Law on Recovery and Bankruptcy 2025, No. 142/2025/QH15

LAW

On Recovery and Bankruptcy¹

Pursuant to the Constitution of the Socialist Republic of Vietnam, which has a number of articles amended and supplemented under Resolution No. 203/2025/QH15;

The National Assembly promulgates the Law on Recovery and Bankruptcy.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Law provides the principles, order and procedures for determination of recovery or bankruptcy cases of enterprises, and cooperatives and unions of cooperatives (below collectively referred to as cooperatives); the tasks and powers of persons carrying out recovery or bankruptcy procedures; and the rights and obligations of persons participating in recovery or bankruptcy procedures.

Article 2. Application of law

The Law on Recovery and Bankruptcy shall apply to the determination of recovery or bankruptcy cases of enterprises and cooperatives; in case this Law does not provide this issue, relevant laws shall apply. This Law’s provisions on recovery procedures and fast-track recovery procedures are not applicable to credit institutions, insurance enterprises and reinsurance enterprises.

Article 3. Fundamental principles

1. Prioritising the application of recovery procedures for enterprises and cooperatives.

2. Ensuring that recovery or bankruptcy procedures are carried out in a timely and effective manner; ensuring the harmony of interests and the optimisation of the value of assets of enterprises and cooperatives.

3. Ensuring publicity and transparency, unless otherwise provided by law.

Article 4. The State’s policies on recovery or bankruptcy of enterprises and cooperatives

1. The State shall adopt support policies on tax, charge, credit, interest rate, land, technology and digital transformation, and other support measures for enterprises and cooperatives facing difficulties in business activities to carry out recovery or bankruptcy procedures, with a view to restructuring, restoring or terminating business activities in an orderly manner, thereby contributing to improving the business investment environment and the health of the economy.

2. Based on the State’s resource-balancing capacity in each period, the Government shall submit to competent agencies for promulgation, or promulgate according to its competence, specific mechanisms and policies to provide support or promptly remove difficulties and obstacles for enterprises and cooperatives in recovery or bankruptcy.

Article 5. Interpretation of terms

In this Law, the terms below are construed as follows:

1. Enterprise or cooperative at risk of insolvency means an enterprise or a cooperative that is unable to pay a debt that will become due within the next 6 months or a debt that has become overdue for no more than 6 months.

2. Insolvent enterprise or cooperative means an enterprise or a cooperative that fails to pay a debt after 6 months from the due date of such debt.

3. Recovery means the status of an enterprise or a cooperative that no longer faces insolvency risk and the court has issued a decision on termination of recovery procedures, or in which an enterprise or a cooperative does not fall into insolvency and the court has issued a decision on termination of recovery procedures.

4. Bankruptcy means the status of an enterprise or a cooperative that becomes insolvent and the court has issued a bankruptcy declaration decision.

5. Creditor means an individual, agency or organisation that has the right to request the concerned enterprise or cooperative to pay a debt; creditors include unsecured creditors, partially secured creditors and secured creditors.

6. Unsecured creditor means an individual, agency or organisation that has the right to request the concerned enterprise or cooperative to pay a debt not secured by assets of such enterprise or cooperative or of a third party.

7. Secured creditor means an individual, agency or organisation that has the right to request the concerned enterprise or cooperative to pay a debt secured by assets of such enterprise or cooperative or of a third party.

8. Partially secured creditor means an individual, agency or organisation that has the right to request the concerned enterprise or cooperative to pay a debt secured by assets of such enterprise or cooperative or of a third party while the value of the collateral is lower than such debt.

9. Asset management officer means an individual practising the management and liquidation of assets of enterprises or cooperatives in the course of determination of recovery or bankruptcy cases.

10. Asset management and liquidation enterprise means an enterprise practising the management and liquidation of assets of enterprises or cooperatives in the course of determination of recovery or bankruptcy cases.

11. Persons carrying out recovery or bankruptcy procedures include Chief Justices, Judges and Court Clerks; Chief Procurators and procurators; asset management officers or asset management and liquidation enterprises; and heads of civil judgment enforcement agencies, enforcement officers and other competent persons as specified by law in the course of determination of recovery or bankruptcy cases.

12. Persons participating in recovery or bankruptcy procedures include creditors; employees; enterprises and cooperatives; shareholders or groups of shareholders of joint stock companies; members or groups of members of limited liability companies; general partners of partnerships; owners of sole proprietorships; members of cooperatives or member cooperatives of unions of cooperatives; debtors of enterprises or cooperatives; and other persons with related rights and obligations in the course of determination of recovery or bankruptcy cases.

13. Recovery or bankruptcy fee means a money amount payable by the applicant claiming the application of recovery or bankruptcy procedures for the Court to accept a claim.

14. Recovery or bankruptcy cost means a money amount payable for the determination of a recovery or bankruptcy case, including the expense for the asset management officer or asset management and liquidation enterprise, audit expense, expense for enforcement of the court decision, and other necessary and reasonable expenses for the performance of recovery or bankruptcy procedures.

15. Expense for asset management officer or asset management and liquidation enterprise means a money amount payable for the determination of a recovery or bankruptcy case by the asset management officer or asset management and liquidation enterprise.

16. Advance amount of recovery or bankruptcy cost means a money amount temporarily calculated by the Judge to cover expenses in the course of carrying out recovery or bankruptcy procedures.

17. Recovery or bankruptcy case covers a claim for the application of recovery or bankruptcy procedures; a claim for assistance in a foreign recovery or bankruptcy case; and a claim for recognition and enforcement of a recovery or bankruptcy judgment or decision of a foreign court or authority in accordance with this Law.

18. Unpaid amount of compulsory social insurance, unemployment insurance, health insurance or occupational accident and disease insurance premiums means a late-paid amount or an evaded amount of compulsory social insurance, unemployment insurance, health insurance or occupational accident and disease insurance premiums as specified by law.

Article 6. Jurisdiction to determine recovery or bankruptcy cases

1. Regional People’s Courts have the jurisdiction to determine recovery or bankruptcy cases within the scope of their territorial jurisdiction.

The scope of territorial jurisdiction of regional People’s Courts for recovery or bankruptcy cases shall be provided by the National Assembly Standing Committee.

2. The jurisdiction of regional People’s Courts shall be determined as follows:

a/ The regional People’s Court of the locality where an enterprise or a cooperative is headquartered has the jurisdiction to settle the claim for application of recovery or bankruptcy procedures for such enterprise or cooperative;

b/ The regional People’s Court of the locality where the judgment debtor resides or works or is headquartered, or where exist assets related to the enforcement of the recovery or bankruptcy judgment or decision has the jurisdiction to settle the claim for recognition and enforcement of the recovery or bankruptcy judgment or decision of foreign court or authority;

c/ The regional People’s Court of the locality where the person related to the claim for assistance in the foreign recovery or bankruptcy case resides or works or is headquartered, or where exist assets related to the claim for assistance in the recovery or bankruptcy case has the jurisdiction to settle the claim for assistance in the foreign recovery or bankruptcy case.

3. Provincial-level People’s Courts, within the scope of their territorial jurisdiction, have the jurisdiction to settle proposals of regional People’s Courts for review of or protest against decisions declaring enterprises or cooperatives bankrupt; or decisions on recognition and enforcement of recovery or bankruptcy judgments or decisions of foreign courts and authorities.

4. The Supreme People’s Court has the jurisdiction to:

a/ Review decisions on settlement of applications for review of, or decisions on settlement of protests against, decisions declaring enterprises or cooperatives bankrupt that are issued by provincial-level People’s Courts under Clause 4, Article 67 of this Law;

b/ Resolve disputes over jurisdiction between regional People’s Courts.

Article 7. Tasks and powers of Judges in determination of recovery or bankruptcy cases

1. To guide and request persons participating in recovery or bankruptcy procedures to collect and submit documents and evidence to prove that their claims and proposals are grounded and lawful; to examine and verify the authenticity of documents and evidence in accordance with law.

2. To request agencies, organisations and individuals to provide documents and evidence related to recovery or bankruptcy cases.

3. To decide on the application of fast-track recovery procedures; to decide on the application of fast-track bankruptcy procedures.

4. To decide on the appointment or replacement of asset management officers or asset management and liquidation enterprises.

5. To supervise activities of asset management officers or asset management and liquidation enterprises when determining recovery or bankruptcy cases.

6. To decide on the audit of enterprises or cooperatives when necessary.

7. To decide on the sale of assets of enterprises or cooperatives to cover recovery or bankruptcy costs and to preserve assets of enterprises or cooperatives.

8. To decide on the application of interim measures in accordance with this Law.

9. To apply the measure of prohibition from leaving place of residence and request competent agencies to compel representatives of enterprises or cooperatives to appear in accordance with law.

10. To decide on the organisation of creditors’ meetings.

11. To decide on the recognition or non-recognition of resolutions of creditors’ meetings regarding business recovery plans.

12. To decide on the termination of recovery procedures or the termination of bankruptcy procedures.

13. To decide to declare enterprises or cooperatives bankrupt.

14. To apply measures to sanction administrative violations or recommend competent agencies to impose criminal handling in accordance with law.

15. To apply judicial precedents in the course of determining recovery or bankruptcy cases.

16. To conduct mediation of disputes relating to assets of enterprises or cooperatives at the proposal of persons participating in recovery or bankruptcy procedures and decide on the recognition of the agreement between the parties.

17. To consider providing assistance for foreign recovery or bankruptcy cases.

18. To consider and settle claims for recognition and enforcement of recovery or bankruptcy judgments or decisions of foreign courts and authorities.

19. To perform other tasks and exercise other powers in accordance with law.

A panel of Judges, if established, shall perform the tasks and exercise the powers of Judges as specified in this Article. The Chief Justice of the Supreme People’s Court shall provide working regulations of panels of Judges in the course of determination of recovery or bankruptcy cases.

Article 8. Recusal or replacement of Judges in the course of determination of recovery or bankruptcy cases

1. A Judge is required to recuse participation in the determination of a recovery or bankruptcy case or shall be replaced in the following cases:

a/ He/she is also the person participating in recovery or bankruptcy procedures; or a representative or relative of the person participating in recovery or bankruptcy procedures in such recovery or bankruptcy case;

b/ He/she used to participate in such recovery or bankruptcy case as the procurator, asset management officer, defence counsel of the lawful rights and interests of the person participating in recovery or bankruptcy procedures, expert witness, price valuator or interpreter;

c/ He/she is a member of the same panel of Judges for the determination of such recovery or bankruptcy case and is a relative of another judge;

d/ He/she has issued a decision declaring bankruptcy in such recovery or bankruptcy case;

dd/ There are clear grounds to believe that he/she may lack impartiality or objectivity in task performance.

2. The replacement of a Judge shall be decided by the Chief Justice of the Court. In case the Judge in charge of the recovery or bankruptcy case is the Chief Justice of the Court, the replacement of the Judge shall be decided by the immediate superior People’s Court. The decision on replacement of the Judge is final.

Article 9. Individuals and enterprises practising asset management and liquidation

1. Individuals and enterprises entitled to practise asset management and liquidation in the course of the determination of recovery or bankruptcy cases include:

a/ Asset management officers;

b/ Asset management and liquidation enterprises.

2. The Government shall specify standards, conditions for practice, issuance and revocation of asset management officer or asset management and liquidation enterprise practice certificates; and state management of asset management officers or asset management and liquidation enterprises and asset management and liquidation practice activities.

3. The establishment and operation of socio-professional organisations of asset management officers and asset management enterprises must comply with law.

Article 10. Tasks and powers of asset management officers or asset management and liquidation enterprises

1. Tasks and powers of asset management officers or asset management and liquidation enterprises in recovery procedures:

a/ To verify, collect and manage documents and evidence relating to the operation of enterprises and cooperatives; to request Judges to take measures to examine and verify documents and evidence;

b/ To verify and update lists of creditors and debtors;

c/ To conduct mediation in accordance with this Law;

d/ To supervise business activities of enterprises and cooperatives; to supervise the formulation and implementation of business recovery plans of enterprises and cooperatives; to chair creditors’ meetings under decisions of Judges; to transfer enterprises and cooperatives under resolutions of creditors’ meetings;

dd/ To optimise the value of assets of enterprises and cooperatives when selling assets; to prevent the sale or handover of assets without permission of Judges; to prevent the dissipation of assets;

e/ To request the Court to declare transactions null and void, and decide to recover illegally sold or handed-over assets of enterprises and cooperatives; to request the Court to apply measures to handle administrative violations; to request the Court to propose competent agencies to impose criminal handling in accordance with law;

g/ To hire individuals or organisations to perform jobs in accordance with law;

h/ To receive remuneration and perform occupational insurance liability in accordance with law;

i/ To report on the performance of their tasks and the exercise of their powers at the request of Judges; to be held responsible before Judges and before law for the performance of their tasks and the exercise of their powers.

2. Tasks and powers of asset management officers or asset management and liquidation enterprises in bankruptcy procedures:

a/ The tasks and powers specified in Points a, c, d, e, g and h, Clause 1 of this Article;

b/ To prepare lists of creditors and debtors;

c/ To optimise the value of assets of enterprises and cooperatives when selling or liquidating assets; to manage and liquidate assets of enterprises and cooperatives; to prevent the sale or handover of assets without permission of Judges; to prevent the dissipation of assets. All collected amounts shall be remitted into accounts designated by the Court or civil judgment enforcement agencies;

d/ To request Judges to apply interim measures;

dd/ To propose to Judges the sale of assets of enterprises and cooperatives in order to cover bankruptcy costs and preserve assets of enterprises and cooperatives; to sell assets under decisions of Judges;

e/ To verify conditions for enforcement of bankruptcy declaration decisions; to organise the enforcement of bankruptcy declaration decisions in accordance with this Law, unless otherwise provided by law; to report to civil judgment enforcement agencies and notify related persons participating in bankruptcy procedures of the enforcement of bankruptcy declaration decisions;

g/ To request civil judgment enforcement agencies to apply coercive measures to recover and hand over assets in accordance with law;

h/ To represent enterprises and cooperatives in the settlement of disputes relating to the enterprises and cooperatives; in the recovery of assets from debtors; and in case enterprises or cooperatives have no legal representatives;

i/ To report on the performance of their tasks and the exercise of their powers at the request of Judges or civil judgment enforcement agencies; to be held responsible before Judges and civil judgment enforcement agencies and before law for the performance of their tasks and the exercise of their powers.

3. To perform other tasks and exercise other powers as specified by law or as decided by Judges.

Article 11. Appointment and replacement of asset management officers or asset management and liquidation enterprises

1. Within 3 working days after accepting a claim for the application of recovery or bankruptcy procedures, the Judge may, either on his/her own initiative or at the proposal of the enterprise or cooperative or the applicant, appoint an asset management officer or asset management and liquidation enterprise on the following grounds:

a/ The asset management officer or asset management and liquidation enterprise has no interests relating to the recovery or bankruptcy case;

b/ Nature of the recovery or bankruptcy case; and professional qualifications, capacity and experience of the asset management officer or asset management and liquidation enterprise;

c/ The asset management officer is not a relative of the person participating in recovery or bankruptcy procedures.

