature; for large-scale enterprises or cooperatives with multiple branches, legally elected representatives must be approved by more than half of the representatives elected from the branches;

2. A petition to open bankruptcy proceedings must include the following main contents:

a) Date of submission;

b) Name and address of the petitioner;

c) Name and address of the enterprise or cooperative in a state of bankruptcy;

d) Number of months of unpaid wages, total amount of wages and other debts that the enterprise or cooperative has failed to pay to workers;

đ) Basis for requesting the opening of bankruptcy proceedings;

3. A petition to open bankruptcy proceedings must be submitted to the court with jurisdiction as prescribed in Article 7 of this Law;

4. After submitting the petition, the worker's representative or trade union representative shall be considered a creditor;

Article 15. Obligation of enterprises or cooperatives in a state of bankruptcy to submit petitions to open bankruptcy proceedings

1. When recognizing that an enterprise or cooperative is in a state of bankruptcy, the business owner or the legal representative of the enterprise or cooperative has the obligation to submit a petition to open bankruptcy proceedings against such enterprise or cooperative;

2. A petition to open bankruptcy proceedings must include the following main contents:

a) Date of submission;

b) Name and address of the enterprise or cooperative;

c) Basis for requesting the opening of bankruptcy proceedings;

3. A petition to open bankruptcy proceedings must be submitted to the court with jurisdiction as prescribed in Article 7 of this Law;

4. The following documents and materials must be attached to the petition to open bankruptcy proceedings:

a) Report on the business operation status of the enterprise or cooperative, explaining the reasons and circumstances related to the inability to pay debts; if the enterprise is a joint-stock company required by law to be audited, the financial report must be confirmed by an independent auditing organization;

b) Report on the measures taken by the enterprise or cooperative but still unable to overcome the inability to pay due debts;

c) Detailed inventory of the assets of the enterprise or cooperative and the location of visible assets;

d) List of creditors of the enterprise or cooperative, including the name and address of each creditor; the bank where the creditor has an account; secured and unsecured debts due; secured and unsecured debts not yet due;

đ) List of debtors of the enterprise or cooperative, including the name and address of each debtor; the bank where they have an account; secured and unsecured debts due; secured and unsecured debts not yet due;

e) List of members, if the indebted enterprise is a joint-stock company with joint liability for the debts of the enterprise;

g) Other documents requested by the court for the enterprise or cooperative to provide in accordance with the law.

5. Within three months from the date of recognizing that a business or cooperative has entered into bankruptcy, if the business owner or the legitimate representative of the business or cooperative does not file a petition to initiate bankruptcy proceedings, they shall be held responsible in accordance with the provisions of the law.

Article 16. The right of the state enterprise owner to submit a petition to initiate bankruptcy proceedings

1. When recognizing that a state-owned enterprise has entered into bankruptcy and the enterprise fails to fulfill its obligation to file a petition to initiate bankruptcy proceedings, the representative of the enterprise owner has the right to submit a petition to initiate bankruptcy proceedings against such enterprise.

2. The petition to initiate bankruptcy proceedings and accompanying documents must be carried out in accordance with the provisions of Article 15 of this Law.

Article 17The right of shareholders of joint-stock companies to submit a petition to initiate bankruptcy proceedings

1. When recognizing that a joint-stock company has entered into bankruptcy, shareholders or a group of shareholders have the right to submit a petition to initiate bankruptcy proceedings in accordance with the company's articles of association; if the articles of association do not provide for this, the filing shall be made according to the resolution of the general meeting of shareholders. In cases where the articles of association do not provide for this and a general meeting of shareholders cannot be convened, shareholders or a group of shareholders holding more than 20% of the ordinary shares continuously for at least six months have the right to submit a petition to initiate bankruptcy proceedings against the joint-stock company.

2. The petition to initiate bankruptcy proceedings and accompanying documents must be carried out in accordance with the provisions of Article 15 of this Law, except for the documents and materials specified in points d, đ and e of Clause 4 of Article 15 of this Law.

Article 18The right of a limited partner to submit a petition to initiate bankruptcy proceedings

1. When recognizing that a partnership has entered into bankruptcy, a limited partner has the right to submit a petition to initiate bankruptcy proceedings against such partnership.

2. The petition to initiate bankruptcy proceedings and accompanying documents must be carried out in accordance with the provisions of Article 15 of this Law.

Article 19. Obligations and responsibilities of the person submitting a petition to initiate bankruptcy proceedings

1. The person submitting a petition to initiate bankruptcy proceedings as stipulated in Articles 13, 14, 15, 16, 17 and 18 of this Law shall have the obligation to provide complete and timely documents as prescribed by law and upon request of the Court during the process of initiating bankruptcy proceedings.

2. If the person submitting a petition to initiate bankruptcy proceedings causes adverse effects on the reputation, credibility, and business operations of the business or cooperative due to lack of objectivity, or engages in fraud in requesting the initiation of bankruptcy proceedings, they shall be subject to disciplinary action, administrative penalties, or criminal liability depending on the nature and severity of the offense; if damage is caused, compensation shall be provided in accordance with the provisions of the law.

Article 20Notification of businesses or cooperatives entering into bankruptcy

1. While performing their functions and duties, if recognizing that a business or cooperative has entered into bankruptcy, the Court, the Prosecution Office, the inspection agency, the capital management agency, the auditing organization, or the agency deciding to establish the business which is not the state owner of the business shall have the duty to notify in writing those persons who have the right to submit a petition to initiate bankruptcy proceedings so that they may consider filing such a petition.

2. The notifying agency shall be responsible for the accuracy of the notification.

Article 21Bankruptcy fees and advance payment of bankruptcy fees

1. Bankruptcy fees are used to conduct bankruptcy proceedings. The Court decides on the payment of bankruptcy fees in each specific case in accordance with the provisions of the law on fees and charges.

2. The person submitting a petition to initiate bankruptcy proceedings must pay the advance payment of bankruptcy fees as decided by the Court, except in cases where the person submitting the petition is a worker as stipulated in Article 14 of this Law.

3. Bankruptcy fees prepaid by the state budget in the following cases:

a) The person submitting a petition to initiate bankruptcy proceedings falls under the category exempted from paying advance payment of bankruptcy fees;

b) The person submitting a petition to initiate bankruptcy proceedings must pay advance payment of bankruptcy fees but lacks funds to do so, but has other assets.

Bankruptcy fees prepaid by the state budget shall be repaid to the state budget from the assets of the business or cooperative entering into bankruptcy.

