Chapter 4. Law On Bankruptcy 2014

THE PRESIDENT THE SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
No. 11/2014/L-CTN Hanoi, June 30, 2014
ORDER
On the promulgation of law1
THE PRESIDENT OF THE SOCIALIST REPUBLIC OF VIETNAM
Pursuant to Articles 88 and 91 of the Constitution of the Socialist

Republic of Vietnam;
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Pursuant to Article 91 of the Law on Organization of the National
Assembly;
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Documents,
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Pursuant to Article 57 of the Law on the Promulgation of Legal
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PROMULGATES:
The Law on Bankruptcy,

which was passed on June 19, 2014, by the XIIIth National Assembly of
the Socialist Republic of Vietnam at its 7th session.
President of the Socialist Republic of Vietnam

TRUONG TAN SANG
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Công Báo Nos 683-684 (17/7/2014)
Vietnam Law & Legal Forum 1

THE NATIONAL THE SOCIALIST REPUBLIC OF VIETNAM
ASSEMBLY Independence - Freedom - Happiness
No. 51/2014/QH13
LAW ON BANKRUPTCY2
Pursuant to the Constitution of the Socialist Republic of Vietnam;
The National Assembly promulgates the Law on Bankruptcy.
Chapter I
GENERAL PROVISIONS
Article 1. Scope of regulation
This Law prescribes the order and procedures for submission and
acceptance of petitions for initiation of bankruptcy procedures, and for
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initiation of bankruptcy procedures; the determination of property obligations
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and measures to preserve property in the course of bankruptcy settlement; the
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procedures for business restoration, the declaration of bankruptcy and
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enforcement of decisions on declaration of bankruptcy.
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Article 2. Subjects of application
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This Law applies to enterprises, cooperatives and unions of cooperatives
(below collectively referred to as cooperatives) which are established and
operate in accordance with law.
Article 3. Application of the Law on Bankruptcy
1. The Law on Bankruptcy applies when the bankruptcy of enterprises
and cooperatives established in the territory of the Socialist Republic of
Vietnam is settled.
2. Where a treaty to which the Socialist Republic of Vietnam is a
contracting party contains provisions different from those of this Law, the
provisions of such treaty prevail.
Article 4. Interpretation of terms
In this Law, the terms and expressions below are construed as follows:
1. Insolvent enterprise or cooperative means an enterprise or a
cooperative that fails to perform the obligation to pay its debts within 3
months after such debts become due.
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Công Báo Nos 683-684 (17/7/2014)

2. Bankruptcy means the state of insolvency of an enterprise or a
cooperative which is declared bankrupt by a people’s court.
3. Creditors means individuals, agencies and organizations that have the
right to request an enterprise or a cooperative to perform the obligation to pay
debts. Creditors include unsecured creditors, partially secured creditors and
secured creditors.
4. Unsecured creditor means an individual, agency or organization that
has the right to request an enterprise or a cooperative to perform the
obligation to pay a debt not secured with assets of the enterprise or
cooperative or a third party.
5. Secured creditor means an individual, agency or organization that has
the right to request an enterprise or a cooperative to perform the obligation to
pay a debt secured with assets of the enterprise or cooperative or a third
party.
6. Partially secured creditor means an individual, agency or
organization that has the right to request an enterprise or a cooperative to
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perform the obligation to pay a debt secured with assets of the enterprise or
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cooperative or a third party in case the value of the security assets is lower
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than that of such debt.
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7. Asset management officer means an individual who practices
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management and liquidation of assets of an insolvent enterprise or cooperative
in the course of bankruptcy settlement.
8. Asset management and liquidation firm means an enterprise that
practices management and liquidation of assets of an insolvent enterprise or
cooperative in the course of bankruptcy settlement.
9. Bankruptcy procedure-conducting persons include chief justices of
people’s courts, judges; chief procurators of people’s procuracies,
procurators; asset management offiers, asset management and liquidation
firms; heads of civil judgment enforcement agencies and enforcers in the
course of bankruptcy settlement.
10. Bankruptcy procedure participants include creditors; employees;
insolvent enterprises and cooperatives; shareholders and groups of
shareholders; cooperative members or cooperatives being members of unions
of cooperatives; debtors of enterprises and cooperatives and other persons
having related benefits and obligations in the course of bankruptcy
settlement.
11. Fee for filing petitions for initiation of bankruptcy procedures
(below referred to as bankruptcy fee) means a sum of money payable by a