2. An asset management officer or asset management and liquidation enterprise is required to recuse participation in a recovery or bankruptcy case or shall be replaced in the following cases:

a/ The asset management officer or the asset management and liquidation enterprise has interests relating to the recovery or bankruptcy case;

b/ The asset management officer is a relative of the legal representative of the enterprise or cooperative;

c/ The asset management officer is also the person participating in recovery or bankruptcy procedures, or the representative or the defence counsel of the lawful rights and interests of the person participating in recovery or bankruptcy procedures;

d/ There are grounds to believe that the asset management officer or asset management and liquidation enterprise fails or is unable to perform his/her/its tasks and exercise his/her/its powers, or may lack impartiality or objectivity in task performance;

dd/ There are force majeure events that make the asset management officer or asset management and liquidation enterprise unable to perform his/her/its tasks.

Article 12. Tasks and powers of civil judgment enforcement agencies

1. To enforce decisions on the application of interim measures, decisions declaring transactions null and void, and other decisions in accordance with this Law.

2. To issue decisions on the enforcement of decisions declaring enterprises or cooperatives bankrupt, and request asset management officers or asset management and liquidation enterprises to organise the enforcement of such decisions.

3. To apply coercive measures to recover and hand over assets at the proposal of asset management officers or asset management and liquidation enterprises in the case specified in Clause 4, Article 76 of this Law.

4. To supervise activities of asset management officers or asset management and liquidation enterprises when executing decisions declaring enterprises or cooperatives bankrupt; to request asset management officers or asset management and liquidation enterprises to report on the execution of decisions declaring enterprises or cooperatives bankrupt.

5. To propose to the Court the replacement of asset management officers or asset management and liquidation enterprises in the course of liquidation of assets of bankrupt enterprises or cooperatives under Clause 2, Article 11 of this Law.

6. To divide assets of enterprises or cooperatives under court decisions.

7. To decide to finish the enforcement of decisions declaring enterprises or cooperatives bankrupt.

8. Other tasks and powers as specified by law.

Article 13. Rights and obligations of persons participating in recovery or bankruptcy procedures

1. To execute requests of Judges, asset management officers or asset management and liquidation enterprises, and civil judgment enforcement agencies in accordance with the law on recovery or bankruptcy.

2. To provide and submit documents and evidence relating to the determination of recovery or bankruptcy cases.

3. To request agencies, organisations and individuals currently keeping or managing documents and evidence to provide documents and evidence relating to their lawful rights and interests for submission to the Court.

4. To request the Court to provide assistance in collecting documents and evidence in case they are unable to do so though having taken all necessary measures.

5. To request Judges and asset management officers or asset management and liquidation enterprises to solicit expert assessment, conduct valuation or organise valuation; to request Judges to decide on auditing of enterprises and cooperatives; to request Judges to summon witnesses.

6. To access, record and copy documents and evidence produced by persons participating in recovery or bankruptcy procedures or collected by asset management officers or asset management and liquidation enterprises, except those relating to state secrets, professional secrets, business secrets, personal secrets or family secrets upon legitimate request of persons participating in bankruptcy procedures.

7. To request the application, change or cancellation of interim measures.

8. To receive valid documents and notices for exercising their rights and performing their obligations.

9. To defend by themselves their lawful rights and interests or authorise others to do so.

10. To attend creditors’ meetings.

11. To propose the appointment or replacement of asset management officers or asset management and liquidation enterprises under Article 11 of this Law.

12. To request asset management officers or asset management and liquidation enterprises to additionally include creditors and debtors in the lists of creditors and debtors.

13. To propose to asset management officers or asset management and liquidation enterprises the recovery of money amounts or assets from debtors.

14. To show up as required by asset management officers or asset management and liquidation enterprises or as summoned by the Court and abide by court decisions in the course of determination of recovery or bankruptcy cases.

15. To participate in asset management and liquidation as required by Judges, civil judgment enforcement agencies, and asset management officers or asset management and liquidation enterprises in the course of determination of recovery or bankruptcy cases.

16. To request review of court decisions in accordance with this Law.

17. To request the Court to apply fast-track recovery or bankruptcy procedures.

18. To act in good faith and honestly and respect commitments and agreements.

19. To refrain from committing acts of concealing or dissipating assets of enterprises and cooperatives; to refrain from abusing recovery or bankruptcy procedures to infringe upon lawful rights and interests of the State, agencies, organisations and individuals.

20. In case an individual participating in recovery or bankruptcy procedures dies, his/her lawful heir shall exercise his/her rights and perform his/her obligations in accordance with this Article.

21. Other rights and obligations as specified by law.

Article 14. Creditors’ representative boards

1. After accepting a claim for the application of recovery procedures or the commencement of bankruptcy procedures, the Court may decide to establish a creditors’ representative board, except cases to be determined according to fast-track procedures.

The creditors’ representative board shall be composed of no more than 5 members, including major creditors, and creditors representing major creditors of an enterprise or a cooperative.

2. Rights and obligations of the creditors’ representative board:

a/ To present opinions on the business recovery plan of the enterprise or cooperative;

b/ To request the asset management officer or asset management and liquidation enterprise to inspect the financial status of the enterprise or cooperative after the business recovery plan is recognised;

c/ To request copying of documents and evidence relating to the recovery or bankruptcy case, except those relating to state secrets, professional secrets, business secrets, personal secrets or family secrets, upon legitimate request of the person participating in recovery or bankruptcy procedures;

d/ To appoint its members as supervisors after obtaining approval from the Court;

dd/ To supervise, on behalf of creditors, activities of the enterprise or cooperative in accordance with this Law;

e/ Other rights and obligations as decided by the Judge and the creditors’ meeting.

3. The Supreme People’s Court shall detail and guide Clause 1 of this Article.

Article 15. Responsibilities and obligations of agencies, organisations and individuals related to recovery or bankruptcy cases

1. Agencies, organisations and individuals currently managing or keeping documents and evidence relating to recovery or bankruptcy cases shall fully and promptly provide such documents and evidence within 10 days after receiving a request from creditors, the enterprise or cooperative, the Court, the Procuracy, and the asset management officer or asset management and liquidation enterprise. If unable to do so, they shall issue a written reply, stating the reason.

The tax administration authority, the business registration agency and the social security agency shall, within 3 working days after receiving a request from the Court, provide information on the status of indebtedness and legal status and other information of the enterprise or cooperative in the course of determination of the recovery or bankruptcy case.

2. From the date the Court accepts a claim for the application of recovery procedures or decides to commence bankruptcy procedures, employees and related agencies, organisations and individuals may not commit acts of concealing or dissipating assets, documents or evidence of the enterprise or cooperative.

3. After receiving the Court’s decision declaring the enterprise or cooperative bankrupt, the credit institution where the enterprise or cooperative opens its account is prohibited from paying the debts of the enterprise or cooperative, unless the payment is approved in writing by the Court or civil judgment enforcement agency.

4. Related agencies, organisations and individuals shall execute requests of the Court and closely and promptly coordinate with the Court in the course of determining recovery or bankruptcy cases.

Agencies, organisations and individuals that fail to execute the Court’s requests without any plausible reason shall, depending on the nature and severity of their violations, be handled in accordance with law.

Article 16. Supervision of law compliance in the course of determination of recovery or bankruptcy cases

1. Procuracies shall supervise law compliance in the course of determination of recovery or bankruptcy cases, and exercise the rights to make requests, recommendations or protests in accordance with this Law.

2. Procuracies shall participate in meetings to settle disputes and consider protests; and supervise court decisions on the determination of recovery or bankruptcy cases in accordance with this Law.

Article 17. Issuance, service and notification of documents in recovery or bankruptcy cases

1. Persons carrying out recovery or bankruptcy procedures and competent persons shall carry out the issuance, service and notification of documents to persons participating in recovery or bankruptcy procedures in accordance with this Law, the civil procedure law and the law on e-transactions.

2. The issuance, service and notification of documents in the determination of recovery or bankruptcy cases shall be carried out by the following methods:

a/ By hand delivery;

b/ Via postal service;

c/ In the electronic environment;

d/ Notification in the mass media;

dd/ Through authorised persons;

e/ Other methods as specified by law.

3. Persons participating in recovery or bankruptcy procedures may choose and request persons carrying out recovery or bankruptcy procedures to carry out the issuance, service, notification and delivery of documents to the former by the methods specified in Clause 2 of this Article.

4. It shall be considered valid if persons carrying out recovery or bankruptcy procedures or competent persons have completed the issuance, service and notification by the methods specified in Clause 2 of this Article.

Article 18. Entrustment in the course of determination of recovery or bankruptcy cases

1. The Court currently in charge of determining a recovery or bankruptcy case may issue a decision to entrust another Court to recover assets, take statements of persons participating in recovery or bankruptcy procedures, carry out on-site appraisal or asset valuation, or take other measures to facilitate the collection, examination and verification of documents and evidence relating to the recovery or bankruptcy case.

2. An entrustment decision must contain information on persons participating in recovery or bankruptcy procedures relating to the entrustment, content of the entrustment and duration of the entrustment.

3. The Court receiving an entrustment decision shall implement it and notify in writing implementation results to the Court that issued such decision.

Article 19. Recovery or bankruptcy fee

Applicants claiming the application of recovery or bankruptcy procedures shall pay recovery or bankruptcy fee in accordance with the regulations on litigation costs and court fees and as notified by the Court. The applicants specified in Point b, Clause 1; and Clauses 3 and 4, Article 38; and Point c, Clause 1, Article 70, of this Law are not required to pay bankruptcy fee.

Article 20. Recovery or bankruptcy costs; advance payment of recovery or bankruptcy costs

1. Recovery or bankruptcy costs shall be paid from the value of assets of enterprises and cooperatives. In case an applicant claiming the application of recovery or bankruptcy procedures acts dishonestly or abuses recovery or bankruptcy procedures to infringe upon lawful rights and interests of agencies, organisations and individuals, he/she shall bear recovery or bankruptcy costs.

2. An applicant claiming the application of recovery or bankruptcy procedures shall make advance payment of recovery or bankruptcy costs, except the applicants specified in Point b, Clause 1; and Clauses 3 and 4, Article 38; and Point c, Clause 1, Article 70, of this Law.

3. The state budget shall cover funds for advance payment of costs for the cases specified in Point b, Clause 1; and Clauses 3 and 4, Article 38; and Point c, Clause 1, Article 70, of this Law.

4. The Judge shall decide on the levels of advance payment of recovery or bankruptcy costs; and the level of recovery or bankruptcy costs on a case-by-case basis in accordance with law, and decide on reimbursement of advance amounts, unless the applicant claiming the application of recovery or bankruptcy procedures acts dishonestly or abuses recovery or bankruptcy procedures to infringe upon lawful rights and interests of agencies, organisations and individuals and therefore shall bear recovery or bankruptcy costs, or in case the enterprise or cooperative has no money or asset left.

5. The Judge shall assign the asset management officer or asset management and liquidation enterprise to sell certain assets of the enterprise or cooperative to cover recovery or bankruptcy costs. The advance amounts of bankruptcy costs specified in Clause 3 of this Article shall immediately be reimbursed into the state budget.

In case the enterprise or cooperative has no money or asset left, bankruptcy costs shall be covered by the state budget.

The valuation, re-valuation and sale of assets must comply with Article 77 of this Law.

6. Funds for advance payment of bankruptcy costs, and bankruptcy costs specified in Clauses 3 and 5 of this Article shall be included in the Court’s annual state budget estimates. The estimation, management, use, advance payment and payment of funds must comply with the law on the state budget and the regulations on litigation costs.

7. Advance amounts of recovery or bankruptcy costs paid by applicants or the proceeds from the sale of assets of enterprises and cooperatives shall be deposited into bank accounts designated by the Court or civil judgment enforcement agencies to pay recovery or bankruptcy costs.

Article 21. Expenses for asset management officers or asset management and liquidation enterprises in recovery or bankruptcy cases

1. Expenses for asset management officers or asset management and liquidation enterprises shall be calculated based on time spent by, and efforts and performance of, asset management officers or asset management and liquidation enterprises.

2. The Government shall detail this Article.

Article 22. Negotiation and mediation

1. Enterprises, cooperatives, creditors and persons participating in recovery or bankruptcy procedures are encouraged to carry out negotiation and mediation in the course of determination of recovery or bankruptcy cases.

2. Asset management officers or asset management enterprises shall carry out mediation at the request of enterprises, cooperatives, creditors and other persons participating in recovery or bankruptcy procedures.

3. The Judge shall carry out mediation of a dispute relating to assets of an enterprise or a cooperative in bankruptcy procedures at the request of the person participating in bankruptcy procedures. In case the parties can reach agreement on dispute settlement, the Judge shall prepare a minutes of successful mediation and issue a decision recognising the agreement of the parties.

4. The Supreme People’s Court shall detail and guide Clauses 2 and 3 of this Article.

Article 23. Determination of recovery or bankruptcy cases in the electronic environment

1. In the course of determination of a recovery or bankruptcy case, the following procedures may be carried out in the electronic environment:

a/ Issuance, service and notification of documents;

b/ Filing of claims for the application of recovery or bankruptcy procedures;

c/ Payment of fee and advance payment of costs; payment of recovery or bankruptcy costs;

d/ Provision or submission of documents and evidence;

dd/ Holding of meetings to determine the recovery or bankruptcy case;

e/ Sale of assets and transfer of the enterprise and cooperative;

g/ Other activities as specified by law.

2. The determination of recovery or bankruptcy cases in the electronic environment must comply with law and guidance of the Supreme People’s Court.

3. The Supreme People’s Court shall detail and guide this Article.

Chapter II

RECOVERY PROCEDURES

Section 1

ACCEPTANCE OF CLAIMS

Article 24. Persons that may file claims for the application of recovery procedures

1. The following persons may file a claim for the application of recovery procedures when an enterprise or a cooperative is at risk of insolvency or becomes insolvent:

a/ The legal representative of the enterprise or cooperative;

b/ The Board of Directors, for joint stock companies; the Members’ Council, for limited liability companies with two or more members, or partnerships;

c/ The Members’ General Meeting of the cooperative;

d/ The owner, for sole proprietorships or single-member limited liability companies.

2. The Supreme People’s Court shall detail and guide this Article.

Article 25. Handling and acceptance of claims for the application of recovery procedures

1. An applicant claiming the application of recovery procedures shall submit the application, enclosed with a business recovery plan, a list of creditors and debtors, and supporting documents and evidence to prove that his/her application is grounded and lawful, to the competent Court specified in Article 6 of this Law.

The applicant shall be held responsible for the accuracy of the information on the list of creditors and debtors.

2. Within 3 working days after receiving a claim for the application of recovery procedures, the Chief Justice of the Court shall assign a Judge or a panel of Judges to settle the claim. Within 12 days after being assigned, the Judge shall examine the application and shall:

a/ Notify the payment of recovery fee and the advance payment of recovery costs;

b/ Notify the modification and supplementation of the claim;

c/ Notify the forwarding of the claim to a competent Court; or,

d/ Notify the return of the claim, for the cases specified in Clause 3 of this Article.

3. The Court shall return a claim for the application of recovery procedures in the following cases:

a/ The applicant is not a person that may file applications as specified in Article 24 of this Law;

b/ The applicant fails to modify and supplement the claim as specified in Point b, Clause 2 of this Article within the required time limit;

c/ The applicant withdraws the claim;

d/ The applicant fails to pay recovery fee or fails to make advance payment of recovery costs;

dd/ The applicant acts dishonestly when claiming the application of recovery procedures;

e/ Another Court has accepted the claim for the application of recovery procedures or bankruptcy procedures.