Article 22Acceptance of petitions to initiate bankruptcy proceedings

1. After receiving a petition to initiate bankruptcy proceedings, if the Court finds it necessary to amend the petition or supplement documents, it shall require the petitioner to make amendments or supplements within ten days from the date of receipt of the Court's request.

2. The Court accepts a petition to initiate bankruptcy proceedings from the date the petitioner presents the receipt of advance payment of bankruptcy fees. In cases where the petitioner is exempted from paying advance payment of bankruptcy fees, the acceptance date is the date the Court receives the petition. The Court must issue a notice of acceptance to the petitioner.

Article 23. Notification of acceptance of petitions to initiate bankruptcy proceedings

1. In cases where the petitioner is not the business owner or the legitimate representative of the business or cooperative entering into bankruptcy, the Court must notify the business or cooperative of this fact within five days from the date of accepting the petition.

2. Within fifteen days from the date of receiving the Court's notification, the business or cooperative must present to the Court the documents and materials specified in Clause 4 of Article 15 of this Law; if the business or cooperative entering into bankruptcy is a guarantor for another party, within five days from the date of receiving the Court's notification, the business or cooperative must inform the relevant parties of the fact that it has been requested to initiate bankruptcy proceedings.

"d) Within no more than one working day from the date of receiving the dossier submitted for administrative procedures by the specialized agency assigned by the Provincial People's Committee, the Chairman of the Provincial People's Committee shall issue a notification of the result of the inspection of plant-based food exports or a certificate at the request of the importing country."Returning petitions to initiate bankruptcy proceedings

The Court issues a decision to return petitions to initiate bankruptcy proceedings in the following cases:

1. The petitioner does not pay the advance payment of bankruptcy fees within the time limit set by the Court;

2. The petitioner does not have the right to submit a petition;

3. Another Court has already initiated bankruptcy proceedings against the business or cooperative entering into bankruptcy;

4. There is clear evidence that the submission of a petition to initiate bankruptcy proceedings was due to lack of objectivity, causing adverse effects on the reputation, credibility, and business operations of the business or cooperative, or there was fraud in requesting the initiation of bankruptcy proceedings;

5. The business or cooperative proves that it has not entered into bankruptcy.

Article 25Complaint regarding the return of the petition to initiate bankruptcy proceedings

1. Within ten days from the date of receiving the court's decision returning the petition to initiate bankruptcy proceedings, the petitioner has the right to lodge a complaint with the Chief Judge of that court.

2. Within seven days from the date of receiving the complaint against the decision returning the petition to initiate bankruptcy proceedings, the Chief Judge of the court must issue one of the following decisions:

a) Maintain the decision returning the petition to initiate bankruptcy proceedings;

b) Revoke the decision returning the petition to initiate bankruptcy proceedings and accept the petition in accordance with this Law.

Article 26Transfer of bankruptcy resolution to another court; resolution of jurisdiction disputes

1. After accepting the petition to initiate bankruptcy proceedings, if the court finds that the resolution of bankruptcy does not fall within its jurisdiction, it shall transfer the matter to the court with jurisdiction and notify the petitioner of the initiation of bankruptcy proceedings.

2. Disputes over jurisdiction among district courts in the same province shall be resolved by the Chief Judge of the provincial people's court.

Disputes over jurisdiction among district courts in different provinces or between provincial people's courts shall be resolved by the Chief Judge of the Supreme People's Court.

Article 27Suspension of the resolution of claims against enterprises and cooperatives entering bankruptcy

From the date the court accepts the petition to initiate bankruptcy proceedings, the resolution of the following claims against enterprises and cooperatives entering bankruptcy to fulfill their financial obligations must be temporarily suspended:

1. Execution of civil judgments involving assets where the enterprise or cooperative is the debtor;

2. Resolution of cases demanding enterprises and cooperatives to fulfill their financial obligations;

3. Disposal of collateral assets of enterprises and cooperatives for secured creditors, except in cases permitted by the court.

Article 28. Decision to open or not open bankruptcy proceedings

1. Within thirty days from the date of accepting the petition to initiate bankruptcy proceedings, the court must issue a decision to open or not open bankruptcy proceedings.

2. The court issues a decision to open bankruptcy proceedings when there are grounds proving that the enterprise or cooperative is in a state of bankruptcy. In necessary cases, before issuing the decision to open bankruptcy proceedings, the court may convene a hearing with the participation of the petitioner requesting the initiation of bankruptcy proceedings, the business owner or the lawful representative of the enterprise or cooperative requested to initiate bankruptcy proceedings, and related individuals or organizations to examine and verify the grounds proving that the enterprise or cooperative is in a state of bankruptcy.

3. The decision to open bankruptcy proceedings must include the following main contents:

a) Date of issuance of the decision;

b) Name of the court; name and surname of the judge responsible for conducting the bankruptcy proceedings;

c) Date and case number of acceptance of the petition to initiate bankruptcy proceedings; name and address of the petitioner;

d) Name and address of the enterprise or cooperative in a state of bankruptcy;

đ) Time and place for creditors to declare their debts and the legal consequences of failing to declare.

4. The court issues a decision not to open bankruptcy proceedings if it determines that the enterprise or cooperative has not entered a state of bankruptcy.

Article 29Notification of the decision to open bankruptcy proceedings

1. The court's decision on opening bankruptcy proceedings is sent to the enterprise or cooperative in a state of bankruptcy, the same-level prosecution agency, and published in the local newspaper where the enterprise or cooperative in a state of bankruptcy has its principal address, and in a central daily newspaper for three consecutive issues.

2. The court's decision on opening bankruptcy proceedings must be notified to the creditors and those indebted to the enterprise or cooperative in a state of bankruptcy.

3. The time limit for sending and notifying the decision to open bankruptcy proceedings as stipulated in Clause 1 and Clause 2 of this Article is seven days from the date the court issues the decision.

Article 30.Business activities of enterprises and cooperatives after the decision to open bankruptcy proceedings

1. All business activities of enterprises and cooperatives after the decision to open bankruptcy proceedings continue normally but must be subject to supervision and inspection by the judge and the asset management and liquidation team.

2. If it is determined that the manager of the enterprise or cooperative lacks the ability to manage or if continuing to manage would not be beneficial for preserving the assets of the enterprise or cooperative, upon the request of the creditors' meeting, the judge shall issue a decision appointing a manager to oversee the business operations of the enterprise or cooperative.

Article 31. Prohibited or restricted activities of enterprises and cooperatives

1. From the date of receiving the decision to open bankruptcy proceedings, enterprises and cooperatives are strictly prohibited from engaging in the following activities:

a) Concealing or disposing of assets;

b) Settling unsecured debts;

c) Abandoning or reducing debt collection rights;

d) Converting unsecured debts into secured debts by the enterprise's assets.