bankruptcy procedure initiation petitioner to a people’s court for acceptance
of such petition.
12. Bankruptcy expenses means sums of money to be paid for the
bankruptcy settlement, including asset management officer and asset
management and liquidation firm expenses, audit expense, newspaper
announcement expense and other expenses prescribed by law.
13. Asset management officer and asset management and liquidation
firm expenses means sums of money to be paid for the bankruptcy settlement
by asset management officers and asset management and liquidation firms.
14. Advanced amount to pay bankruptcy expenses means a sum of
money decided by a people’s court to be paid in advance for newspaper
announcement and asset management officers and asset management and
liquidation firms.
Article 5. Persons having the right and obligation to file petitions for
initiation of bankruptcy procedures
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1. Unsecured creditors and partially secured creditors may file petitions
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for initiation of bankruptcy procedures in case indebted enterprises or
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cooperatives fail to perform the obligation to pay debts within 3 months after
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such debts become due.
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2. Employees, grassroots trade unions or immediate higher-level trade
unions in enterprises or cooperatives where no grassroots trade union has
been established may file petitions for initiation of bankruptcy procedures in
case such enterprises or cooperatives fail to perform the obligation to pay
salaries or other due debts to employees within 3 months after their
obligation becomes due.
3. At-law representatives of enterprises or cooperatives have the
obligation to file petitions for initiation of bankruptcy procedures when their
enterprises or cooperatives fall insolvent.
4. Owners of private enterprises, chairpesons of boards of directors of
joint-stock companies, chairpersons of members’ councils of limited liability
companies with two or more members, owners of single-member limited
liability companies, or partners of partnerships have the obligation to file
petitions for initiation of bankruptcy procedures when their enterprises fall
insolvent.
5. Shareholders or groups of shareholders holding at least 20% of
common shares for at least 6 consecutive months have the right to file
petitions for initiation of bankruptcy procedures when their joint-stock
companies fall insolvent. Shareholders or groups of shareholders holding
under 20% of common shares for at least 6 consecutive months have the right

to file petitions for initiation of bankruptcy procedures when their joint-stock
companies fall insolvent in cases prescribed in the company charters.
6. Cooperative members or at-law representatives of cooperatives being
members of unions of cooperatives may file petitions for initiation of
bankruptcy procedures when their cooperatives or unions of cooperatives fall
insolvent.
Article 6. Notification of insolvent enterprises and cooperatives
1. When detecting insolvent enterprises or cooperatives, individuals,
agencies or organizations shall notify such in writing to persons having the
right and obligation to file petitions for initiation of bankruptcy procedures
specified in Article 5 of this Law.
2. Notifying individuals, agencies or organizations shall ensure the
accuracy of their notifications. Individuals, agencies or organizations that
intentionally make false notifications, causing damage to enterprises or
cooperatives shall pay compensations for damage and be held responsible
before law.
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Article 7. Responsibility of related individuals, agencies and
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organizations to provide documents and evidences
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1. Within 15 days after receiving requests of creditors, enterprises,
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cooperatives, people’s courts, people’s procuracies, asset management officers or
asset management and liquidation firms, individuals, agencies and organizations
that currently manage and preserve documents and evidences related to cases of
bankruptcy shall provide fully and promptly such documents and evidences.
2. Individuals, agencies and organizations that fail to provide documents
and evidences under Clause 1 of this Article shall reply in writing, clearly
stating the reason. If they refuse to provide documents and evidences without
a plausible reason, they shall be handled in accordance with law.
Article 8. Jurisdiction of people’s courts to settle bankruptcy
1. People’s courts of provinces or centrally run cities (below referred to
as provincial-level people’s courts) have the jurisdiction to settle bankruptcy
of enterprises which have made business or enterprise registration or of
cooperatives which have made business or cooperative registration in such
provinces or centrally run cities and fall into one of the following cases:
a/ The case of bankruptcy involves assets located abroad or bankruptcy
procedure participants reside abroad;
b/ The insolvent enterprise or cooperative has branches and
representative offices in different districts, towns and provincial cities;

c/ The insolvent enterprise or cooperative has real estate in different
districts, towns and provincial cities;
d/ The case of bankruptcy falls under the jurisdiction of a people’s court
of district, town or provincial city (below referred to as district-level people’s
court) but is complex and is picked up by a provincial-level people’s court
for settlement.
2. District-level people’s courts have the jurisdiction to settle
bankruptcy of enterprises and cooperatives headquartered in their districts,
towns or provincial cities and not falling into the cases specified in Clause 1
of this Article.
3. The Supreme People’s Court shall guide the implementation of this
Article.
Article 9. Tasks and powers of bankruptcy procedure-conducting judges
1. To verify and collect documents and evidences related to petitions for
initiation of bankruptcy procedures in case of necessity.
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2. To decide to initiate or not to initiate bankruptcy procedures.
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3. To decide on appointment or change of asset management officers
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and asset management and liquidation firms.
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4. To supervise operation of asset management officers and asset
management and liquidation firms.
5. To decide on audit of insolvent enterprises or cooperatives in case of
necessity.
6. To decide on sale of insolvent enterprises or cooperatives after
initiating the bankruptcy procedures in order to cover bankruptcy expenses.
7. To decide on application of provisional urgent measures in
accordance with law.
8. To apply the measure of banning involved persons from leaving their
places of residence and request competent agencies to escort representatives
of insolvent enterprises or cooperatives in accordance with law.
9. To organize creditors’ meetings.
10. To decide on recognition of resolutions of creditors’ meetings on
plans on restoration of business activities.
11. To decide on cessation of bankruptcy procedures.
12. To decide on declaration of bankruptcy of insolvent enterprises or
cooperatives.