The notice of return of the claim for the application of recovery procedures mentioned in this Clause must clearly state the reason for the return. Within 3 working days after issuing the notice, the Court shall send it to the applicant and the Procuracy.

4. Within 3 working days after receiving the notice of return of the claim, the applicant may request review, and the Procuracy may make a recommendation to the Chief Justice of the Court that has issued the notice.

Within 3 working days after receiving the request for review of or the recommendation against the notice of return of the claim for the application of recovery procedures, the Chief Justice of the Court that has issued the notice shall issue:

a/ A decision to uphold the notice; or,

b/ A decision to cancel the notice and accept the claim in accordance with this Law.

The decision of the Chief Justice of the Court is final. This decision shall, within 3 working days after being issued, be sent to the applicant and the Procuracy that has made the recommendation.

5. The Court shall accept the claim when the enterprise or cooperative has paid recovery fee or made advance payment of recovery costs.

When necessary, before accepting the claim, the Judge may convene a meeting with the participation of the applicant and related agencies, organisations and individuals to consider and examine the grounds for claiming the application of recovery procedures.

6. A notice of acceptance of a claim shall be made in writing and sent to the applicant, the Procuracy, the civil judgment enforcement agency, and related agencies, organisations and individuals, and published on the National Portal on Recovery or Bankruptcy of Enterprises and Cooperatives within 3 working days after the Court accepts the claim.

7. The Supreme People’s Court shall detail and guide this Article.

Article 26. Verification of a list of creditors and debtors

1. The asset management officer or asset management and liquidation enterprise shall examine, summarise, check and collate the list of creditors and debtors and report thereon to the Judge.

2. When necessary, the Court may summon the person participating in recovery procedures to verify the list of creditors and debtors or request the enterprise or cooperative to modify and supplement such list.

Article 27. Suspension or temporary cessation of the settlement of requests for enterprises or cooperatives to perform their property obligations

Within 5 working days after receiving the Court’s notice of acceptance of a claim for the application of recovery procedures, the suspension or temporary cessation of the performance of property obligations of an enterprise or a cooperative is as follows:

1. The civil judgment enforcement agency shall suspend the enforcement of the civil judgment for assets for which the enterprise or cooperative is the judgment debtor, except the following judgments and decisions:

a/ The judgment or decision compelling the enterprise or cooperative to pay compensation for life, health or honour or severance allowance, or to pay wages to employees;

b/ The decision on distraint of assets of the enterprise or cooperative for confiscation into the state fund;

c/ The judgment or decision compelling the enterprise or cooperative to perform obligations secured by assets of a third party;

d/ Other cases as specified by law.

The suspension must comply with the law on civil judgment enforcement. The civil judgment enforcement agency shall promptly notify results of the enforcement of the judgment or decision specified in this Clause to the Court currently in charge of carrying out recovery procedures for determining the property obligations of the enterprise or cooperative, and update the list of creditors and debtors;

2. Other competent agencies or organisations as defined by law shall temporarily cease the disposal of collateral of the enterprise or cooperative for secured creditors, unless otherwise provided by law.

The Government shall detail this Clause;

3. In case the collateral is used for implementation of the business recovery plan, the time limit for disposal of collateral must comply with the resolution of the creditors’ meeting. In case the collateral is not used for implementation of the business recovery plan, collateral shall be disposed of within the time limit stated in the contract. The disposal of collateral must comply with Clauses 2 and 3, Article 44 of this Law;

4. Competent agencies or organisations as defined by law shall temporarily cease coercion and debt recovery measures and other measures compelling enterprises or cooperatives to perform their property obligations.

Section 2

OPERATION OF ENTERPRISES AND COOPERATIVES AFTER THE COURT’S ACCEPTANCE OF CLAIMS

Article 28. Business recovery plans

1. The business recovery plan of an enterprise or a cooperative must clearly that business recovery measures are not contrary to law; and must state conditions, time limit and plan for debt payment.

2. A debt payment plan must follow the order of priority for payment below:

a/ Recovery costs;

b/ Unpaid amounts of wages, compulsory social insurance, unemployment insurance, health insurance, and occupational accident and disease insurance premiums; severance allowances and other benefits of employees under signed collective labour agreements or labour contracts;

c/ Arising debts for the purpose of recovery of business activities of the enterprise or cooperative;

d/ Secured debts;

dd/ Other debts.

3. Within 30 days from the date of acceptance of the claim for the application of recovery procedures, the enterprise or cooperative shall finalise the business recovery plan for the asset management officer or asset management and liquidation enterprise to report it to the Judge.

Article 29. Duration of implementation of business recovery plans

1. The duration of implementation of the business recovery plan of an enterprise or a cooperative must comply with the resolution of the creditors’ meeting approving the business recovery plan.

2. In case the creditors’ meeting cannot determine the duration of implementation of the business recovery plan of the enterprise or cooperative, such duration must not exceed 3 years from the date the creditors’ meeting approves the business recovery plan.

3. The State’s support policies for the enterprise or cooperative undergoing recovery shall be applied for the duration of implementation of the business recovery plan but must not exceed 3 years from the date the creditors’ meeting approves such plan, except the case specified in Clause 3, Article 30 of this Law and unless otherwise provided by law.

Article 30. Business activities of an enterprise or a cooperative after the Court’s acceptance of a claim

1. After the Court accepts the claim, the enterprise or cooperative may continue its business activities but shall be subject to supervision by the asset management officer or asset management and liquidation enterprise and the creditors’ representative board.

2. When the legal representative of the enterprise or cooperative is deemed incapable of managing the enterprise or cooperative or in case the enterprise or cooperative shows signs of violating Article 31 of this Law, the Judge may consider and decide to appoint another person as the legal representative of the enterprise or cooperative at the proposal of the creditors’ representative board, the asset management officer or asset management and liquidation enterprise, the persons specified in Points b, c and d, Clause 1, Article 24 of this Law, and the creditors’ meeting, or when deeming it necessary.

The Government shall specify the replacement of legal representatives of state-invested enterprises.

3. From the date of acceptance of the claim for the application of recovery procedures, the enterprise or cooperative is entitled to tax debt deferral at the proposal of the Court, and may temporarily cease making contributions to the retirement and survivorship fund. The duration of the deferral and temporary cessation must comply with the law on tax administration and the law on social insurance.

4. The payment of debts arising before the acceptance of the claim for the application of recovery procedures shall be temporarily ceased from the time of acceptance of such claim until the Court recognises the business recovery plan or terminates business recovery procedures, except cases of payment of necessary expenses to maintain the operation of the enterprise or cooperative as decided by the Judge.

5. From the date of acceptance of the claim, interest on debts continue to accrue but the payment thereof may be temporarily ceased until the Court recognises the business recovery plan or terminates business recovery procedures, except the case specified in Clause 6 of this Article or unless otherwise provided by law.

6. The interest on a debt arising after the Court accepts the claim for the recovery of the enterprise or cooperative shall be determined as agreed upon but must not contravene law.

7. The transfer of the whole of assets or the transfer of part or the whole of a business line or business activities; or the transfer of part or the whole of an enterprise or a cooperative shall be considered and decided by the creditors’ meeting. The order, procedures and conditions for asset transfer must comply with law.

Article 31. Prohibited activities of an enterprise or a cooperative after the Court’s acceptance of a claim

1. After the Court accepts the claim, the enterprise or cooperative may not:

a/ Conceal, dissipate or donate assets;

b/ Waive the right to claim debts;

c/ Pay debts arising before the Court accepts the claim;

d/ Convert unsecured debts into debts secured or partially secured by assets of the enterprise or cooperative;

dd/ Divide profits or distribute incomes.

2. The activities specified in Points c, d and dd, Clause 1 of this Article may be carried out in case it is otherwise provided by this Law and other laws or as permitted by the Judge.

Article 32. Supervision of activities of an enterprise or a cooperative after the Court’s acceptance of a claim

1. After the Court accepts the claim, the enterprise or cooperative shall report to the asset management officer or asset management and liquidation enterprise for supervision before carrying out the following activities:

a/ Activities relating to borrowing; mortgage, pledge, guarantee and other security measures for obligation performance; purchasing and selling, transferring or leasing assets; selling or transferring shares or capital contributions; or transferring asset ownership;

b/ Terminating the performance of contracts currently in effect;

c/ Paying debts arising after the Court’s acceptance of the claim and amounts used to pay wages to employees of the enterprise or cooperative;

d/ Conducting other transactions contrary to the interests of the enterprise or cooperative.

2. The asset management officer or asset management and liquidation enterprise shall report on supervision contents to the Judge.

Section 3

CREDITORS’ MEETINGS

Article 33. Creditors’ meetings

1. Within 5 working days after receiving the business recovery plan, the Judge shall consider and decide to convene a creditors’ meeting to decide on the matters specified in Points a, b and c, Clause 7 of this Article.

2. The Judge may also convene a creditors’ meeting to consider and decide on the following matters:

a/ Transfer of the whole of assets or the transfer of part or the whole of a business line or business activities; or the transfer of part or the whole of an enterprise or a cooperative;

b/ Proposal for handling property obligations of the enterprise or cooperative in case of suspension or temporary cessation specified in Article 27 of this Law;

c/ Other related matters.

3. The following persons may participate in the creditors’ meeting:

a/ Creditors on the list of creditors. A creditor may authorise in writing another person to participate in the creditors’ meeting.

A creditor who does not participate in the creditors’ meeting but sends his/her written opinions to the Judge before the date of the creditors’ meeting shall be considered participating in and voting at the meeting;

b/ Representatives of employees, the trade union, and the employees’ organisation at the enterprise as authorised by employees. In this case, such representatives, trade union and organisation have the same rights and obligations as creditors.

4. The following persons are obliged to participate in the creditors’ meeting:

a/ The applicant claiming the application of recovery procedures as specified in Article 24 of this Law, and the legal representative of the enterprise or cooperative; if unable to participate in the meeting, these persons shall authorise in writing other persons to participate in the meeting;

b/ The asset management officer or asset management and liquidation enterprise.

5. The asset management officer shall chair the creditors’ meeting.

6. A resolution of the creditors’ meeting shall be adopted when it is approved by the voting creditors representing 65% or more of total debts. Such resolution is binding on all creditors.

Creditors participating in the creditors’ meeting shall be held responsible for the legality of the resolution of the creditors’ meeting.

7. The creditors’ meeting may adopt a resolution containing one of the following conclusions:

a/ Approval of the business recovery plan for the enterprise or cooperative;

b/ Proposal for the termination of recovery procedures;

c/ Proposal for the application of bankruptcy procedures in case the enterprise or cooperative becomes insolvent, which must have the content on the obligation to make advance payment of bankruptcy costs;

d/ The matters specified in Clause 2 of this Article.

8. Within 3 working days from the date of the creditors’ meeting, the Court shall send the resolution of the creditors’ meeting to the Procuracy and the persons having the right and obligation to participate in the creditors’ meeting.

Article 34. Consideration and recognition of resolutions of creditors’ meetings

1. Within 7 days from the date of adoption of the resolution of the creditors’ meeting approving the business recovery plan, the Judge shall issue:

a/ A decision to recognise the resolution of the creditors’ meeting. Such resolution takes effect on the date the Judge issues the recognition decision; or,

b/ A decision not to recognise the resolution of the creditors’ meeting and to terminate recovery procedures in case such resolution contains provisions that violate prohibitions specified by law.

2. From the effective date of the resolution of the creditors’ meeting approving the business recovery plan, the prohibitive and supervisory measures previously applied to the enterprise or cooperative under Articles 31 and 32 of this Law shall automatically terminate.

3. The decision specified in Clause 1 of this Article shall, within 3 working days after being issued, be sent to the Procuracy and the persons having the right and obligation to participate in the creditors’ meeting.

4. Within 5 working days from the date of adoption of the resolution of the creditors’ meeting proposing the application of bankruptcy procedures under Point c, Clause 7, Article 33 of this Law, the Judge shall consider and request the person obliged to make advance payment of bankruptcy costs to make the advance payment, and shall, on a case-by-case basis, handle the case as follows:

a/ In case the obligor fails to make the advance payment of bankruptcy costs, the Judge shall issue a decision to terminate recovery procedures and not to apply bankruptcy procedures, unless the enterprise or cooperative has no assets left to make the advance payment and, therefore, the Court shall issue a decision declaring the enterprise or cooperative bankrupt according to fast-track procedures;

b/ If the obligor has made the advance payment of bankruptcy costs, the Judge shall issue a decision to terminate recovery procedures and accept the bankruptcy case.

Section 4

IMPLEMENTATION OF BUSINESS RECOVERY PLANS

Article 35. Supervision of implementation of business recovery plans

1. After the Judge issues a decision recognising the resolution of the creditors’ meeting approving the business recovery plan of an enterprise or a cooperative, the asset management officer or asset management and liquidation enterprise, and the creditors’ representative board or the creditors shall supervise business activities of the enterprise or cooperative.

2. Once every 3 months, the enterprise or cooperative shall submit a report on implementation of the business recovery plan to the asset management officer or asset management and liquidation enterprise, and the creditors’ representative board or the creditors. The asset management officer or asset management and liquidation enterprise shall report to the Judge.

Article 36. Modification and supplementation of business recovery plans

1. In the course of implementation of the business recovery plan of an enterprise or a cooperative, creditors and the enterprise or cooperative may reach agreement on the modification and supplementation of such plan.

2. A resolution on the modification and supplementation of the business recovery plan shall be adopted when it is approved by the voting creditors representing 65% or more of total debts.

3. The asset management officer or asset management and liquidation enterprise shall submit a written request to the Judge for the latter to issue a decision recognising the resolution on the modification and supplementation of the business recovery plan. The recognition decision shall, within 3 working days after being issued, be sent to the enterprise or cooperative, the creditors and the asset management officer.

Article 37. Termination, and consequences of termination, of recovery procedures

1. The Judge shall decide to terminate recovery procedures in one of the following cases:

a/ The applicant withdraws the claim after it is accepted and before the creditors’ meeting approves the business recovery plan;

b/ The creditors’ meeting cannot adopt a resolution as specified in Point a, b or c, Clause 7, Article 33 of this Law;

c/ The resolution of the creditors’ meeting requests the termination of recovery procedures;

d/ The Judge does not recognise the resolution of the creditors’ meeting;

dd/ The enterprise or cooperative fails to finalise or fails to implement the business recovery plan;

e/ The business recovery plan is not completed though the duration of implementation thereof has expired;

g/ The enterprise or cooperative has completed the business recovery plan;

h/ The enterprise or cooperative no longer faces the risk of insolvency or becomes insolvent;

i/ Other cases as specified by law.

2. Within 3 working days after issuing the decision on termination of recovery procedures, the Court shall send the decision to the persons participating in recovery procedures, the asset management officer or asset management and liquidation enterprise, the Procuracy, the civil judgment enforcement agency, and related agencies and organisations.