2. After receiving the decision to open bankruptcy proceedings, the following activities of enterprises and cooperatives must be approved in writing by the judge prior to implementation:

a) Pledging, mortgaging, transferring, selling, giving away, leasing assets;

b) Accepting assets from a transfer agreement;

c) Terminating an effective contract;

d) Borrowing money;

đ) Selling, converting shares, or transferring property ownership;

e) Paying newly incurred debts from business operations and salaries to employees of the enterprise or cooperative.

Article 32. Complaint regarding the decision not to open bankruptcy proceedings

1. The decision not to open bankruptcy proceedings must be sent by the court to the petitioner requesting the initiation of bankruptcy proceedings. Within seven days from the date of receiving the decision not to open bankruptcy proceedings, the petitioner has the right to lodge a complaint with the Chief Judge of that court.

2. Within five days from the date of receiving the complaint against the decision not to open bankruptcy proceedings, the Chief Judge of the court must issue one of the following decisions:

a) Maintain the decision not to open bankruptcy proceedings;

b) Revoke the decision not to open bankruptcy proceedings and issue a decision to open bankruptcy proceedings.

CHAPTER III
FINANCIAL OBLIGATIONS

Article 33. Determination of financial obligations

Financial obligations of enterprises and cooperatives in a state of bankruptcy are determined by:

1. Claims against enterprises and cooperatives to perform property obligations established before the court accepts the petition for bankruptcy proceedings where such obligations are not secured;

2. Claims against enterprises and cooperatives to perform property obligations that are secured established before the court accepts the petition for bankruptcy proceedings, but the priority right of payment has been revoked.

Article 34. Handling debts that have not yet matured

In case the Judge issues a decision to open liquidation proceedings for enterprises and cooperatives, debts that have not yet matured at the time of opening the liquidation proceedings shall be treated as matured debts, but interest shall not be calculated for the period prior to maturity.

Article 35. Handling debts secured by collateral or pledge

In case the Judge issues a decision to open liquidation proceedings for enterprises and cooperatives, debts secured by collateral or pledge established before the court accepts the petition for bankruptcy proceedings shall be prioritized for repayment from such collateral or pledge; if the value of the collateral or pledge is insufficient to repay the debt, the remaining debt will be repaid during the process of liquidating the enterprise's assets; if the value of the collateral or pledge exceeds the amount of the debt, the excess value will be added to the remaining asset value of the enterprise.

Article 36. Returning assets to the State

An enterprise that has been subject to special measures by the State regarding assets to restore business operations, but still fails to recover and must apply for liquidation proceedings, must return the value of the assets subject to special measures to the State before implementing the asset distribution as stipulated in Article 37 of this Law.

Article 37. Order of asset distribution

1. In case the Judge issues a decision to open liquidation proceedings for enterprises and cooperatives, the distribution of the value of the enterprise's and cooperative's assets shall follow the following order:

a) Bankruptcy fees;

b) Wages, severance pay, social insurance benefits as prescribed by law, and other rights according to collective labor agreements and signed labor contracts;

c) Unsecured debts payable to creditors listed in the creditor list on the principle that if the asset value is sufficient to repay all debts, each creditor will be fully repaid; if the asset value is insufficient to repay all debts, each creditor will only be partially repaid according to the corresponding ratio.

2. If the value of the enterprise's and cooperative's assets remains after fully paying the amounts specified in Clause 1 of this Article, the remainder belongs to:

a) Cooperative members;

b) Private enterprise owners;

c) Company shareholders; company joint stock shareholders;

d) State-owned enterprise owners.

3. In case the Judge issues a decision to open business recovery proceedings for enterprises and cooperatives, the payment shall be made in accordance with the order specified in Clause 1 of this Article, except where the parties have agreed otherwise.

Article 38. Determining the value of non-monetary obligations

In case the object of the obligation is not money, upon request of the person entitled or the enterprise, cooperative, the court shall determine the value of such obligation at the time of issuing the decision to open bankruptcy proceedings to include it in the enterprise's and cooperative's property obligations.

Article 39. Property obligations in cases of joint liability or guarantee

1. In case multiple enterprises and cooperatives have joint liability for a debt and one or more of them enter bankruptcy, the creditor may demand any of those enterprises or cooperatives to fulfill the repayment obligation according to the law.

2. In case the guarantor enters bankruptcy, the guaranteed party must fulfill the property obligation to the beneficiary of the guarantee.

3. In case both the guaranteed party and the guarantor enter bankruptcy, the guarantor must fulfill the property obligation to the beneficiary of the guarantee.

Article 40. Returning leased or borrowed assets when enterprises and cooperatives are subject to liquidation proceedings

1. Within thirty days from the date the court issues the decision to open liquidation proceedings, the owner of the assets leased or lent to the enterprise or cooperative subject to liquidation proceedings must present proof of ownership, lease or loan contracts to the Head of the Asset Management and Liquidation Team to reclaim their assets. In case of disputes, they must request the court to resolve according to the law.

2. In case the enterprise or cooperative subject to liquidation proceedings has prepaid rent but the lease period has not expired, the owner can only reclaim the asset after repaying the excess rent to the Asset Management and Liquidation Team to be included in the enterprise's or cooperative's asset pool.

3. In case the asset subject to reclaim has been transferred to another party by the enterprise or cooperative subject to liquidation proceedings, the owner has the right to claim compensation for such asset as a secured debt.

Article 41. Prohibition on reclaiming assets

Any individual or organization that has transferred assets to an enterprise or cooperative entering bankruptcy status before the court accepts the petition for bankruptcy proceedings shall not be allowed to reclaim such assets if the transfer was intended to secure the fulfillment of their obligations towards the enterprise or cooperative.

Article 42 |||. Recovery of Sold Goods

Where the seller has delivered goods to a buyer who is a business or cooperative that has entered into bankruptcy but has not yet been paid, and the buyer has not yet received the goods, the seller may recover those goods.

PART IV
MEASURES FOR SECURING ASSETS

Article 43. Void Transactions

1. The following transactions of a business or cooperative that has entered into bankruptcy, carried out within three months prior to the date on which the court accepts the application for initiating bankruptcy proceedings, shall be deemed void:

a) Gifts of movable and immovable property to others;

b) Performance of reciprocal contracts where the obligations of the business or cooperative are clearly greater than those of the other party;

c) Payment of debts that have not yet become due;

d) Pledging or mortgaging assets against debts;

đ) Other transactions with the purpose of dissipating the assets of the business or cooperative.

2. When transactions specified in Clause 1 of this Article are declared void, the recovered assets must be incorporated into the business or cooperative's asset pool.