13. To apply administrative sanctions and request competent agencies to
criminally settle bankruptcy cases in accordance with law.
14. To refer to previous decisions on bankruptcy settlement in similar
bankruptcy cases under the guidance of the Supreme People’s Court.
15. To refuse to settle bankruptcy in one of the cases specified in Clause
1, Article 10 of this Law.
16. To perform other tasks and exercise other powers in accordance with
law.
Article 10. Refusal or change of judges in the course of bankruptcy
settlement
1. A judge shall refuse to participate in settling bankruptcy or be
changed in the following cases:
a/ He/she is concurrently a bankruptcy procedure participant; a
representative or relative of a bankruptcy procedure participant in the same
bankruptcy case;
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b/ He/she has participated in the bankruptcy procedures as a procurator,
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an asset management officer, a defense counsel for lawful rights and interests
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of bankruptcy procedure participants, an examiner or evaluator, a price
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appraiser or intepreter in the same bankruptcy case;
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c/ He/she is in the same group of judges to settle the same bankruptcy
case and a relative of other judges in the group;
d/ He/she has participated in issuing the decision on banpruptcy
settlement in the same bankruptcy case;
dd/ There is a clear ground to believe that he/she is not impartial while
performing his/her duty.
2. The change of judges shall be decided by chief justices of people’s
courts. In case a judge in charge of bankruptcy is a chief justice, the change of
this judge shall be decided by a immediate higher-level people’s court. The
chief justice’s decision on change of a judge is the final one.
Article 11. Individuals and enterprises practicing asset management and
liquidation
Individuals and enterprises that may practice asset management and
liquidation in the course of bankruptcy settlement include:
1. Asset management officers;
2. Asset management and liquidation firms.
Article 12. Practice conditions of asset management officers

1. The following persons may be granted certificates to practice as asset
management officers:
a/ Lawyers;
b/ Auditors;
c/ Persons who possess a bachelor degree in law, economics,
accounting, finance or banking and have at least 5 years’ experience in their
professional fields.
2. Conditions for a person to practice as an asset management officer:
a/ Having full civil act capacity;
b/ Having good ethical quality and sense of responsibility, and being
upright, honest and impartial;
c/ Possessing an asset management officer practice certificate.
3. The Government shall stipulate in detail the grant of asset
management officer practice certificates and state management of asset
management officers.
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Article 13. Asset management and liquidation firms
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1. The following types of enterprise may practice asset management and
liquidation in the course of bankruptcychuannccc settlement:
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a/ Partnerships;
b/ Private enterprises.
2. Conditions for an enterprise to practice asset management and
liquidation:
a/ A partnership that has at least two partners being asset management
officers or its general director or director being an asset management officer;
b/ A private enterprise that has its owner being an asset management
officer and concurrently its director.
3. The Government shall stipulate in detail the asset management and
liquidation and state management of asset management and liquidation firms.
Article 14. Individuals who may not practice asset management and
liquidation
1. Cadres, civil servants, public employees; officers, professional
soldiers and defense workers in agencies and units of the People’s Army;
professional officers and non-commissioned officers in agencies and units of
the People’s Public Security.