3. Consequences of the termination of recovery procedures:

a/ Upon the issuance of the decision on termination of recovery procedures, the tasks and powers of the asset management officer or asset management and liquidation enterprise no longer exist; the remainder of the advance amount of recovery costs shall be refunded;

b/ The prohibitive and supervisory measures previously applied to the enterprise or cooperative under Articles 31, 32 and 35 of this Law cease to be applied. In case of termination of recovery procedures under Point b, Clause 4, Article 34 of this Law, the prohibitive and supervisory measures for the enterprise or cooperative must comply with Article 42 of this Law;

c/ In case no payment has been made for the property obligations that were suspended or temporarily ceased, the Court shall notify the civil judgment enforcement agency and the competent agency or organisation that has issued the decision on such suspension or temporary cessation for the latter to issue a decision to resume judgment enforcement and take measures to compel the enterprise or cooperative to perform property obligations;

d/ In case payment has been made for property obligations that were suspended or temporarily ceased, the Court shall notify the civil judgment enforcement agency and the competent agency or organisation for the latter to issue a decision to terminate judgment enforcement and stop taking measures to compel the enterprise or cooperative to perform property obligations.

4. In case of termination of recovery procedures under Point d, Clause 1 of this Article, within 10 days after receiving the decision on termination of recovery procedures, the person participating in the recovery procedures may request review of, and the Procuracy may make a recommendation against, such decision with the Chief Justice of the Court currently in charge of settling set recovery procedures.

5. Within 3 working days after receiving the request for review or receiving the recommendation specified in Clause 4 of this Article, the Chief Justice of the Court shall consider and issue:

a/ A decision to uphold the decision on termination of recovery procedures;

b/ A decision to annul the decision on termination of recovery procedures and assign the Judge to proceed with recovery procedures.

6. The decision on settlement of the request for review of, or the recommendation against, the decision on termination of recovery procedures shall, within 3 working days after being issued, be sent to the applicant, the enterprise or cooperative and other related persons.

Chapter III

BANKRUPTCY PROCEDURES

Section 1

ACCEPTANCE OF CLAIMS

Article 38. Persons entitled or obliged to submit claims for the application of bankruptcy procedures

1. The following persons are entitled to submit a claim for the application of bankruptcy procedures when an enterprise or a cooperative becomes insolvent:

a/ Unsecured creditors and partially secured creditors;

b/ Employees and the trade union, in case the enterprise or cooperative fails to perform the payment obligation upon the expiration of the 6-month time limit from the date it is obliged to pay wages and other due debts to employees;

c/ Shareholders or groups of shareholders holding 20% or more of total common shares, or a lower rate as stated in the company charter;

d/ Members or groups of members holding 65% or more of total charter capital, for limited liability companies with two or more members, or a lower rate as stated in the company charter;

dd/ Members of a cooperative or the legal representative of a member cooperative of a union of cooperatives.

2. The following persons are obliged to submit a claim for the application of bankruptcy procedures when an enterprise or a cooperative becomes insolvent, unless a claim for the application of recovery procedures has been submitted:

a/ The legal representative of the enterprise or cooperative;

b/ The Board of Directors, for joint stock companies, or the Members’ Council, for limited liability companies with two or more members, or partnerships;

c/ The Members’ General Meeting, for cooperatives;

d/ The owner, for sole proprietorships or single-member limited liability companies.

3. Tax administration authorities shall submit claims for the application of bankruptcy procedures for enterprises and cooperatives in accordance with the Law on Tax Administration.

The Government shall specify conditions for submitting claims for the application of bankruptcy procedures.

4. Social security agencies are entitled to submit claims for the application of bankruptcy procedures for enterprises or cooperatives in case they have issued notices to urge the payment of late-paid or evaded amounts of compulsory social insurance, unemployment insurance or health insurance premiums without receiving any response for the last 3 consecutive years in accordance with the laws on social insurance, unemployment insurance and health insurance.

5. Individuals, agencies and organisations specified in Clauses 2 and 3 of this Article that fail to submit claims for the application of bankruptcy procedures shall be held responsible before law. In case a person specified in Clause 2 of this Article fails to submit a claim for the application of bankruptcy procedures for an enterprise or a cooperative and consequently causes damage after the enterprise or cooperative becomes insolvent, he/she shall pay compensation.

6. The Supreme People’s Court shall detail and guide Clause 2 of this Article.

Article 39. Processing and acceptance of claims for the application of bankruptcy procedures

1. Persons entitled or obliged to submit claims for the application of bankruptcy procedures shall submit claims, lists of creditors and debtors (if any), and supporting documents and evidence to prove that their claims are grounded and lawful, to the competent Court specified in Article 6 of this Law.

2. Within 2 working days after receiving a claim for the application of bankruptcy from an applicant specified in Article 38 of this Law, the Chief Justice of the Court shall assign a Judge or a panel of Judges to settle the claim. Within 2 working days after being assigned, the Judge shall notify thereof to the enterprise or cooperative subject to the application of bankruptcy procedures.

Within 5 working days from the date of notification, the enterprise or cooperative shall give its written opinions on the claim for the application of bankruptcy procedures and accompanying documents and evidence. Within 7 days from the date of notification, the Judge shall consider and:

a/ Request the payment of bankruptcy fee and the advance payment of bankruptcy costs, unless such payment is not required;

b/ Request the claim to be modified or supplemented;

c/ Forward the claim to the competent Court;

d/ Return the claim, in the cases specified in Clause 3 of this Article.

3. The Court shall decide to return a claim for the application of bankruptcy procedures in the following cases:

a/ The applicant is not one entitled or obliged to submit claims as specified in Article 38 of this Law;

b/ The applicant fails to modify or supplement the claim under Point b, Clause 2 of this Article within the law-specified time limit;

c/ Another Court has accepted the claim for the application of recovery procedures or bankruptcy procedures;

d/ The applicant withdraws the claim;

dd/ The applicant fails to pay bankruptcy fee and advance amounts of bankruptcy costs, unless such payment is not required.

A notice of return of the claim for the application of bankruptcy procedures specified in this Clause must clearly state the reason for the return. The Court shall send such notice to the applicant and the same-level People’s Procuracy within 3 working days from the date of notification.

4. Within 3 working days after receiving the notice of return of the claim, the applicant may request a review, and the Procuracy may make a recommendation to the Chief Justice of the Court that has issued the notice.

Within 3 working days after receiving the request for review of, or the recommendation against, the notice of return of the claim, the Chief Justice of the Court that has issued the notice shall issue:

a/ A decision upholding the notice of return of the claim; or,

b/ A decision annulling the notice of return of the claim and accept the claim in accordance with this Law.

The decision of the Chief Justice of the competent Court specified in this Clause is final. This decision shall, within 3 working days after being issued, be sent to the applicant and the Procuracy that has made the recommendation.

5. The Court shall accept the claim when having grounds to confirm that the bankruptcy fee and advance amounts of bankruptcy costs have been paid, unless such payment is not required.

6. A notice of the processing and acceptance of a claim for the application of bankruptcy procedures shall be made in writing and sent to the applicant, the enterprise or cooperative, agencies and organisations currently in charge of determining the case related to the enterprise or cooperative, creditors as notified by the parties, and the Procuracy.

7. In case the Court accepts a bankruptcy case under Clause 4, Article 34 of this Law, documents and evidence collected during the application of recovery procedures shall be used in the settlement of bankruptcy procedures.

8. The Supreme People’s Court shall detail and guide this Article.

Article 40. Suspension or temporary cessation of the settlement of requests for the performance of property obligations by enterprises or cooperatives

Within 5 working days after the receipt of the Court’s notice of the acceptance of a claim for the application of bankruptcy procedures, the suspension of the performance of property obligations by an enterprise or a cooperative is specified as follows:

1. The civil judgment enforcement agency shall suspend the enforcement of civil judgments concerning property for which the enterprise or cooperative is the judgment debtor, except the following judgments or decisions:

a/ The judgment or decision compelling the enterprise or cooperative to pay compensation for loss of life, health or honour, or to pay severance allowance or wages to employees;

b/ The decision on distraint of property of the enterprise or cooperative for confiscation into the state fund;

c/ The judgment or decision relating to property of a third party used to secure obligations of the enterprise or cooperative;

d/ Other cases as specified by law.

The suspension must comply with the law on civil judgment enforcement. The civil judgment enforcement agency shall promptly notify the enforcement of judgments or decisions specified in this Clause to the Court that has accepted the bankruptcy case;

2. The Court or Arbitration shall suspend the settlement of a civil, business, commercial or labour case involving property obligations to which an enterprise or a cooperative is a party. Procedures for suspension must comply with the civil procedure law and the law on commercial arbitration.

The Court shall separate and suspend the settlement of the civil component of a criminal or administrative case involving property obligations to which an enterprise or a cooperative is a party. Procedures for the separation and suspension must comply with the criminal procedure law and the administrative procedure law;

3. Other competent agencies and organisations as specified by law shall temporarily cease the handling of collateral of enterprises or cooperatives for secured creditors, unless otherwise specified by law.

The Government shall detail this Clause;

4. In case collateral is at risk of being destroyed or substantially diminished in value, it shall be handled under Clauses 2 and 3, Article 44 of this Law;

5. Competent agencies and organisations as specified by law shall temporarily cease enforcement and debt recovery measures and other measures aimed at compelling enterprises or cooperatives to perform their property obligations.

Section 2

COMMENCEMENT OF BANKRUPTCY PROCEDURES

Article 41. Decisions to commence or not to commence bankruptcy procedures

1. Within 30 days after accepting a claim for the application of bankruptcy procedures, the Judge shall issue a decision to commence or not to commence bankruptcy procedures.

2. A decision to commence or not to commence bankruptcy procedures takes effect from the date of its issuance.

3. The People’s Court’s decision to commence or not to commence bankruptcy procedures shall, within 3 working days after being issued, be sent to the applicant, the enterprise or cooperative, the creditors, the same-level People’s Procuracy, the civil judgment enforcement agency, the tax administration authority, the business registration agency, and related agencies, organisations and individuals.

4. Within 10 days after receiving the decision to commence or not to commence bankruptcy procedures, persons participating in bankruptcy procedures may request a review of, and the same-level People’s Procuracy may make a recommendation against, such decision.

5. Within 10 days after receiving the request for review or the recommendation, the Chief Justice of the Court shall consider and:

a/ Uphold the decision to commence or not to commence bankruptcy procedures;

b/ Annul the decision to commence bankruptcy procedures or the decision not to commence bankruptcy procedures, and issue a decision not to commence bankruptcy procedures or a decision to commence bankruptcy procedures;

c/ Annul the decision to commence bankruptcy procedures or the decision not to commence bankruptcy procedures, and terminate the performance of bankruptcy procedures;

d/ Terminate the settlement of the request for review of, or the recommendation against, the decision to commence or not to commence bankruptcy procedures in case the applicant withdraws the request or the Procuracy withdraws the recommendation.

6. The decision of the Chief Justice of the Court specified in Clause 5 of this Article is final and effective for implementation. The decisions specified in Clauses 3 and 5 of this Article shall be published on the National Portal on Recovery and Bankruptcy of Enterprises and Cooperatives.

Article 42. Operation and supervision of operation of enterprises and cooperatives after issuance of decisions to commence bankruptcy procedures

1. After the issuance of a decision to commence bankruptcy procedures, the business activities of an enterprise or a cooperative shall be conducted in accordance with Clause 1, Article 30 of this Law. In case the legal representative of the enterprise or cooperative is deemed incapable of managing the business activities, or in case the enterprise or cooperative shows signs of violating Clause 2 of this Article, the Judge shall issue a decision to replace the legal representative of such enterprise or cooperative at the proposal of the creditors’ representative board, the creditors’ meeting, the asset management officer or asset management and liquidation enterprise, or the persons specified in Points b, c and d, Clause 2, Article 38 of this Law.

2. After the issuance of a decision to commence bankruptcy procedures, the enterprise or cooperative shall be prohibited from:

a/ Concealing, dissipating or donating assets;

b/ Waiving the right to claim debts;

c/ Paying unsecured debts, except those arising after the commencement of bankruptcy procedures and amounts used to pay wages to employees of the enterprise or cooperative;

d/ Converting unsecured debts into debts secured or partially secured by assets of the enterprise or cooperative;

dd/ Dividing profits or distributing incomes.

3. After the issuance of a decision to commence bankruptcy procedures, the enterprise or cooperative shall report to the asset management officer or asset management and liquidation enterprise, and the creditors’ representative board before conducting any activities specified in Clause 1, Article 32 of this Law. The asset management officer or asset management and liquidation enterprise shall report to the Judge on contents of the supervision.

4. The transfer of the whole of assets; the transfer of part or the whole of a business line or business activities; or the transfer of part or the whole of an enterprise or a cooperative shall be considered and decided by the creditors’ meeting. The order, procedures and conditions for asset transfer must comply with law.

5. The Government shall detail this Article.

Article 43. Determination of interests on debts of enterprises or cooperatives

1. From the date of issuance of a decision to commence bankruptcy procedures, interests on debts shall continue to accrue as agreed but the payment thereof may be suspended, unless otherwise specified by law.

In case the Judge issues a decision to terminate bankruptcy procedures under Article 64 of this Law, the suspension of interest payment shall cease, and the parties shall resume interest payment as agreed.

2. For a debt arising after the commencement of bankruptcy procedures up to the time the enterprise or cooperative is declared bankrupt, the interest thereon shall be determined as agreed but must not contravene law.

3. From the date of issuance of a decision declaring the enterprise or cooperative bankrupt, interests shall no longer accrue on debts.

Article 44. Settlement of secured debts

1. After the commencement of bankruptcy procedures, the asset management officer or asset management and liquidation enterprise shall propose to the Judge the settlement of secured debts as follows:

a/ In case collateral is used to implement the business recovery plan, the handling of such collateral under the resolution of the creditors’ meeting shall only be carried out with the consent of the creditor holding such collateral;

b/ In case the business recovery plan is not implemented or the collateral is not necessary for the implementation of the business recovery plan, the collateral shall be handled within the time limit stated in the contract, for security contracts that have become due. For security contracts that have not yet become due, upon declaring the enterprise or cooperative bankrupt, the Judge shall terminate the contract and settle secured debts. The secured debts shall be settled under Clause 2 of this Article. The provisions of this Point do not apply to the case specified in Clause 4, Article 42 of this Law.

2. The handling of collateral shall be carried out as follows:

a/ Secured debts arising before the Court accepts the claim for the application of bankruptcy procedures shall be paid with collateral;

b/ If the value of the collateral is insufficient to pay the debt, the remaining debt amount shall become an unsecured debt of the enterprise or cooperative; if the value of the collateral is larger than the debt, the difference shall be included in the value of assets of the enterprise or cooperative.

3. In case the collateral is at risk of being destroyed or substantially diminished in value, the asset management officer or asset management and liquidation enterprise shall request the Judge to permit the immediate handling of such collateral in accordance with Clause 2 of this Article.

4. Asset management officers or asset management and liquidation enterprises shall propose to Judges the handling of collateral specified in this Article in accordance with law and guidance of the Supreme People’s Court.

5. The Supreme People’s Court shall detail and guide this Article.

Article 45. Property obligations in case of joint liability or guarantee

1. In case multiple enterprises or cooperatives are jointly liable for a debt and one or all of such enterprises or cooperatives become(s) insolvent, the creditor has the right to request any of such enterprises or cooperatives to pay the debt in accordance with law.

2. In case the guarantor becomes insolvent, the guarantee shall be settled as follows:

a/ If the guarantee obligation arises, the guarantor shall perform the guarantee obligation. If the guarantor fails to make full payment within the scope of guarantee, the beneficiary may request the guaranteed to pay the deficit;

b/ If the guarantee obligation has not yet arisen, the guaranteed shall replace it with another security interest, unless otherwise agreed upon by the guaranteed and the beneficiary.