Article 44 |||. Right to Request the Court to Declare a Transaction Void

1. During the course of bankruptcy proceedings, unsecured creditors, and the Asset Management and Liquidation Team have the right to request the court to declare the transactions of the business or cooperative specified in Clause 1 of Article 43 of this Law as void.

2. The head of the Asset Management and Liquidation Team is responsible for organizing the implementation of the court's decision declaring the business or cooperative's transaction as void to recover assets for the business or cooperative.

Article 45 |||. Suspension of Execution of Valid Contracts

1. During the course of bankruptcy proceedings, if it is determined that suspending the execution of a valid contract that is being performed or has not yet been performed would be more beneficial to the business or cooperative, such contract shall be suspended.

2. Creditors, businesses, cooperatives that have entered into bankruptcy, and the head of the Asset Management and Liquidation Team have the right to request the court to issue a decision to suspend the execution of a contract.

Article 46 |||. Document Requesting Suspension of Contract Execution

1. A request to the court to issue a decision to suspend the execution of a valid contract that is being performed or has not yet been performed must be made in writing and must include the following main contents:

a) Date of making the document;

b) Name and address of the person making the request;

c) Number and name of the contract; date of conclusion of the contract;

d) Counterparty in the contract;

đ) Specific content of the contract;

e) Basis for requesting suspension of contract execution.

2. Within five days from the date of receipt of the request, if accepted, the Judge shall issue a decision to suspend contract execution; if not accepted, the person making the request shall be notified.

Article 47 |||. Payment and Compensation for Damages when Contract Execution is Suspended

1. If the assets received by the business or cooperative that has entered into bankruptcy from the contract still exist in the business or cooperative's asset pool, the other party to the contract has the right to demand their return; if these assets no longer exist, the other party to the contract has the rights of an unsecured creditor.

2. In cases where the contract execution is suspended, the other party to the contract has the rights of an unsecured creditor regarding the damages caused by the suspension of contract execution.

Article 48. Set-off of Obligations

Creditors and enterprises, cooperatives entering into bankruptcy may implement set-off of obligations for transactions established before the decision to initiate bankruptcy proceedings, in accordance with the following principles:

1. In cases where both parties owe each other obligations regarding the same type of property, when due, they need not perform their obligations towards each other and such obligations shall be deemed terminated, except where otherwise provided by law;

2. Where the value of the property or work is not equivalent, the parties shall settle the difference in value between them;

3. Items valued in monetary terms may be set off against payment obligations.

Article 49. Assets of Enterprises, Cooperatives Entering Bankruptcy

1. The assets of enterprises, cooperatives entering bankruptcy include:

a) Property and rights to property that the enterprise, cooperative possesses at the time the court accepts the application to initiate bankruptcy proceedings;

b) Profits, properties, and rights to property that the enterprise, cooperative will have from the performance of transactions established before the court accepts the application to initiate bankruptcy proceedings;

c) Secured assets serving to fulfill the obligations of the enterprise, cooperative. In cases where secured assets are paid out to secured creditors, if the value of the secured asset exceeds the amount of secured debt to be settled, the excess portion shall be considered the asset of the enterprise, cooperative;

d) The value of land use rights of the enterprise, cooperative shall be determined according to the provisions of the law on land.

2. The assets of private enterprises, limited liability companies entering bankruptcy include the assets specified in Clause 1 of this Article and the assets of the individual business owner, general partner not directly used for business operations. If the individual business owner, general partner has jointly owned assets, the portion of the assets belonging to the individual business owner, general partner shall be divided according to the provisions of the Civil Code and other relevant laws.

Article 50. Inventory of Assets of Enterprises, Cooperatives Entering Bankruptcy

1. Within thirty days from the date of receipt of the decision to initiate bankruptcy proceedings, enterprises, cooperatives entering bankruptcy must conduct a comprehensive inventory of all assets according to the detailed inventory form submitted to the court and determine the value of those assets; if additional time is required, they must submit a written request to the Judge for an extension, but not more than twice, each extension not exceeding thirty days.

2. The inventory of assets with determined values must be immediately sent to the court conducting the bankruptcy proceedings.

3. In cases where it is found that the inventory and valuation of assets of enterprises, cooperatives as stipulated in Clause 1 of this Article are inaccurate, the Management and Liquidation Organization must re-inventory and re-value part or all of the assets of the enterprise, cooperative. The value of the assets shall be determined based on the market price at the time of inventory.

Article 51. Submitting Debt Claim Letters

1. Within sixty days from the last day of publication of the court's decision to initiate bankruptcy proceedings, creditors must submit debt claim letters to the court, specifying in detail the amounts owed, including both due and non-due debts, secured and unsecured debts that the enterprise, cooperative must pay. Supporting documents proving these debts must be attached. If creditors fail to submit debt claim letters to the court within this period, they shall be deemed to have waived their right to claim.

2. In cases of force majeure or objective obstacles, the duration of such events shall not be counted towards the sixty-day period specified in Clause 1 of this Article.

Article 52. Establishing a List of Creditors

1. Within fifteen days from the deadline for submitting debt claim letters, the Management and Liquidation Organization must complete the list of creditors and amounts owed. This list must clearly record the amount owed by each creditor, distinguishing between secured and unsecured debts, due and non-due debts.

2. The list of creditors must be publicly posted at the court's premises conducting the bankruptcy proceedings and the main office of the enterprise, cooperative within ten days from the posting date. During this period, creditors and enterprises, cooperatives entering bankruptcy have the right to appeal to the court regarding the list of creditors. In cases of force majeure or objective obstacles, the duration of such events shall not be counted towards the ten-day period specified in this clause.

3. Within three days from receiving the appeal, the court must examine and resolve the appeal; if the appeal is justified, the court shall amend and supplement the list of creditors.

Article 53. Establishing a List of Debtor Individuals

1. The Management and Liquidation Organization must establish a list of individuals indebted to enterprises, cooperatives entering bankruptcy. This list must clearly record the amount owed by each debtor individual, distinguishing between secured and unsecured debts, due and non-due debts.

2. The list of debtor individuals must be publicly posted at the court's premises conducting the bankruptcy proceedings and the main office of the enterprise, cooperative within ten days from the posting date. During this period, debtor individuals and enterprises, cooperatives entering bankruptcy have the right to appeal to the court regarding the list of debtor individuals.

3. Within three days from receiving the appeal, the court must examine and resolve the appeal; if the appeal is justified, the court shall amend and supplement the list of debtor individuals.