3. In case the guaranteed or both the guarantor and the guaranteed become(s) insolvent, the guarantor shall bear liability on behalf of the guaranteed in accordance with law.

Article 46. Order of division of assets

1. In case the Judge issues a decision declaring an enterprise or a cooperative bankrupt, assets of the enterprise or cooperative shall be divided in the following order of priority:

a/ Bankruptcy costs;

b/ Unpaid amounts of wages;

c/ Unpaid amounts of compulsory social insurance, unemployment insurance, health insurance, and occupational accident and disease insurance premiums;

d/ Severance allowances and other benefits of employees under collective labour agreements or labour contracts;

dd/ Debts arising for the purpose of restoring business activities of the enterprise or cooperative;

e/ Financial obligations towards the State;

g/ Unsecured debts payable to creditors on the list of creditors; secured debts remaining unpaid for the reason that the value of collateral is insufficient to pay the debts.

2. In case the value of assets of the enterprise or cooperative remains positive after full payment of the amounts specified in Clause 1 of this Article, it shall belong to:

a/ Members of the cooperative or member cooperative;

b/ The owner, for sole proprietorships;

c/ The owner, for single-member limited liability companies;

d/ Members, for limited liability companies with two or more members, or shareholders, for joint stock companies;

dd/ General partners, for partnerships.

3. In case the value of assets of the enterprise or cooperative is insufficient to make payment as specified in Clause 1 of this Article, each subject of the same priority rank shall receive payments in proportion to the percentage of their respective debts.

Article 47. Return of assets received as security

Enterprises or cooperatives shall only return assets received as security to individuals or organisations that have handed over such assets to the enterprises or cooperatives to secure the performance of their obligations towards the enterprises or cooperatives before the Court commences bankruptcy procedures, provided that such individuals or organisations have performed their obligations towards the enterprises or cooperatives.

Article 48. Reclamation of sold goods

In case the seller has consigned goods to the buyer being an enterprise or a cooperative but has not yet received payment, and the buyer has not yet received the goods, the seller may reclaim the goods. If the enterprise or cooperative has received the goods and cannot return them, the seller shall become an unsecured creditor.

Article 49. Transactions deemed null and void

1. Unless otherwise specified by this Law, a transaction of an enterprise or a cooperative entered into within 6 months before the Court issues a decision to commence bankruptcy procedures shall be deemed null and void if it falls into one of the following cases:

a/ It is related to the transfer of an asset not at a market price;

b/ It involves the conversion of an unsecured debt into a debt secured or partially secured by assets of the enterprise or cooperative;

c/ It involves the payment or clearing made to the benefit of a single creditor, for an undue debt, or in an amount greater than a due debt, unless otherwise specified by law;

d/ It involves the donation of an asset;

dd/ It is entered into not for the purpose of seeking profits for the enterprise or cooperative;

e/ It is another transaction conducted for the purpose of dissipating assets of the enterprise or cooperative.

2. Transactions of the enterprise or cooperative specified in Clause 1 of this Article conducted with its affiliated persons within 18 months before the Court issues a decision to commence bankruptcy procedures shall be deemed null and void.

3. Affiliated persons specified in Clause 2 of this Article shall be identified in accordance with law and guidance of the Supreme People’s Court.

4. Asset management officers or asset management and liquidation enterprises shall review transactions of enterprises or cooperatives; if any transaction specified in Clauses 1 and 2 of this Article is discovered, they shall request the Court to consider declaring such transaction null and void.

5. The Supreme People’s Court shall detail and guide this Article, except the case specified in Point c, Clause 1 of this Article.

6. The Government shall detail Point c, Clause 1 of this Article.

Article 50. Declaration of null and void transactions

1. Within 10 days after the asset management officer or asset management and liquidation enterprise or the person participating in bankruptcy procedures requests a transaction to be declared null and void, or when the Judge currently in charge of determining a bankruptcy case discovers a transaction specified in Clause 2, Article 42; or Clauses 1 and 2, Article 49, of this Law, the Judge shall convene a meeting to consider declaring the transaction null and void.

The order and procedures for, and participants in, such a meeting must comply with Clauses 2 and 3, Article 60 of this Law.

2. When considering to declare a transaction null and void, the Judge shall issue:

a/ A decision rejecting the request for declaring the transaction null and void; or,

b/ A decision declaring the transaction null and void, annulling security interests, and remedying consequences of the null and void transaction in accordance with law.

3. A decision declaring a transaction null and void takes effect on the date it is issued.

4. Within 5 working days after receiving a decision specified in Clause 2 of this Article, the enterprise or cooperative, the asset management officer or asset management and liquidation enterprise, or the person participating in bankruptcy procedures may request in writing the Chief Justice of the Court to review such decision.

5. Within 5 working days after receiving the request for review, the Chief Justice of the Court that has issued the decision shall issue:

a/ A decision rejecting the request for review;

b/ A decision annulling the decision declaring the transaction null and void. Any dispute shall be resolved under Clause 2, Article 60 of this Law; or,

c/ A decision annulling the decision rejecting the request to declare the transaction null and void and issuing a decision declaring the transaction null and void.

6. Within 15 days after receiving a decision specified in Point b, Clause 2 or Point c, Clause 5 of this Article, the civil judgment enforcement agency shall enforce such decision in accordance with law.

Article 51. Suspension or termination of the performance of contracts in force

1. Within 5 working days after the Court accepts a claim for the application of bankruptcy procedures, if deeming that the contract is likely to cause disadvantages to the enterprise or cooperative, the creditors or the enterprise or cooperative may request the Court to issue a decision to suspend the performance of the contract, except the case of settlement of secured debts under Article 44 of this Law and unless otherwise specified by law.

2. Within 5 working days after receiving the request, if accepting such request, the Court shall issue a decision to suspend the performance of the contract; if rejecting the request, the Court shall notify such in writing to the applicant.

3. Within 5 working days after issuing a decision to commence bankruptcy procedures, the Court shall review the suspended contract as specified in Clause 1 of this Article before issuing:

a/ A decision resuming contract performance if the contract is valid and being performed or if the contract performance is not likely to cause disadvantages to the enterprise or cooperative; or,

b/ A decision terminating contract performance and remedying its consequences under Article 52 of this Law.

4. If the competent Court decides not to commence bankruptcy procedures, the Court that has decided to suspend contract performance shall decide to annul the suspension decision.

5. After bankruptcy procedures are commenced, if finding that the contract is likely to cause disadvantages to the enterprise or cooperative, the Court shall, at the proposal of the asset management officer or asset management and liquidation enterprise, creditors, or the enterprise or cooperative, consider and decide to terminate contract performance, except the case of settlement of secured debts under Article 44 of this Law and unless otherwise specified by law.

6. The Government shall detail Clauses 1 and 5 of this Article.

Article 52. Payment and compensation for damage upon termination of contract performance

1. When contract performance is terminated under Article 51 of this Law, if assets received by the enterprise or cooperative from the contract still exist as part of assets of the enterprise or cooperative, the contracting party with the enterprise or cooperative may reclaim such assets and refund the money amount received from the enterprise or cooperative; if such assets no longer exist, such contracting party will have the rights of an unsecured creditor for the unpaid amount.

2. In case the termination of performance of a contract causes damage to the contracting party with the enterprise or cooperative, the contracting party will have the rights of an unsecured creditor in respect of such damage.

Article 53. Clearing of obligations

1. After the Court issues a decision to commence bankruptcy procedures, the clearing of obligations that are due and established before the issuance of such decision may only be carried out between the enterprise or cooperative and each creditor.

Asset management officers or asset management and liquidation enterprises shall report to Judges for consideration and opinion before carrying out the clearing of obligations, unless otherwise specified by law.

2. Methods of clearing obligations:

a/ In case the parties have equivalent property obligations, they are not required to perform obligations towards each other and their obligations shall be deemed no longer existing;

b/ In case the parties have non-equivalent property obligations and the positive value difference belongs to the enterprise or cooperative, the contracting party with the enterprise or cooperative shall pay such value difference to be included in assets of the enterprise or cooperative;

c/ In case the parties have non-equivalent property obligations and the positive value difference belongs to the contracting party with the enterprise or cooperative, such contracting party shall become an unsecured creditor for the value difference.

3. The Government shall detail Clause 1 of this Article.

Article 54. Assets of enterprises or cooperatives

1. Unless otherwise specified by law, assets of an enterprise or a cooperative include:

a/ Assets and property rights held by the enterprise or cooperative at the time the Court issues the decision to commence bankruptcy procedures;

b/ Assets and property rights acquired after the Court issues the decision to commence bankruptcy procedures;

c/ The value of land use rights of the enterprise or cooperative determined in accordance with law;

d/ Assets recovered from acts of concealing or dissipating assets of the enterprise or cooperative;

dd/ Assets and property rights recovered from null and void transactions;

e/ Other assets as specified by law.

2. Assets of a sole proprietorship or partnership include:

a/ Assets specified in Clause 1 of this Article;

b/ Assets of the owner of the sole proprietorship or general partners of the partnership that are not directly used in business activities; in case the owner of the sole proprietorship or a general partner of the partnership has assets under common ownership, the assets of such owner or general partner shall be divided in accordance with the civil law and relevant regulations.

3. In case a cooperative is declared bankrupt, the handling of the non-divisible common funds and non-divisible common assets must comply with the law on cooperatives.

Article 55. Sending of debt claim notices, making of lists of creditors and debtors

1. Within 15 days after the Court issues a decision to commence bankruptcy procedures, the creditor shall send a debt claim notice accompanied by supporting documents and evidence to the asset management officer or asset management and liquidation enterprise. Past this time limit, if the creditor fails to send a debt claim notice, it/he/she shall lose the right to participate in bankruptcy procedures.

In case of a force majeure event or an external obstacle, the creditor may send a debt claim notice and the Court shall add it/him/her to the list of creditors before issuing a decision declaring the enterprise or cooperative bankrupt. From the time of being added to the list of creditors of the enterprise or cooperative, the creditor will have the rights and obligations of a creditor specified by this Law.

2. Any debt arising after the expiration of the time limit for declaration specified in Clause 1 of this Article shall be declared within 3 working days after it arises.

3. The asset management officer or asset management and liquidation enterprise shall make a list of creditors and debtors, verify the debts, and collect documents related to the debts. The list of creditors and debtors must clearly state the name, address and debt amount of each creditor and debtor, and indicate secured debts, unsecured debts, due debts, undue debts, and other necessary information.

4. The list of creditors and debtors shall be published on the National Portal on Recovery and Bankruptcy of Enterprises and Cooperatives for at least 7 days up to the date of the creditors’ meeting.

5. Within 10 days after the Court publicises the list of creditors and debtors, the persons participating in bankruptcy procedures and persons with related rights and obligations may request the Judge to review the list of creditors and debtors. The Judge may summon related parties for considering and settling the request; if the request is grounded, the list of creditors and debtors shall be modified and supplemented.

6. The Supreme People’s Court shall detail and guide this Article.

Article 56. Inventory of assets of enterprises or cooperatives

1. Within 15 days after receiving a decision to commence bankruptcy procedures, the enterprise or cooperative shall carry out an inventory, report inventory results, and valuate its assets; when necessary, it shall request in writing the Judge to extend such time limit no more than twice, with each extension not exceeding 15 days. The valuation of assets of the enterprise or cooperative must comply with law.

2. In case the legal representative of the enterprise or cooperative is absent, the person designated by the asset management officer or asset management and liquidation enterprise to act as the representative of the enterprise or cooperative shall carry out the inventory and valuation of assets of the enterprise or cooperative.

3. The inventory sheet of valuated assets shall be promptly sent to the Court carrying out bankruptcy procedures.

4. When finding the inventory and valuation of assets of the enterprise or cooperative specified in Clause 1 of this Article inaccurate, the Judge shall request the asset management officer or asset management and liquidation enterprise to organise a re-inventory and re-valuation of part or the whole of the assets of the enterprise or cooperative. The time limit for the re-inventory and re-valuation is 15 days from the date of receipt of the Court’s request. The assets shall be valuated and appraised based on market prices at the time of inventory.

5. In case the representative of the enterprise or cooperative or other persons refuse to cooperate in asset inventory, intentionally conceal assets or intentionally falsify asset inventory, they shall be handled in accordance with law.

Article 57. Registration of security interests of enterprises or cooperatives

In case an enterprise or a cooperative lends an asset to another person for which a security interest is subject to registration as required by law but has not yet been registered, the asset management officer or asset management and liquidation enterprise shall carry out the registration of the security interest.

Article 58. Application of interim measures

1. In the course of settling a claim for the application of bankruptcy procedures, persons entitled or obliged to submit claims as specified in Article 38 of this Law, or the asset management officer or asset management and liquidation enterprise may request a competent Court to issue a decision on application of one or several of the following interim measures to preserve the assets of the enterprise or cooperative and to guarantee lawful rights and interests of employees:

a/ Permitting the sale of goods or assets that are perishable, close to their expiry date, or would be difficult to be marketed if not sold at the right time; permitting the harvest and sale of crops or other products and goods;

b/ Permitting the sale of goods or assets that are difficult to preserve, or when costs of preservation, storage or safekeeping exceed the value of such goods or assets;

c/ Distraining or sealing off assets of the enterprise or cooperative;

d/ Freezing accounts of the enterprise or cooperative at credit institutions; freezing assets at safekeeping facilities;

dd/ Sealing off warehouses and funds, and seizing and managing accounting books and relevant documents of the enterprise or cooperative;

e/ Prohibiting the transfer of property rights over the assets of the enterprise or cooperative;

g/ Prohibiting any change to the current status of the assets of the enterprise or cooperative;

h/ Compelling the delivery and receipt of assets;

i/ Prohibiting or compelling the enterprise or cooperative, or other related individuals and organisations from performing or to perform certain acts;

k/ Compelling the enterprise or cooperative to make advance payment of wages, remuneration, compensation and allowances for occupational accidents and diseases to employees;

l/ Other interim measures to preserve assets of the enterprise or cooperative under guidance of the Supreme People’s Court or in accordance with law.

2. The Supreme People’s Court shall detail and guide this Article.

Article 59. Handling of the suspension of the enforcement of civil judgments, determination of cases, and temporary cessation of the settlement of requests for the performance of property obligations by enterprises or cooperatives

1. In case bankruptcy procedures are not commenced:

a/ The Court, Arbitration or civil judgment enforcement agency that has issued the suspension decision under Clauses 1 and 2, Article 40 of this Law shall issue a decision to resume the determination of the case or resume judgment enforcement;

b/ Other competent agencies and organisations that have temporarily ceased the settlement of the request for performance of property obligations by the enterprise or cooperative under Clause 5, Article 40 of this Law shall resume the settlement.

2. In case bankruptcy procedures are commenced:

a/ The Court, Arbitration or civil judgment enforcement agency that has issued the suspension decision under Clauses 1 and 2, Article 40 of this Law shall issue a termination decision and forward the case file to the Court currently in charge of carrying out bankruptcy procedures for settlement;

b/ Other competent agencies and organisations that have temporarily ceased the settlement of the request for performance of property obligations by the enterprise or cooperative under Clause 5, Article 40 of this Law shall cease the settlement of such request.