Article 54Registration of Security Transactions of Enterprises, Cooperatives Entering Bankruptcy

Enterprises, cooperatives entering bankruptcy lending assets with security to others must register in accordance with the law, but if registration has not been made, the Head of the Management and Liquidation Organization must immediately carry out the registration of such security transactions.

Article 55. Application of Interim Measures

In cases where it is necessary upon the request of the asset management and liquidation team, the judge responsible for initiating bankruptcy proceedings shall issue a decision to apply one or more of the following urgent temporary measures to preserve the assets of enterprises and cooperatives that have entered into a state of bankruptcy:

1. Selling goods that are prone to deterioration, goods nearing their expiration date, or goods that, if not sold at the right time, will be difficult to sell.

2. Seizing and sealing the assets of enterprises and cooperatives.

3. Freezing the bank accounts of enterprises and cooperatives.

4. Sealing warehouses, funds, confiscating and managing accounting books and related documents of enterprises and cooperatives.

5. Prohibiting or compelling enterprises, cooperatives, individuals, or other related organizations to perform certain actions.

Article 56. Appeal against the decision on applying urgent temporary measures

1. Within three days from the date of receiving the court's decision on applying urgent temporary measures, the person subject to such measures has the right to appeal to the Chief Judge of the Court.

2. Within three days from the date of receiving the appeal against the decision on applying urgent temporary measures, the Chief Judge of the Court must issue one of the following decisions:

a) Maintain the decision on applying urgent temporary measures;

b) Revoke part or all of the decision on applying urgent temporary measures.

Article 57Suspension of civil enforcement or resolution of cases

1. From the date the Court issues the decision to initiate bankruptcy proceedings, civil enforcement actions concerning assets owed by enterprises and cooperatives that have entered into a state of bankruptcy must be suspended.

The party entitled to enforcement may submit a petition to the Court requesting payment from the enterprise or cooperative's assets as either an unsecured creditor or a secured creditor, provided there is a final judgment or decision of the Court that has legal effect, which has attached the assets of the enterprise or cooperative to secure enforcement.

2. From the date the Court issues the decision to initiate bankruptcy proceedings, the resolution of cases involving financial obligations where the enterprise or cooperative is a party must be suspended. The Court issuing the decision to suspend case resolution must transfer the case file to the Court conducting the bankruptcy proceedings for resolution.

Article 58Resolution of suspended cases in bankruptcy proceedings

1. Upon receipt of the case file transferred by the Court that issued the decision to suspend case resolution, the Court conducting the bankruptcy proceedings must examine and decide on the financial obligations that the enterprise or cooperative in a state of bankruptcy must fulfill or the financial obligations that the party must fulfill towards the enterprise or cooperative.

2. In cases where the enterprise or cooperative in a state of bankruptcy must fulfill financial obligations, the party receiving such financial obligations from the enterprise or cooperative has the right to request payment from the enterprise or cooperative's assets as an unsecured creditor.

3. In cases where the party must fulfill financial obligations towards the enterprise or cooperative in a state of bankruptcy, they must pay the enterprise or cooperative an amount corresponding to those financial obligations.

Article 59. Obligations of banks where enterprises and cooperatives have accounts

From the date of receiving the Court's decision to apply liquidation procedures for enterprises and cooperatives, the bank where the enterprise or cooperative subject to liquidation has an account is strictly prohibited from performing the following actions:

1. Paying off debts of the enterprise or cooperative, except for payments approved in writing by the judge responsible for initiating bankruptcy proceedings.

2. Engaging in any action aimed at offsetting or paying off amounts loaned to the enterprise or cooperative by the bank.

Article 60. Obligations of employees and workers

1. Immediately upon receiving the decision to initiate bankruptcy proceedings, enterprises and cooperatives in a state of bankruptcy must publicly notify all their employees and workers.

2. From the date of notification, all employees and workers must have the obligation to protect the assets of the enterprise or cooperative and must not engage in any actions aimed at concealing, transferring, or disposing of the enterprise or cooperative's assets.

CHAPTER V
CREDITORS' MEETING

Article 61. Calling the Creditors' Meeting

1. In cases where the inventory of assets of the enterprise or cooperative entering bankruptcy ends before the creditor list is completed, within thirty days from the date of completing the creditor list, the Judge must call the Creditors' Meeting; if the inventory of assets of the enterprise or cooperative ends after the creditor list is completed, this period shall be calculated from the date of completing the asset inventory of the enterprise or cooperative.

2. Subsequent Creditors' Meetings may be called by the Judge at any working day during the bankruptcy proceedings upon request of the Asset Management and Liquidation Team or by creditors representing at least one-third of the total amount of unsecured debt.

3. The summons to the Creditors' Meeting must be sent to those entitled to participate in the Creditors' Meeting and those obligated to participate as stipulated in Articles 62 and 63 of this Law, at least fifteen days prior to the opening of the meeting. The program, agenda, and other documents of the meeting must accompany the summons.

4. The Creditors' Meeting shall be chaired by the Judge responsible for conducting the bankruptcy proceedings.

Article 62. Rights to Participate in the Creditors' Meeting

The following persons have the right to participate in the Creditors' Meeting:

1. Creditors listed in the creditor list. Creditors may authorize another person in writing to attend the Creditors' Meeting, and the authorized person has the rights and obligations of the creditor.

2. Representatives of workers and trade unions authorized by workers. In this case, representatives of workers and trade unions have the rights and obligations of creditors.

3. Guarantors who have paid off debts on behalf of enterprises or cooperatives entering bankruptcy. In this case, they become unsecured creditors.

Article 63. Responsibilities of the Ministry of Science and Technology Obligations to Participate in the Creditors' Meeting

1. Persons filing for the commencement of bankruptcy proceedings as stipulated in Articles 15, 16, 17, and 18 of this Law are obliged to participate in the Creditors' Meeting; if unable to participate, they must authorize another person in writing to attend the Creditors' Meeting. The authorized person has the rights and obligations of the authorizer if they attend the Creditors' Meeting; in the case of a private enterprise where the owner has died, the lawful heir of the owner participates in the Creditors' Meeting.

2. If there is no representative of the enterprise or cooperative entering bankruptcy as stipulated in Clause 1 of this Article participating in the Creditors' Meeting, the Judge responsible for conducting the bankruptcy proceedings shall designate a representative for the enterprise or cooperative to participate in the Creditors' Meeting.

Article 64. Contents of the First Creditors' Meeting

1. The first Creditors' Meeting includes the following contents:

a) The head of the Asset Management and Liquidation Team informs the Creditors' Meeting about the business situation and financial status of the enterprise or cooperative entering bankruptcy; the results of the asset inventory, the creditor list, the debtor list, and other necessary contents.

b) The enterprise owner or the legal representative of the enterprise or cooperative presents opinions on the contents announced by the head of the Asset Management and Liquidation Team to the Creditors' Meeting, proposes restructuring plans and solutions, and discusses the ability and timeframe for debt repayment.

c) The Creditors' Meeting discusses the contents announced by the head of the Asset Management and Liquidation Team and the opinions of the enterprise owner and the legal representative of the enterprise or cooperative.

d) The Creditors' Meeting adopts the Resolution. The Resolution must be recorded in writing and approved by more than half of the unsecured creditors present at the meeting representing at least two-thirds of the total amount of unsecured debt. The Resolution of the Creditors' Meeting is binding on all creditors.

đ) In cases where the Creditors' Meeting considers it necessary to replace the representative of the creditors in the Asset Management and Liquidation Team, the Creditors' Meeting elects a replacement.

e) Propose that the Judge issue a decision appointing a manager and operator of the enterprise or cooperative entering bankruptcy.

2. If it is necessary to organize subsequent Creditors' Meetings, the program and content of the subsequent meetings shall be decided by the Judge responsible for conducting the bankruptcy proceedings based on the proposals of the persons stipulated in Clause 2 of Article 61 of this Law.

Article 65. Conditions for a valid Creditors' Meeting

The Creditors' Meeting is only valid if it meets all of the following conditions:

1. More than half of the unsecured creditors representing at least two-thirds of the total amount of unsecured debt participate;

2. There is participation from those required to attend the Creditors' Meeting as stipulated in Article 63 of this Law.

Article 66. Postponement of the Creditors' Meeting

1. The Creditors' Meeting may be postponed once if any of the following circumstances occur:

a) Less than half of the unsecured creditors representing at least two-thirds of the total amount of unsecured debt participate;

b) More than half of the unsecured creditors present at the Creditors' Meeting vote to postpone the Creditors' Meeting;

c) Those required to attend the Creditors' Meeting as stipulated in Article 63 of this Law are absent for legitimate reasons.

2. In the case where the Judge issues a decision to postpone the Creditors' Meeting, within thirty days from the date of issuing the postponement decision, the Judge must reconvene the Creditors' Meeting.

Article 67. Suspension of bankruptcy proceedings due to absence of participants in the Creditors' Meeting

The Judge shall issue a decision to suspend the bankruptcy proceedings in the following cases:

1. After the Creditors' Meeting has been postponed once, if the applicant requesting the initiation of bankruptcy proceedings as stipulated in Articles 13 and 14 of this Law does not participate in the reconvened Creditors' Meeting;

2. In the case where only the applicants as stipulated in Articles 15, 16, 17, and 18 of this Law request the initiation of bankruptcy proceedings but those required to attend the Creditors' Meeting as stipulated in Article 63 of this Law do not attend without legitimate reasons;

3. If the applicant requesting the initiation of bankruptcy proceedings withdraws their application; if the applicants as stipulated in Articles 13, 14, 15, 16, 17, and 18 of this Law request the initiation of bankruptcy proceedings and only one or some of them withdraw their applications, the Court will still proceed with the bankruptcy proceedings.

Chapter VI
RECOVERY PROCEDURE, LIQUIDATION PROCEDURE

PART 1
RECOVERY OF BUSINESS OPERATIONS PROCEDURE

Article 68. Conditions for applying the recovery of business operations procedure

1. The Judge shall issue a decision to apply the recovery of business operations procedure after the first Creditors' Meeting approves the resolution agreeing with the restructuring measures, payment plan for creditors, and the requirement for the enterprise or cooperative to develop a recovery plan for business operations.

2. Within thirty days from the date the first Creditors' Meeting approves the resolution, the enterprise or cooperative in a state of bankruptcy must develop its own recovery plan for business operations and submit it to the Court; if more time is needed, they must request the Judge to extend the deadline in writing. The extension period shall not exceed thirty days.

During this period, any creditor or person who undertakes the obligation to recover the business operations of the enterprise or cooperative may draft a recovery plan for business operations and submit it to the Court.

Article 69. Content of the recovery plan for business operations

1. The recovery plan for business operations of enterprises or cooperatives in a state of bankruptcy must clearly specify necessary measures to recover business operations; conditions, deadlines, and plans for paying off debts.

2. Necessary measures to recover business operations include:

a) Raising new capital;

b) Changing the range of products produced or traded;

c) Updating production technology;

d) Reorganizing management structures; merging or splitting production units to improve productivity and product quality;

đ) Selling shares to creditors;

e) Selling or leasing unnecessary assets;

g) Other measures that do not contravene the law.

3. Before starting or at the Creditors' Meeting, the recovery plan for business operations can be modified or supplemented upon agreement of the parties.

Article 70. Reviewing the recovery plan for business operations before presenting it to the Creditors' Meeting

Within fifteen days from the date of receiving the recovery plan for business operations, the Judge must review the recovery plan for business operations and issue one of the following decisions:

1. Present the plan to the Creditors' Meeting for consideration and decision;

2. Propose modifications or supplements to the recovery plan for business operations if it does not ensure the contents stipulated in Article 69 of this Law.

Article 71. Consideration and approval of the business recovery plan

1. Within ten days from the date of the decision to submit the business recovery plan of the enterprise or cooperative entering bankruptcy to the Creditors' Meeting, the Judge must convene the Creditors' Meeting to consider and approve the plan.

2. The Creditors' Meeting shall consider and discuss the business recovery plan.

The resolution on the business recovery plan of the enterprise or cooperative shall be approved when more than half of the unsecured creditors representing at least two-thirds of the total unsecured debt present and vote in favor.

Article 72. Recognition of the Resolution on the Business Recovery Plan

1. The Judge issues a decision recognizing the resolution of the Creditors' Meeting on the business recovery plan of the enterprise or cooperative entering bankruptcy. This resolution shall be binding on all parties concerned.

2. The Court must send the decision recognizing the resolution of the Creditors' Meeting on the business recovery plan to the enterprise or cooperative entering bankruptcy and the creditors within seven days from the date of issuance.

Article 73. Supervision of the Implementation of the Business Recovery Plan

1. After the Judge issues a decision recognizing the resolution of the Creditors' Meeting on the business recovery plan of the enterprise or cooperative entering bankruptcy, the Management and Liquidation Organization shall be established.

2. Every six months, the enterprise or cooperative must submit a report to the Court on the implementation of the business recovery plan.

3. Creditors have the obligation to supervise the implementation of the business recovery plan of the enterprise or cooperative.