Article 60. Settlement of the termination of the enforcement of civil judgments or the determination of cases

1. In case judgment enforcement is terminated under Clause 2, Article 59 of this Law, on a case-by-case basis, the Court currently in charge of carrying out bankruptcy procedures shall handle the case as follows:

a/ In case the judgment or decision of the Court or the award of the Arbitration has taken legal effect and there is no decision on distraint of assets of the enterprise or cooperative to secure judgment enforcement, the judgment creditor shall be identified as an unsecured creditor;

b/ In case the judgment or decision of the Court or the award of the Arbitration has taken legal effect and there is a decision on distraint of assets of the enterprise or cooperative to secure judgment enforcement, the judgment creditor shall be identified as a secured creditor.

2. In case the determination of a case is terminated under Point a, Clause 2, Article 59 of this Law, after receiving the case file from the Court or Arbitration that has issued the decision on termination of the determination of the case, the Court currently in charge of carrying out bankruptcy procedures shall consider and handle the case as follows:

a/ Depending on the number and complexity of the dispute, the Chief Justice of the Court shall decide to assign one or more than one Judge to settle them;

b/ The Judge(s) shall notify the enterprise or cooperative, agencies, organisations and individuals with related rights and obligations, the asset management officer or asset management and liquidation enterprise, and the procurator to participate in the meeting;

c/ The Judge(s) shall convene a meeting to consider and settle the dispute. The dispute settlement decision shall take effect immediately;

d/ The dispute settlement decision shall be sent to the Procuracy, the enterprise or cooperative, and agencies, organisations and individuals with related rights and obligations, and the asset management officer or asset management and liquidation enterprise;

dd/ Within 5 working days after receiving the dispute resolution decision, the enterprise or cooperative, involved parties, and agencies, organisations and individuals related to the dispute may request review of, and the same-level Procuracy may make a recommendation to the Chief Justice of the Court to review, such decision;

e/ Within 15 days after receiving the request for review or the recommendation, the Chief Justice of the Court shall issue a decision to uphold the dispute settlement decision of the Judge; modify the dispute settlement decision of the Judge, or terminate the review if the applicant withdraws the request or the Procuracy withdraws the recommendation.

The decision of the Chief Justice of the Court mentioned in this Clause is final. This decision shall be sent to the enterprise or cooperative, involved parties, and the Procuracy.

3. After a dispute is settled, the property obligations to be performed by the enterprise or cooperative, or the property obligations to be performed by other involved parties towards the enterprise or cooperative, shall be determined as follows:

a/ In case the enterprise or cooperative is required to perform property obligations, the person as beneficiary of such property obligations may claim payment from the assets of the enterprise or cooperative as a creditor;

b/ In case an involved party is required to perform property obligations towards the enterprise or cooperative, such party shall pay the enterprise or cooperative an amount corresponding to the value of those property obligations.

4. After the Court accepts a claim for the application of bankruptcy procedures, any lawsuit or claim against the enterprise or cooperative shall only be settled at such Court.

5. In the period from the acceptance of a claim for the application of bankruptcy procedures to the issuance of a decision declaring the enterprise or cooperative bankrupt, any arising dispute or claim shall be settled by the Court under Clauses 2 and 3 of this Article.

6. The Supreme People’s Court shall detail and guide this Article.

Section 3

CREDITORS’ MEETINGS

Article 61. Creditors’ meetings

1. Unless a creditors’ meeting is not required to be held under Points c, d and dd, Clause 1, Article 70 of this Law, the Court shall convene a creditors’ meeting upon the completion of the inventory of assets of the enterprise or cooperative, or when it is necessary to decide on matters falling within the competence of the creditors’ meeting as provided in Clause 6 of this Article.

2. Persons entitled to participate in the creditors’ meeting are those specified in Clause 3, Article 33 of this Law.

3. The following persons are obliged to participate in the creditors’ meeting:

a/ The applicant of a claim for the application of bankruptcy procedures as specified in Article 38 of this Law, the owner of the enterprise, or the legal representative of the enterprise or cooperative; if unable to participate in creditors’ the meeting, he/she shall authorise in writing another person to participate in the meeting, and the authorised person will have the same rights and obligations as the authorising person;

b/ The asset management officer or asset management and liquidation enterprise.

4. The asset management officer shall chair the creditors’ meeting.

5. A resolution of the creditors’ meeting shall be adopted when voted in favour by creditors representing 65% or more of total unsecured debts. The resolution of the creditors’ meeting is binding on all creditors.

6. The creditors’ meeting has the right to adopt a resolution that contains the conclusion on one of the following matters:

a/ Proposing the termination of bankruptcy procedures, for the case specified in Clause 1, Article 64 of this Law;

b/ Approving the business recovery plan for the enterprise or cooperative and proposing the Court to recognise such plan. In this case, the enterprise or cooperative must have such a business recovery plan;

c/ Proposing the enterprise or cooperative to be declared bankrupt;

d/ Transferring the whole of assets, or transferring part or the whole of a business line or business activities; or transferring part or the whole of the enterprise or cooperative. In case of transfer of collateral, the consent of the creditor holding such collateral is required;

dd/ Other matters.

7. In case the creditors’ meeting fails to adopt a resolution under Point a, b or c, Clause 6 of this Article, the Court shall decide to declare the enterprise or cooperative bankrupt under Point a, Clause 1, Article 65 of this Law.

8. Within 3 working days after the creditors’ meeting is held, the Court shall send the resolution of the creditors’ meeting to the Procuracy and to the persons entitled or obliged to participate in the creditors’ meeting.

Article 62. Requests and recommendations for review, and settlement of requests and recommendations for review of resolutions of creditors’ meetings

1. If disagreeing with a resolution of the creditors’ meeting, within 5 working days after receiving such resolution, the persons entitled or obliged to participate in the creditors’ meeting may send a written request, and the Procuracy may make a recommendation to the Chief Justice of the Court currently in charge of settling bankruptcy procedures to review such resolution.

2. Within 10 days after receiving the request or recommendation, the Chief Justice of the Court currently in charge of settling bankruptcy procedures shall consider the matter and issue:

a/ A decision rejecting the request or recommendation; or,

b/ A decision to convene the creditors’ meeting again.

3. Within 3 working days after being issued, the decision settling the request or recommendation shall be sent to the Procuracy and to the persons entitled or obliged to participate in the creditors’ meeting.

4. The decision of the Chief Justice of the Court specified in Clause 2 of this Article is final.

Article 63. Recognition of resolutions of the creditors’ meetings approving business recovery plans, and implementation of business recovery plans

1. Within 10 days after the adoption of the resolution of the creditors’ meeting approving a business recovery plan, the Judge shall consider and issue a decision to recognise such resolution. The resolution of the creditors’ meeting shall take effect on the date the Court issues the recognition decision.

From the effective date of the resolution of the creditors’ meeting, any prohibitive or supervisory measures applied to the enterprise or cooperative under Article 32 and Clause 2, Article 42 of this Law shall automatically be terminated. The decision to recognise the resolution of the creditors’ meeting shall, within 3 working days after being issued, be sent to the enterprise or cooperative, the creditors and the Procuracy.

In case the Judge decides not to recognise the resolution of the creditors’ meeting, he/she shall issue a decision declaring the enterprise or cooperative bankrupt.

2. The implementation of the business recovery plan must comply with Articles 29, 35 and 36 of this Law.

3. The Judge shall issue a decision on termination of the implementation of the business recovery plan of the enterprise or cooperative subject to commencement of bankruptcy procedures in the following cases:

a/ The enterprise or cooperative has completed the business recovery plan;

b/ The enterprise or cooperative fails to implement the business recovery plan;

c/ The duration for implementing the business recovery plan has expired.

4. The Court shall publicly notify the decision on termination of the implementation of the business recovery plan of the enterprise or cooperative in accordance with this Law.

5. Legal consequences of the termination of the implementation of the business recovery plan:

a/ In the case specified in Point a, Clause 3 of this Article, the enterprise or cooperative shall be deemed to be no longer insolvent. The Judge shall consider and decide to terminate bankruptcy procedures under Clause 1, Article 64 of this Law;

b/ In the cases specified in Points b and c, Clause 3 of this Article, if the enterprise or cooperative remains insolvent, the Judge shall issue a decision declaring the enterprise or cooperative bankrupt.

Article 64. Termination of bankruptcy procedures

1. From the date the Court issues a decision to commence bankruptcy procedures to before the date of issuance of a decision declaring the enterprise or cooperative bankrupt, if the enterprise or cooperative does not fall into insolvency, the Court shall issue a decision on termination of bankruptcy procedures. For unsettled disputes related to the enterprise or cooperative, the parties may choose dispute settlement methods in accordance with law.

2. If disputing parties fail to reach agreement:

a/ For a case previously terminated by the Court or Arbitration under Point a, Clause 2, Article 59 of this Law, the competent Court shall forward the case file to the Court or Arbitration that has issued the termination decision for consideration and determination in accordance with law;

b/ For a dispute arising in the course of determination of a bankruptcy case, the Court shall issue a decision on termination of the settlement of the dispute, and the parties may request a competent Court or Arbitration to settle it in accordance with law.

3. In case the civil judgment enforcement agency has issued a judgment enforcement termination decision under Point a, Clause 2, Article 59 of this Law, it shall issue a decision to revoke the judgment enforcement termination decision and issue a decision to resume judgment enforcement.

4. A decision on termination of bankruptcy procedures shall, within 3 working days after being issued, be sent to the agencies, organisations and individuals specified in Clause 3, Article 41 of this Law.

Within 7 days after receiving the decision, the persons participating in bankruptcy procedures may request a review of, and the same-level Procuracy may make a recommendation to the Chief Justice of the Court currently in charge of settling bankruptcy procedures against, the decision on termination of bankruptcy procedures.

5. Within 3 working days after receiving the request for review or the recommendation specified in Clause 2 of this Article, the Chief Justice of the Court currently in charge of settling bankruptcy procedures shall consider and settle the recommendation or request for review of the decision on termination of bankruptcy procedures and issue:

a/ A decision upholding the decision on termination of bankruptcy procedures; or,

b/ A decision annulling the decision on termination of bankruptcy procedures and assigning a Judge to settle bankruptcy procedures.

6. The decision on settlement of the request for review of or the recommendation against the decision on termination of bankruptcy procedures shall, within 3 working days after being issued, be sent to the agencies, organisations and individuals specified in Clause 3, Article 41 of this Law.

7. In case the Court has issued the decision on termination of bankruptcy procedures, the remainder of the advanced bankruptcy costs shall be refunded to the applicant.

Section 4

DECLARATION OF BANKRUPTCY OF ENTERPRISES OR COOPERATIVES

Article 65. Decisions declaring enterprises or cooperatives bankrupt

1. For a dispute related to an enterprise or a cooperative that has been completely settled by the Court, the Court shall issue a decision declaring the enterprise or cooperative bankrupt within 15 days:

a/ After receiving the report on results of the creditors’ meeting, in case the creditors’ meeting fails to adopt a resolution as specified in Points a, b and c, Clause 6, Article 61 of this Law;

b/ After receiving the resolution of the creditors’ meeting containing a conclusion proposing the enterprise or cooperative be declared bankrupt;

c/ After receiving the report from the asset management officer stating that the enterprise or cooperative has failed to implement the business recovery plan, or that the duration for implementation of the business recovery plan has expired but the enterprise or cooperative remains insolvent; or,

d/ After the Judge issues the decision not to recognise the resolution of the creditors’ meeting under Clause 1, Article 63 of this Law.

2. A decision declaring an enterprise or a cooperative bankrupt must have the following principal contents:

a/ Name of the Court issuing the decision and full name of the Judge in charge of carrying out bankruptcy procedures;

b/ Information on the enterprise or cooperative declared bankrupt;

c/ Grounds for the declaration of bankruptcy;

d/ Termination of operation of the bankrupt enterprise or cooperative; termination of transactions related to the enterprise or cooperative; termination of the performance of the interest calculation obligation for the enterprise or cooperative; remediation of consequences of terminated transactions; declaration of null and void transactions and remediation of consequences thereof; termination of labour contracts with employees, and settlement of employee benefits;

dd/ Termination of powers of the representative of the enterprise or cooperative;

e/ Recovery of debts and handling of collateral in case the security contract has not yet become due;

g/ Designation of a person to perform accounting jobs in accordance with the law on accounting;

h/ Sale of the remaining assets of the enterprise or cooperative;

i/ Plan on division of the asset value before and after the declaration of bankruptcy of the enterprise or cooperative in the order of priority for asset division specified in Article 46 of this Law;

k/ Prohibition from holding positions after the enterprise or cooperative is declared bankrupt under Article 84 of this Law;

l/ Settlement of other matters.

3. A decision declaring an enterprise or a cooperative bankrupt takes effect on the date of its issuance.

4. After being issued, the decision declaring the enterprise or cooperative bankrupt may not be modified or supplemented, unless obvious spelling mistakes, clerical errors or miscalculations are detected, or except the case specified in Point b, Clause 2, Article 81 of this Law.

5. Within 15 days after receiving a written request of the civil judgment enforcement agency, the enforcement officer, or the asset management officer or asset management and liquidation enterprise, the Court shall make an interpretation of the decision declaring the enterprise or cooperative bankrupt.

6. Within 10 days after issuing the decision declaring the enterprise or cooperative bankrupt, the Court shall send the decision or an extract of the decision to the persons participating in bankruptcy procedures, the Procuracy, related agencies, organisations and individuals, the civil judgment enforcement agency, and the business registration agency for updating the legal status of the enterprise or cooperative, and its branches, representative offices and business locations to the status of bankruptcy, and publish it on the National Portal on Recovery and Bankruptcy of Enterprises and Cooperatives.

Article 66. Property obligations after issuance of decisions declaring enterprises or cooperatives bankrupt

1. A decision declaring an enterprise or a cooperative bankrupt specified in Article 65 and Clause 2, Article 71 of this Law does not exempt the owner of a sole proprietorship or general partners of a partnership from the property obligations towards creditors whose debts remain unpaid, unless otherwise agreed by the persons participating in bankruptcy procedures or otherwise specified by law.

2. Property obligations arising after the issuance of the decision declaring the enterprise or cooperative bankrupt shall be settled in accordance with the law on civil judgment enforcement and relevant regulations.

Article 67. Requests for review of and protests against decisions declaring enterprises or cooperatives bankrupt

1. The persons notified under Clause 6, Article 65 of this Law, and others who are not persons participating in bankruptcy procedures whose lawful rights and interests are infringed upon may request a review of the decision declaring the enterprise or cooperative bankrupt. The Procuracy may protest against the decision declaring the enterprise or cooperative bankrupt in case such decision seriously infringes upon public interests or the interests of the State.

2. The time limit for requesting a review or filing a protest is 10 days after the decision declaring the enterprise or cooperative bankrupt is received or duly notified.

Within 3 working days after receiving the request for review or the protest, the Court that has issued the decision declaring the enterprise or cooperative bankrupt shall forward the bankruptcy case file, enclosed with the request or protest, to the competent provincial-level People’s Court for consideration and settlement.

3. Within 10 days after receiving the case file, the panel of Judges of the provincial-level People’s Court shall convene a meeting to consider and settle the request for review of or the protest against the decision declaring the enterprise or cooperative bankrupt, and issue:

a/ A decision rejecting the request or protest and upholding the decision declaring the enterprise or cooperative bankrupt;

b/ A decision modifying the decision declaring the enterprise or cooperative bankrupt; or,

c/ A decision annulling the decision declaring the enterprise or cooperative bankrupt and forwarding the case file to the competent subordinate People’s Court for settlement.