Article 74. Time Limit for Implementing the Business Recovery Plan

The maximum time limit for implementing the business recovery plan of the enterprise or cooperative entering bankruptcy is three years, starting from the last day of publication of the Court's decision recognizing the resolution of the Creditors' Meeting on the business recovery plan of the enterprise or cooperative.

Article 75. Amendment and Supplement to the Business Recovery Plan

1. During the implementation of the business recovery plan, the creditors and the enterprise or cooperative have the right to agree on amending and supplementing the business recovery plan.

2. The agreement on amending and supplementing the business recovery plan of the enterprise or cooperative shall be accepted when more than half of the unsecured creditors representing at least two-thirds of the total unsecured debt not yet paid agree.

3. The Judge issues a decision recognizing the agreement of the parties and sends that decision to the enterprise or cooperative entering bankruptcy and the creditors within seven days from the date of issuance.

Article 76. Suspension of the Business Recovery Procedure

1. The Judge issues a decision suspending the business recovery procedure of the enterprise or cooperative entering bankruptcy if any of the following circumstances occur:

a) The enterprise or cooperative has completed the implementation of the business recovery plan;

b) More than half of the votes of the unsecured creditors representing at least two-thirds of the total unsecured debt not yet paid agree to suspend.

2. The Court must send and publicly announce the decision to suspend the business recovery procedure of the enterprise or cooperative according to Article 29 of this Law.

Article 77. Legal Consequences of Suspending the Business Recovery Procedure

1. In case the Judge issues a decision suspending the business recovery procedure of the enterprise or cooperative entering bankruptcy, such enterprise or cooperative shall be deemed not to be in a state of bankruptcy.

2. In case the enforcement of civil execution or the resolution of the case is suspended according to Article 57 of this Law and has not been executed or resolved, immediately after issuing the decision to suspend the business recovery procedure of the enterprise or cooperative entering bankruptcy, the civil execution or the resolution of the case shall continue. The Court issuing the decision to suspend the procedure must return the case file to the competent Court to resolve the case according to the law.

PART 2
LIQUIDATION PROCEDURE

Article 78. Decision to Open the Liquidation Procedure in Special Cases

In cases where the enterprise's business operations suffer losses and the State has applied special measures to recover the business but still cannot recover and cannot pay the due debts when requested by the creditor, the Court shall issue a decision to open the liquidation procedure of the enterprise without having to convene the Creditors' Meeting to consider the application of the recovery procedure.

Article 79. Decision to open liquidation proceedings when the Creditors' Meeting does not convene

The Judge shall issue a decision to open liquidation proceedings when the Creditors' Meeting does not convene in the following cases:

1. The business owner or the legitimate representative of the enterprise or cooperative does not participate in the Creditors' Meeting without a valid reason, or after the Creditors' Meeting has been postponed once if the applicant requesting to open bankruptcy proceedings falls under Articles 13 and 14 of this Law;

2. There are not enough creditors participating in the Creditors' Meeting as stipulated in Clause 1 of Article 65 of this Law after the Creditors' Meeting has been postponed once if the applicant requesting to open bankruptcy proceedings falls under Articles 15, 16, 17, and 18 of this Law.

Article 80. Decision to open liquidation proceedings after the Resolution of the first Creditors' Meeting

After the first Creditors' Meeting approves the Resolution agreeing with the proposed measures to reorganize business operations, the debt repayment plan for creditors, and the requirement that the enterprise or cooperative must develop a business recovery plan, if any of the following situations occur, the Court shall issue a decision to open liquidation proceedings for the enterprise or cooperative:

1. The enterprise or cooperative fails to develop a business recovery plan within the time limit specified in Clause 1 of Article 68 of this Law;

2. The Creditors' Meeting does not approve the business recovery plan of the enterprise or cooperative;

3. The enterprise or cooperative fails to implement or cannot implement the business recovery plan, except in cases where the parties have agreed otherwise.

Article 81. Content of the decision to open liquidation proceedings

1. The decision to open liquidation proceedings prescribed in Articles 78, 79, and 80 of this Law must include the following main contents:

a) Date of issuance of the decision;

b) Name of the court; name and surname of the judge responsible for conducting the bankruptcy proceedings;

c) The name and address of the enterprise or cooperative subject to the liquidation procedure;

d) The basis for applying the liquidation procedure;

đ) The asset distribution plan of the enterprise or cooperative according to the principles stipulated in Article 37 of this Law;

e) The right to appeal, protest, and the deadline for appeals and protests.

2. The decision to open liquidation proceedings for enterprises or cooperatives in a state of bankruptcy must be sent and publicly announced by the Court in accordance with Article 29 of this Law.

Article 82. Activities of enterprises or cooperatives during the liquidation process

During the implementation of the decision to open liquidation proceedings, upon the request of the Management and Liquidation Team, the Judge may issue a decision allowing the enterprise or cooperative to carry out certain necessary activities for the liquidation process or to increase its assets.

Article 83. Appeals and protests against the decision to open liquidation proceedings

1. Enterprises or cooperatives in a state of bankruptcy, creditors have the right to appeal, and the People's Procuracy at the same level has the right to protest the decision to open liquidation proceedings.

2. Debtors of enterprises or cooperatives have the right to appeal the part of the decision to open liquidation proceedings related to their debt repayment obligations.

3. The appeal and protest period is twenty days from the last day of publication of the decision to open liquidation proceedings in the newspaper.

Within five days from the end of the appeal and protest period, the Court that issued the decision to open liquidation proceedings for the enterprise or cooperative must submit the bankruptcy file along with the appeal letter and protest decision to the higher-level Court for review and resolution of the appeal and protest against the decision to open liquidation proceedings.

Article 84. Resolution of appeals and protests against the decision to open liquidation proceedings

1. Upon receipt of the bankruptcy file along with the appeal letter and protest decision, the President of the higher-level Court shall designate a panel of three Judges to examine and resolve appeals and protests against the decision to open liquidation proceedings.

2. Within sixty days from the date of receiving the bankruptcy file, the Panel of Judges must examine and resolve appeals and protests against the decision to open liquidation proceedings. The Panel of Judges has the authority to issue one of the following decisions:

a) Not accepting the appeal or protest and maintaining the decision to open liquidation proceedings of the lower Court;

b) Amending the decision to open liquidation proceedings of the lower Court;

c) Revoking the decision to open liquidation proceedings of the lower Court and transferring the bankruptcy file back to the lower Court to continue the recovery process in accordance with this Law.

3. The decision resolving appeals and protests by the higher-level Court is the final decision and becomes legally binding from the date of issuance.