4. The Supreme People’s Court shall review the decision specified in Clause 3 of this Article if such decision seriously infringes upon public interests, interests of the State, or lawful rights and interests of persons participating in bankruptcy procedures or others who are not persons participating in bankruptcy procedures, based on one of the following grounds:

a/ A serious violation of the law on recovery and bankruptcy is detected;

b/ New circumstances are detected which might fundamentally change contents of the bankruptcy declaration decision, and which the Court or persons participating in bankruptcy procedures could not have known at the time the Court issued the decision.

5. The decision of the Supreme People’s Court specified in Clause 4 of this Article is final and takes legal effect on the date of issuance.

Chapter IV

FAST-TRACK RECOVERY OR BANKRUPTCY PROCEDURES

Section 1

FAST-TRACK RECOVERY PROCEDURES

Article 68. Application of fast-track recovery procedures

1. Fast-track recovery procedures shall be carried out in accordance with the provisions of this Section. If this Section does not provide this issue, the relevant provisions of this Law shall apply.

2. Within 10 days after accepting a claim for the application of recovery procedures, the Judge shall consider and decide to apply fast-track recovery procedures when the enterprise or cooperative falls into one of the following cases:

a/ The enterprise or cooperative has 20 or fewer unsecured creditors and the total of payable debt principals of VND 10 billion or less;

b/ The enterprise or cooperative is a small- or micro-sized enterprise;

c/ Other cases as specified by law.

3. When carrying out fast-track recovery procedures, if there are grounds to conclude that the case no longer satisfies the conditions for application of fast-track procedures, the Court shall issue a decision to switch the case to be determined according to ordinary procedures.

4. The Supreme People’s Court shall detail and guide this Article.

Article 69. Fast-track recovery order and procedures

1. After a decision on application of fast-track recovery procedures is issued, the duration for carrying out fast-track recovery procedures is half of that for ordinary recovery procedures.

2. A resolution of the creditors’ meeting shall be adopted when voted in favour by creditors representing 51% or more of total debts of the voting creditors.

Section 2

FAST-TRACK BANKRUPTCY PROCEDURES

Article 70. Application of fast-track bankruptcy procedures

1. Fast-track bankruptcy procedures shall be applied in one of the following cases:

a/ The enterprise or cooperative has 20 or fewer unsecured creditors and the total of payable debt principals of VND 10 billion or less;

b/ The enterprise or cooperative is a small- or micro-sized enterprise;

c/ The enterprise or cooperative has no assets left or has assets that cannot be liquidated or recovered, or has assets that are insufficient to pay bankruptcy fee, or advance or pay bankruptcy costs;

d/ The enterprise or cooperative is a credit institution;

dd/ The enterprise or cooperative is an insurance enterprise or a reinsurance enterprise for which the Ministry of Finance has issued a document terminating the application of control measures, but the enterprise has failed to rectify the situation that led to the application of such control measures in accordance with the Law on Insurance Business;

e/ Other cases as specified by law or guided by the Supreme People’s Court.

2. Credit institutions shall carry out bankruptcy procedures under Article 72 of this Law. If Article 72 of this Law does not provide this issue, other relevant provisions of this Law and the Law on Credit Institutions shall apply, except the provisions of Articles 61, 62, 63 and 64 of this Law.

3. Insurance enterprises and reinsurance enterprises falling into the case specified in Point dd, Clause 1 of this Article shall carry out bankruptcy procedures in accordance with the Law on Insurance Business. In case the Law on Insurance Business does not provide this issue, the provisions of this Law shall apply, except the provisions of Articles 46, 61, 62, 63 and 64 of this Law.

4. The Supreme People’s Court shall detail and guide this Article.

Article 71. Fast-track bankruptcy order and procedures

1. Within 10 days after accepting a claim for the application of bankruptcy procedures, the Judge shall consider and decide to apply fast-track bankruptcy procedures if the enterprise or cooperative falls into one of the cases specified in Points a and b, Clause 1, Article 70 of this Law.

After the issuance of a decision on application of fast-track bankruptcy procedures, the duration for carrying out fast-track bankruptcy procedures is half of that for ordinary bankruptcy procedures.

A resolution of the creditors’ meeting shall be adopted when voted in favour by the voting creditors representing 51% or more of total unsecured debts.

2. Within 30 days after accepting a claim for the application of bankruptcy procedures, the Court shall consider and declare the enterprise or cooperative bankrupt if it falls into one of the cases specified in Point c, Clause 1, Article 70 of this Law.

Within 30 days after the adoption of a resolution of the creditors’ meeting proposing the application of bankruptcy procedures, if the enterprise or cooperative has no assets left to advance bankruptcy costs under Point a, Clause 4, Article 34 of this Law, the Court shall consider and declare the enterprise or cooperative bankrupt.

3. In case the Court issues a decision declaring the enterprise or cooperative bankrupt under Point c, Clause 1, Article 70 of this Law, the remainder of the advanced bankruptcy costs shall be refunded to the applicant.

4. Fast-track bankruptcy procedures shall be carried out under the provisions of this Section. If this Section does not provide this issue, other relevant provisions of this Law shall apply.

Article 72. Procedures for bankruptcy of credit institutions

1. After the State Bank of Vietnam issues a document terminating special control, or deciding not to apply solvency recovery measures, or terminating the application of solvency recovery measures, if a credit institution remains insolvent, the following persons will be entitled or obliged to submit a claim for the application of bankruptcy procedures:

a/ The agencies, organisations or individuals specified in Clauses 1, 3 and 4, Article 38 of this Law;

b/ The credit institution, which is obliged to submit a claim for the application of bankruptcy procedures. If the credit institution fails to do so, the State Bank of Vietnam shall submit a claim for the application of bankruptcy procedures for the credit institution.

2. The Court shall accept a claim for the application of bankruptcy procedures against a credit institution once the State Bank of Vietnam has issued a document terminating special control, or deciding not to apply solvency recovery measures, or terminating the application of solvency recovery measures, and the credit institution remains insolvent.

3. Within 10 days after accepting a claim for the application of bankruptcy procedures, the Judge shall issue a decision to commence bankruptcy procedures for the credit institution.

4. Transactions entered into by a credit institution during the period in which the State Bank of Vietnam applies special control measures or in which solvency recovery measures are applied under the supervision by the State Bank of Vietnam are not subject to the provisions on null and void transactions of Article 49 of this Law.

5. A credit institution shall repay special loans in accordance with the law on credit institutions before dividing its assets under Clause 6 of this Article.

6. The division of the value of assets of a credit institution shall be carried out in the following order of priority:

a/ Bankruptcy costs;

b/ Unpaid amounts of wages, compulsory social insurance, unemployment insurance, health insurance, and occupational accident and disease insurance premiums, severance allowances, and other benefits of employees under signed collective labour agreements or labour contracts;

c/ Deposits, after having deducted amounts already paid to depositors by the deposit insurer; amounts paid to depositors at the bankrupt credit institution by the deposit insurer in accordance with the law on deposit insurance and guidance of the State Bank of Vietnam; unpaid deposit insurance premiums; and late-payment interests on deposit insurance premiums;

d/ Financial obligations towards the State; unsecured debts payable to creditors on the list of creditors; secured debts remaining unpaid for the reason that the value of collateral is insufficient to pay such debts.

7. In case the value of assets of a credit institution remains positive after full payment of the debts specified in Clause 6 of this Article, it shall belong to:

a/ Members of the credit institution being a cooperative;

b/ The owner of the credit institution being a single-member limited liability company;

c/ Capital-contributing members of the credit institution being a limited liability company with two or more members; or shareholders of the credit institution being a joint stock company.

8. In case the value of assets of a credit institution is insufficient to make payment under Clause 6 of this Article, the creditors within the same priority rank may get paid in proportion to the percentage of their debts.

9. Within 30 days after the asset management officer or asset management and liquidation enterprise completes the compilation of the list of creditors and debtors and the asset inventory of the credit institution, the Court shall issue a decision declaring the credit institution bankrupt.

10. Within 10 days after receiving the decision declaring the credit institution bankrupt, the owners of assets entrusted to the credit institution, deposited for safekeeping, or managed by the credit institution under asset entrustment, safekeeping or management contracts shall produce documents proving their ownership rights and relevant records and papers to the civil judgment enforcement agency for reclaiming their assets.

11. The Supreme People’s Court shall detail and guide this Article.

Chapter V

REQUESTS FOR FOREIGN ASSISTANCE IN RECOVERY OR BANKRUPTCY CASES; ASSISTANCE FOR FOREIGN RECOVERY OR BANKRUPTCY CASES; RECOGNITION AND ENFORCEMENT OF FOREIGN JUDGMENTS AND DECISIONS ON RECOVERY OR BANKRUPTCY

Article 73. Requests for assistance of foreign courts and authorities in recovery or bankruptcy cases

1. In the course of determining a recovery or bankruptcy case of an enterprise or a cooperative, a Vietnamese court may request a foreign court or authority to provide assistance for:

a/ Verifying and inventorying assets of the enterprise or cooperative;

b/ Valuating assets of the enterprise or cooperative;

c/ Liquidating and recovering assets of the enterprise or cooperative;

d/ Requesting overseas debtors to pay debts to the enterprise or cooperative;

dd/ Other necessary requests in the determination of the recovery or bankruptcy case.

2. Procedures for requesting foreign courts and authorities to provide assistance in the determination of recovery or bankruptcy cases must comply with laws of requested countries, treaties to which the Socialist Republic of Vietnam is a contracting party, and Vietnam’s law.

3. In the course of determining a Vietnamese recovery or bankruptcy case abroad, a Vietnamese court may issue a decision designating an asset management officer or asset management and liquidation enterprise, or the legal representative of the enterprise or cooperative to act as the representative of the recovery or bankruptcy case to carry out relevant procedures.

4. The representative of the Vietnamese recovery or bankruptcy case abroad has the following tasks and powers:

a/ To request foreign courts and authorities to provide assistance in the determination of the recovery or bankruptcy case currently settled by the Vietnamese court; to receive and carry out activities assisted by foreign courts and authorities;

b/ To request foreign courts and authorities to recognise and enforce recovery or bankruptcy decisions issued by the Vietnamese court.

5. The scope of tasks and powers of representatives of Vietnamese recovery and bankruptcy cases abroad shall be decided by Vietnamese courts on a case-by-case basis.

Article 74. Assistance for foreign recovery or bankruptcy cases

1. A Vietnamese court shall provide assistance for a foreign recovery or bankruptcy case if:

a/ The foreign court or authority requests the Vietnamese court to provide assistance in determining the foreign recovery or bankruptcy case;

b/ The representative of the foreign recovery or bankruptcy case who is designated by the foreign court or authority requests the Vietnamese court to assist in recognising his/her right to represent creditors and/or debtors to file claims or participate in the recovery or bankruptcy case currently settled by the Vietnamese court.

2. Foreign courts and authorities, and representatives of foreign recovery and bankruptcy cases that request assistance under Clause 1 of this Article shall submit to competent Vietnamese courts a written request and accompanying documents, and pay the fee for requesting assistance, and costs in accordance with Vietnam’s law.

3. At the request of foreign courts and authorities, and representatives of foreign recovery and bankruptcy cases, and after considering lawful rights and interests of creditors, enterprises or cooperatives, and persons with related rights and obligations, Vietnamese courts shall consider and decide to carry out one of the following activities:

a/ Verifying and inventorying assets of the enterprises or cooperatives;

b/ Valuating assets of the enterprises or cooperatives;

c/ Liquidating and recovering assets of the enterprises or cooperatives;

d/ Requesting debtors in Vietnam to pay debts to the enterprises or cooperatives;

dd/ Other necessary requests for determining the recovery and bankruptcy cases.

4. A Vietnamese court shall reject a request for assistance under Clause 1 of this Article if the request for assistance falls into one of the following cases:

a/ The request for assistance runs counter to the fundamental principles of Vietnam’s law; is inconsistent with treaties to which the Socialist Republic of Vietnam is a contracting party; is prejudicial to the national sovereignty or security of Vietnam, public interests, or the interests of the State; or affects lawful rights and interests of creditors in the territory of Vietnam;

b/ The applicant fails to submit sufficient documents as required by the Court, or the submitted documents are insufficient to conclude that the request for assistance is lawful;

c/ The applicant fails to pay the fee or advance costs to the Court in accordance with law;

d/ Other cases as specified by law.

5. Asset management officers or asset management and liquidation enterprises, enforcement officers, and other competent persons may provide assistance in accordance with Vietnam’s law.

Article 75. Recognition and enforcement of recovery or bankruptcy judgments and decisions of foreign courts or authorities

1. Recovery or bankruptcy judgments and decisions of foreign courts or authorities to be recognised and enforced in Vietnam are legally effective judgments and decisions related to assets of individuals and organisations in the territory of Vietnam, unless otherwise provided by treaties to which the Socialist Republic of Vietnam is a contracting party.

2. Representatives of foreign recovery or bankruptcy cases may request Vietnamese courts to recognise and enforce recovery or bankruptcy judgments and decisions in Vietnam if, at the time of request, judgment debtors reside or work in Vietnam, or agencies or organisations subject to the enforcement have their head offices located in Vietnam or have assets related to the enforcement of such judgments and decisions in Vietnam.

Applicants requesting the recognition and enforcement of recovery or bankruptcy judgments and decisions of foreign courts or authorities shall pay the fee for such request in accordance with law.

3. A Vietnamese court shall reject a request for recognition and enforcement of a recovery or bankruptcy judgment or decision of a foreign court or authority in one of the following cases:

a/ The recognition and enforcement of the judgment or decision run counter to the fundamental principles of Vietnam’s law; are inconsistent with treaties to which the Socialist Republic of Vietnam is a contracting party; are prejudicial to the national sovereignty or security of Vietnam, public interests or the interests of the State; or affect lawful rights and interests of creditors in the territory of Vietnam;

b/ The judgment or decision debtor has not been fully and promptly notified of the recovery or bankruptcy case, unless the judgment or decision debtor is aware thereof but makes no objection in accordance with the law of the country where the judgment or decision was issued;

c/ There is a legally effective judgment or decision issued by a Vietnamese court, or before the foreign adjudicating body accepted the recovery or bankruptcy case, a Vietnamese court had accepted and has been settling the case, or a judgment or decision of the court or authority of a third country has been recognised and enforced by a Vietnamese court;

d/ The judgment or decision fails to satisfy the conditions specified in Clauses 1 and 2 of this Article, and the relevant provisions of treaties to which the Socialist Republic of Vietnam is a contracting party;

dd/ The judgment or decision seriously infringes upon rights of creditors, debtors, or persons with related rights and interests in the course of determining the recovery or bankruptcy case;

e/ The judgment or decision is currently under review in the country of issuance, or the time limit for requesting review according to ordinary procedures in such country has not yet expired;

g/ The judgment or decision has not yet taken legal effect, or has been annulled or suspended from enforcement in the country of issuance;

h/ The statute of limitations for judgment enforcement specified by Vietnam’s law has expired;

i/ Other cases as specified by law.

4. Applicants and judgment debtors may request review of, and Procuracies may protest against, court decisions recognising and enforcing recovery or bankruptcy judgments and decisions of foreign courts or authorities in order to request competent provincial-level People’s Courts to review them in accordance with this Law. Decisions of provincial-level People’s Courts are final.