Article 85. Suspension of liquidation proceedings

The Judge shall issue a decision to suspend liquidation proceedings in the following cases:

1. The enterprise or cooperative no longer has assets to implement the asset distribution plan;

2. The asset distribution plan has been fully implemented.

Chapter VII
DECLARATION OF ENTERPRISE OR COOPERATIVE BANKRUPTCY

Article 86. Decision declaring a business or cooperative to be bankrupt

The judge shall issue a decision declaring a business or cooperative to be bankrupt simultaneously with issuing a decision suspending the liquidation procedure.

Article 87. Decision declaring a business or cooperative to be bankrupt in special cases

1. Within thirty days from the expiration date of the advance payment for bankruptcy fees set by the Court, if the business owner or the legitimate representative of the business or cooperative does not have money or other assets to pay the advance bankruptcy fee when submitting a request to initiate the bankruptcy procedure, the Court shall issue a decision declaring the business or cooperative to be bankrupt.

2. After accepting the request to initiate the bankruptcy procedure and receiving relevant documents and papers sent by the parties involved, the Court shall issue a decision declaring the business or cooperative to be bankrupt if the business or cooperative has fallen into a state of bankruptcy without any assets or with insufficient assets to cover the bankruptcy fees.

Article 88. Contents of the decision declaring a business or cooperative to be bankrupt

The decision declaring a business or cooperative to be bankrupt must include the following main contents:

1. Date, month, year of issuance;

2. Name of the Court; name and surname of the Judge responsible for conducting the bankruptcy procedure;

3. Name and address of the business or cooperative declared bankrupt;

4. Basis for declaring bankruptcy;

5. Right to appeal and protest and the time limit for appealing and protesting;

6. Prohibition on assuming positions after the business or cooperative is declared bankrupt as stipulated in Article 94 of this Law.

Article 89. Announcing the decision declaring a business or cooperative to be bankrupt

1. Within fifteen days from the date of issuing the decision declaring the business or cooperative to be bankrupt, the Court must send and publicly announce the decision according to the provisions of Article 29 of this Law.

2. Within ten days from the date the decision declaring the business or cooperative to be bankrupt becomes legally effective, the Court must send the decision to the business registration authority to remove the name of the business or cooperative from the business registration book; in case the Supreme People's Court issues a decision to resolve appeals or protests according to the provisions of Article 92 of this Law, the deadline may be longer but not exceeding twenty-five days.

Article 90. Obligations regarding property after issuance of the decision declaring a business or cooperative to be bankrupt

1. The decision declaring a business or cooperative to be bankrupt as stipulated in Articles 86 and 87 of this Law does not exempt the obligations regarding property of the private business owner or the general partner of a limited partnership towards creditors who have not been paid their debts, except in cases where the parties have agreed otherwise or the law provides differently.

2. Obligations regarding property arising after the issuance of the decision declaring a business or cooperative to be bankrupt shall be resolved according to the provisions of the Civil Enforcement Law and other related laws.

Article 91. Appeals and protests against the decision declaring a business or cooperative to be bankrupt

1. Persons specified in Article 29 of this Law have the right to appeal, and the People's Procuracy at the same level has the right to protest the decision declaring a business or cooperative to be bankrupt.

2. The time limit for appealing and protesting is twenty days, counted from the last day of publishing the decision declaring the business or cooperative to be bankrupt in the newspaper.

Within five days from the expiration of the appeal and protest period, the Court that issued the decision declaring the business or cooperative to be bankrupt must submit the bankruptcy file along with the appeal letter and protest decision to the higher-level Court for consideration and resolution of appeals and protests against the decision declaring the business or cooperative to be bankrupt.

3. If the decision declaring a business or cooperative to be bankrupt is not appealed or protested, it shall become legally effective from the date the appeal and protest period specified in Clause 2 of this Article expires.

Article 92. Handling complaints and appeals against decisions declaring bankruptcy of enterprises and cooperatives

1. Upon receipt of the bankruptcy file accompanied by a complaint and an appeal decision, the President of the Higher Court shall designate a panel consisting of three judges to examine and handle complaints and appeals against decisions declaring bankruptcy of enterprises and cooperatives.

2. Within forty-five days from the date of receiving the bankruptcy file accompanied by a complaint and an appeal decision, the panel of judges must examine and handle complaints and appeals against decisions declaring bankruptcy of enterprises and cooperatives. The panel of judges has the authority to issue one of the following decisions:

a) Not accepting the complaint and appeal and maintaining the decision declaring bankruptcy of the enterprise or cooperative made by the lower court;

b) Revoking the decision declaring bankruptcy of the enterprise or cooperative made by the lower court and transferring the bankruptcy file back to the lower court for continued bankruptcy proceedings.

3. The decision resolving appeals and protests by the higher-level Court is the final decision and becomes legally binding from the date of issuance.

Chapter VIII
HANDLING VIOLATIONS

Article 93. Liability for violation of laws during the bankruptcy process

1. Any person who commits a violation of the law during the bankruptcy process shall be subject to disciplinary action, administrative fines, or criminal prosecution depending on the nature and severity of the violation; if damage is caused, compensation must be provided according to the provisions of the law.

2. The Government shall specify the administrative penalties and fine amounts for violations of administrative regulations during the bankruptcy process.

Article 94. Prohibition on assuming positions after declaration of bankruptcy of enterprises and cooperatives

1. Individuals holding the positions of General Director, Managing Director, Chairman, and members of the Board of Directors of state-owned companies and corporations declared bankrupt may not be appointed to such positions in any state-owned enterprise from the date of the declaration of bankruptcy of the state-owned company or corporation.

Individuals entrusted with representing state capital in other enterprises that have been declared bankrupt may not be appointed to management positions in any enterprise with state capital.

2. Private enterprise owners, general partners of limited partnerships, General Directors (Managing Directors), Chairmen, and members of the Board of Directors, Board of Members of enterprises, and Heads, members of the Management Committees of cooperatives declared bankrupt may not establish enterprises or cooperatives and may not serve as managers of enterprises or cooperatives for a period of one to three years from the date of declaration of bankruptcy of the enterprise or cooperative.

3. The provisions of Clause 1 and Clause 2 of this Article do not apply in cases where enterprises or cooperatives are declared bankrupt due to force majeure.

CHAPTER IX
IMPLEMENTING PROVISIONS

Article 95. Effectiveness

1. This Law takes effect from October 15, 2004, and replaces the Enterprise Bankruptcy Law dated December 30, 1993.

2. The Government, the Supreme People's Court, and the Supreme People's Procuracy within their respective mandates shall provide detailed regulations and guidance for the implementation of this Law.

This Law was adopted by the National Assembly of the Socialist Republic of Vietnam, the 11th Session, Fifth Meeting, on June 15, 2004./.