5. The recognition and enforcement of recovery or bankruptcy judgments and decisions of foreign courts or authorities must comply with the provisions of this Chapter. If this Chapter does not provide this issue, the relevant provisions of the civil procedure law and the law on mutual legal assistance in civil matters shall apply.

Chapter VI

ENFORCEMENT OF DECISIONS DECLARING ENTERPRISES OR COOPERATIVES BANKRUPT

Article 76. Competence and procedures for enforcement of decisions declaring enterprises and cooperatives bankrupt

1. The competence and procedures for enforcement of decisions declaring enterprises and cooperatives bankrupt must comply with provisions of this Chapter. In case this Chapter does not provide this issue, the law on civil judgment enforcement shall apply.

2. Within 3 working days after receiving a decision declaring an enterprise or a cooperative bankrupt, the civil judgment enforcement agency shall issue a decision on the enforcement of the decision declaring the enterprise or cooperative bankrupt, and assign an enforcement officer to take charge of the case.

3. After being assigned by the Head of the civil judgment enforcement agency, the enforcement officer shall perform the following tasks:

a/ Within 2 working days after being assigned, to issue a written request for the asset management officer or asset management and liquidation enterprise to organise the enforcement of the decision declaring the enterprise or cooperative bankrupt.

The request for the asset management officer or asset management and liquidation enterprise to organise the enforcement of the decision declaring the enterprise or cooperative bankrupt shall be sent to the Court, Procuracy and the person participating in bankruptcy procedures;

b/ To carry out procedures for opening a bank account under the name of the civil judgment enforcement agency competent to enforce the bankruptcy declaration decision in order to deposit recovered amounts of the bankrupt enterprise or cooperative;

c/ To supervise the asset management officer or asset management and liquidation enterprise in the enforcement of the decision declaring the enterprise or cooperative bankrupt;

d/ To apply coercive measures to recover and hand over assets in accordance with Clause 4 of this Article. The order and procedures for implementing coercive measures must comply with the law on civil judgment enforcement.

4. If deeming it necessary to implement coercive measures, the asset management officer or asset management and liquidation enterprise shall request the civil judgment enforcement agency to take coercive measures to recover and hand over assets in accordance with the law on civil judgment enforcement.

5. The Government shall detail this Article.

Article 77. Valuation and sale of assets

1. Within 10 days after receiving a request for organisation of the enforcement of the decision declaring the enterprise or cooperative bankrupt, the asset management officer or asset management and liquidation enterprise shall conduct asset valuation in accordance with law.

2. Assets shall be sold in the following forms:

a/ Auction;

b/ Sale not through auction procedures.

3. The asset management officer or asset management and liquidation enterprise shall valuate assets and sell assets not through auction procedures in accordance with law for:

a/ Assets that are at risk of being destroyed;

b/ Assets that are substantially diminished in value or are of small value;

c/ Assets with their values smaller than the costs of preservation, storage or safekeeping.

4. Asset revaluation shall be conducted when the violations specified in Clauses 1 and 3 of this Article are detected, leading to falsification of asset valuation results.

5. Judges shall decide on asset revaluation in case of sale of assets under Clause 5, Article 20 of this Law. Enforcement officers shall decide on asset revaluation in case of enforcement of bankruptcy declaration decisions.

6. In case an asset is valuated as valueless or unsellable as specified in this Article, the asset management officer shall propose the Judge to determine that such asset is no longer the asset of the bankrupt enterprise or cooperative.

7. The Government shall detail this Article.

Article 78. Recovery of assets in case of detecting violations

The asset management officer or asset management and liquidation enterprise or the enforcement officer may request the Court to issue a decision to recover assets of the enterprise or cooperative due to performance of null and void transactions under Article 49 of this Law. The recovery of assets must comply with the law on civil judgment enforcement.

Article 79. Return of rented or borrowed assets when an enterprise or a cooperative is declared bankrupt

1. Within 10 days after receiving the bankruptcy declaration decision, the owner of assets leased or lent to the enterprise or cooperative for use in business activities shall produce the title document and asset lease or lending contract to the civil judgment enforcement agency for receiving back the assets.

2. In case the enterprise or cooperative declared bankrupt has paid in advance the rental while the lease term has not yet expired, the lessor may receive back the leased assets only after having paid the rental amount corresponding to the remaining lease term for the civil judgment enforcement agency to add them to assets of such enterprise or cooperative.

3. In case the enterprise or cooperative declared bankrupt has transferred the rented or borrowed assets to another party and cannot reclaim them, the lessor or lender may claim a compensation for such assets as an unsecured debt.

Article 80. Handling of assets of an enterprise or a cooperative arising after the issuance of the decision declaring the enterprise or cooperative bankrupt

1. In case a null and void transaction is detected after the issuance of the decision declaring the enterprise or cooperative bankrupt and before the completion of the enforcement of the decision declaring the enterprise or cooperative bankrupt, the asset management officer or asset management and liquidation enterprise may request the Court to declare the transaction null and void, settle consequences of the null and void transaction and divide assets of the enterprise or cooperative in accordance with Article 46 of this Law.

2. In case the assets of the enterprise or cooperative are detected as not divided after the issuance of the decision declaring the enterprise or cooperative bankrupt and before the completion of the enforcement of the decision declaring the enterprise or cooperative bankrupt, the Court which has declared the enterprise or cooperative bankrupt shall consider and decide on the division of such assets in accordance with Article 46 of this Law.

3. The civil judgment enforcement agency shall organise the enforcement of the Court’s decision on asset division in accordance with law.

Article 81. Handling of cases arising after the issuance of decisions declaring enterprises or cooperatives bankrupt

1. After the Court issues a decision declaring an enterprise or a cooperative bankrupt, if a creditor sends a debt claim notice to the Court and can give a plausible reason for failing to send the debt claim notice within the law-prescribed time limit, the Court shall handle the case as follows:

a/ In case the asset division plan has been completely implemented, the Court shall issue a notice rejecting the creditor’s debt claim;

b/ In case the asset division plan has yet to be implemented, the Court shall decide to adjust such plan.

2. In case a dispute arises in the course of liquidating assets under the decision declaring the enterprise or cooperative bankrupt or in case the liquidation is impossible, the enforcement officer, asset management officer or asset management and liquidation enterprise and the person participating in bankruptcy procedures shall request the Court to consider dispute resolution.

Within 15 days after receiving the request from the enforcement officer, asset management officer or asset management and liquidation enterprise and the person participating in bankruptcy procedures, the Court shall consider dispute resolution and issue:

a/ A decision rejecting the request of the enforcement officer, asset management officer or asset management and liquidation enterprise and the person participating in bankruptcy procedures; or,

b/ A decision accepting the request of the enforcement officer, asset management officer or asset management and liquidation enterprise and the person participating in bankruptcy procedures, and amending and supplementing the promulgated decision.

3. In case the enforcement officer, asset management officer or asset management and liquidation enterprise and the person participating in bankruptcy procedures disagree with the decision specified in Point a, Clause 2 of this Article, they may request the Procuracy to consider making a recommendation.

4. The asset management officer or asset management and liquidation enterprise shall represent the enterprise or cooperative to participate in dispute resolution.

Article 82. Completion of enforcement of decisions declaring enterprises or cooperatives bankrupt

1. The enforcement of the decision declaring an enterprise or cooperative bankrupt is completed in one of the following cases:

a/ The enterprise or cooperative has no assets to be liquidated or divided;

b/ The assets of the enterprise or cooperative have been completely divided.

2. Within 2 years after the judgment enforcement agency issues a bankruptcy declaration decision, if the debtor is unable to enforce such decision, the judgment enforcement agency shall issue a decision to complete the enforcement of the bankruptcy declaration decision.

3. Within 3 working days from the date of completion of the enforcement of the bankruptcy declaration decision, the Head of the civil judgment enforcement agency shall issue a decision to complete the enforcement of the bankruptcy declaration decision, which shall be sent to the Court that has settled the bankruptcy procedures and publicly disclosed in accordance with law.

Chapter VII

RESPONSIBILITIES OF STAKEHOLDERS, HANDLING OF VIOLATIONS AND SETTLEMENT OF COMPLAINTS AND DENUNCIATIONS

Article 83. Responsibilities for violations of law in recovery or bankruptcy cases

1. Agencies, agencies and organisation that commit violations of law in the course of determination of recovery and bankruptcy cases shall, depending on the nature and severity of their violations, be disciplined, administratively sanctioned or examined for penal liability; if causing damage, they shall pay compensation in accordance with law.

2. The Government shall provide in detail acts of administrative violations and the sanctioning of administrative violations in the field of recovery and bankruptcy.

Article 84. Prohibition from holding posts after enterprises or cooperatives are declared bankrupt

1. Holders of the posts of President, Chief Executive Officer and member of the Members’ Council in an enterprise in which the State holds 100% of charter capital and which is declared bankrupt may not hold such posts in any state enterprise within 3 years from the date the Court issues the bankruptcy declaration decision.

2. The representative of the state capital amount at a state-invested enterprise declared bankrupt may not hold managerial posts in any state-invested enterprise within 3 years from the date the Court issues the bankruptcy declaration decision.

3. If the holder of a managerial post in an enterprise or a cooperative declared bankrupt intentionally violates the provisions of Clause 1, Article 13; Clause 1, Article 31; Clause 5, Article 38; and Clause 2, Article 42, of this Law, the Judge shall consider and decide to deprive him/her of the right to establish, or act as a manager of, an enterprise or a cooperative within 3 years from the date the Court issues the bankruptcy declaration decisions.

4. The provisions of Clauses 1, 2 and 3 of this Article shall not apply in the following cases:

a/ The enterprise or cooperative is declared bankrupt due to external obstacles or for force majeure events;

b/ The enterprise is declared bankrupt not because of management, administration or supervision activities of the the holder of the post of President, Chief Executive Officer or member of the Members’ Council of the enterprise, for enterprises in which the State holds 100% of charter capital; or of the representative of the state capital amount in the enterprise who is assigned, designated or appointed, for state-invested enterprises.

Article 85. Settlement of complaints and denunciations in recovery or bankruptcy cases

1. Agencies, organisations and individuals have the right to lodge complaints or denunciations against decisions or acts issued or committed in the course of determination of recovery or bankruptcy cases by persons conducting recovery or bankruptcy procedures when there are grounds to believe that such decisions or acts are unlawful and infringe upon their lawful rights and interests.

2. Complaints and denunciations against decisions or acts of persons conducting recovery or bankruptcy procedures in recovery or bankruptcy cases shall be settled in accordance with the civil procedure law. Complaints and denunciations against decisions or acts of enforcement officers or heads of civil judgment enforcement agencies shall be settled in accordance with the law on civil judgment enforcement.

Chapter VIII

IMPLEMENTATION PROVISIONS

Article 86. To amend and supplement a number of articles, clauses and points of relevant laws and resolutions

1. To amend and supplement Point g, Clause 1, Article 214 of Civil Procedure Code No. 92/2015/QH13, which has a number of articles amended and supplemented under Code No. 45/2019/QH14, Law No. 59/2020/QH14, Law No. 13/2022/QH15, Law No. 19/2023/QH15, Law No. 34/2024/QH15, Law No. 46/2024/QH15 and Law No. 85/2025/QH15, as follows:

“g/ In accordance with the law on recovery and bankruptcy;”.

2. To amend and supplement Point a, Clause 1, Article 37 of Law No. 41/2024/QH15 on Social Insurance, which has a number of articles amended and supplemented under Law No. 73/2025/QH15, Law No. 84/2025/QH15 and Law No. 113/2025/QH15, as follows:

“a/ In case the employer encounters difficulties and has to suspend production and business activities, resulting in employees and the employer unable to pay social insurance premiums, or in case the employer is entitled to recovery procedures in accordance with the law on recovery and bankruptcy, the payment of premiums to the retirement and survivorship fund may be suspended for up to 12 months;”.

3. To amend and supplement Point c, Clause 2, Article 4 of Law No. 34/2024/QH15 on Organisation of People’s Courts, which has a number of articles amended and supplemented under Law No. 81/2025/QH15 and Law No. 116/2025/QH15, as follows:

“c/The National Assembly Standing Committee shall provide the scope of territorial jurisdiction of a number of regional People’s Courts that settle recovery and bankruptcy cases; civil, business or commercial cases, or administrative cases related to intellectual property or technology transfer at the proposal of the Chief Justice of the Supreme People’s Court;”.

4. To amend and supplement Section 6.4.I.B of Appendix 01, the List of charges and fees, to Law No. 97/2015/QH13 on Charges and Fees, which has a number of articles amended and supplemented under Law No. 09/2017/QH14, Law No. 23/2018/QH14, Law No. 72/2020/QH14, Law No. 16/2023/QH15, Law No. 20/2023/QH15, Law No. 24/2023/QH15, Law No. 33/2024/QH15, Law No. 35/2024/QH15, Law No. 47/2024/QH15, Law No. 60/2024/QH15, Law No. 74/2025/QH15, Law No. 89/2025/QH15, Law No. 94/2025/QH15, Law No. 95/2025/QH15, Law No. 116/2025/QH15, Law No. 118/2025/QH15 and Law No. 130/2025/QH15, as follows:

5. To replace the phrase “application of the Law on Bankruptcy”, the phrase “law on bankruptcy”, the phrase “Bankruptcy Tribunal”, and the phrase “bankruptcy cases” in the National Assembly’s laws and resolutions promulgated before the effective date of this Law, with the phrase “application of the Law on Recovery and Bankruptcy”; the phrase “law on recovery and bankruptcy”; the phrase “Recovery and Bankruptcy Tribunal”, and the phrase “recovery and bankruptcy cases”, respectively.

Article 87. Effect

1. This Law takes effect on March 1, 2026, except Clause 3, Article 38 of this Law, which takes effect on July 1, 2026.

2. Law No. 51/2014/QH13 on Bankruptcy, which has a number of articles amended and supplemented under Law No. 85/2025/QH15, ceases to be effective on the effective date of this Law, except Points and b, Clause 1, Article 88 of this Law.

Article 88. Transitional provisions

1. Bankruptcy cases that have been accepted by the Court before the effective date of this Law but have yet to be settled must comply with this Law for further settlement, except the following cases:

a/ Civil judgment enforcement agencies that have been organising the enforcement of decisions declaring enterprises or cooperatives bankrupt before the effective of this Law, but the enforcement has yet to be completed, shall continue to enforce such decisions in accordance with Law No. 51/2014/QH13 on Bankruptcy;

b/ Requests and recommendations for bankruptcy declaration decisions specified in Article 113 of Law No. 51/2014/QH13 on Bankruptcy that have yet to be completely settled by the effective date of this Law shall be settled in accordance with Law No. 51/2014/QH13 on Bankruptcy.

2. The levels of the recovery fee, the fee for requesting assistance in foreign bankruptcy cases, and the fee for requesting recognition and enforcement of recovery or bankruptcy judgments or decisions issued by foreign courts or authorities shall be equal to the bankruptcy fee levels until the National Assembly Standing Committee issues other regulations.

3. The Supreme People’s Court shall detail and guide Clause 1 of this Article.

This Law was passed on December 11, 2025, by the 15 National Assembly of the Socialist Republic of Vietnam at its 10 session.-

Chairman of the National Assembly
TRAN THANH MAN