2. Persons who are being examined for penal liability; convicted persons
who have not had their convictions remitted; persons who are subject to the
administrative handling measure of consigning into compulsory education
establishments or compulsory detoxication facilities.
3. Persons who have lost their civil act capacity or have their civil act
capacity restricted.
Article 15. Revocation of asset management officer practice certificates
1. A person who has been granted an asset management officer practice
certificate and falls into one of the following cases shall have his/her
certificate revoked:
a/ He/she is a cadre, civil servant or public employee; an officer, a
professional soldier or defense worker in an agency or unit of the People’s
Army; a professional officer or non-commissioned officer in an agency or
unit of the People’s Public Security.
b/ He/she has been convicted and his/her sentence has taken legal effect;
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c/ He/she has his/her lawyer or auditor practice certificate revoked;
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d/ He/she has been changed under Points a and b, Clause 1, Article 46 of
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this Law in at least two bankruptcy cases.
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2. The Government shall stipulate in detail the revocation of asset
managemente officer practice certificates.
Article 16. Rights and obligations of asset management officers and
asset management and liquidation firms
1. To manage assets, supervise business operations, conduct liquidation
of assets of insolvent enterprises and cooperatives, which cover:
a/ Verifing, collecting and managing documents and evidences related to
the operation of such enterprises or cooperatives;
b/ Making lists of assets, creditors and debtors;
c/ Preserving assets; preventing the sale or transfer of assets without
permission of judges; preventing the dispersion of assets; maximizing the
asset value of such enterprises or cooperatives upon the sale and liquidation
of assets;
d/ Supervising the business operation of such enterprises or cooperatives
in accordance with law;
dd/ Hiring individuals and organizations to perform jobs in accordance
with law;

e/ Proposing to judges the sale of assets of such enterprises or
cooperatives to cover bankruptcy expenses;
g/ Selling assets under decisions of judges to cover bankruptcy
expenses;
h/ Organizing the asset valuation and liquidation in accordance with this
Law; reporting to civil judgment enforcement agencies and notifying related
bankruptcy procedure participants of the assignment of individuals and
organizations to conduct the liquidation of assets;
i/ Remitting proceeds into accounts initiateed by people’s courts and
competent civil judgment enforcement agencies at banks.
2. To represent enterprises or cooperatives in case such enterprises or
cooperatives have no at-law representatives.
3. To report on the status of assets, liabilities and operation of
enterprises or cooperatives, and participate in the elaboration of plans on
rehabilitation of business operation of insolvent enterprises or cooperatives.
4. To request judges to:
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a/ Collect documents and evidences;
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b/ Declare transactions invalid and decide to recover illegally sold or
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transferred assets of enterprises or cooperatives;
c/ Apply provisional urgent measures; apply administrative sanction;
forward dossiers to agencies with criminal handling competence in
5. To enjoy remuneration and perform the professional liability
insurance responsibility in accordance with law.
6. To report on the performance of their tasks and the exercise of their
powers as requested by judges and civil judgment enforcement agencies; to
be anwerable to judges and civil judgment enforcement agencies and held
responsible before law for the performance of their tasks and the exercise of
their powers.
Article 17. Tasks and powers of civil judgment enforcement agencies
1. To enforce decisions on application of provisional urgent measures,
decisions to declare transactions invalid, decisions on bankruptcy declaration
and other decisions in accordance with this Law.
2. To request asset management officers and asset management and
liquidation firms to conduct the asset valuation and liquidation; to conduct
the asset liquidation in the cases specified in Clause 4, Article 121 of this
Law.

3. To supervise operation of asset management officers and asset
management and liquidation firms upon the liquidation of assets of bankrupt
enterprises or cooperatives; to request asset managemet officers and asset
management and liquidation firms to report on the asset liquidation.
4. To propose people’s courts to change asset managemet officers and
asset management and liquidation firms in the course of liquidation of assets
of bankrupt enterprises or cooperatives under Article 46 of this Law.
5. To divide assets of enterprises or cooperatives under decisions of
people’s courts.
6. To decide to terminate the enforcement of decisions to declare
enterprises or cooperatives bankrupt.
7. To perform other rights and exercise other powers in accordance with
the law on judgment enforcement.
Article 18. Rights and obligations of bankruptcy procedure participants
1. To fulfill requests of judges, asset management officers, asset
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management and liquidation firms and civil jugdment enforcement agencies
in accordance with the bankruptcy law.
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settlement.
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2. To provide documents and evidences related to the bankruptcy
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3. To request individuals, agencies and organizations that are keeping
and managing documents and evidences to provide such documents and
evidences related to their lawful rights and interests for submission to courts.
4. To request judges, asset management officers and asset management
and liquidation firms to verify and collect documents and evidences which
they cannot verify and collect or invite expert examination, valuation and
appraisal of prices of assets; to request judges to decide on audit of insolvent
enterprises or cooperatives; to request judges to summon witnesses.
5. To know and record or copy documents and evidences produced by
other bankruptcy procedure participants or collected by judges.
6. To request the application, change or cancellation of provisional
urgent measures.
7. To receive valid notices for exercise of their rights and performance
of their obligations.
8. To protect themselves or ask others to protect their lawful rights and
interests.
9. To attend creditors’ meetings.

10. To request change of asset management officers and asset
management and liquidation firms under Article 46 of this Law.
11. To request asset management officers and asset management and
liquidation firms to add creditors and debtors to the lists of creditors and
debtors.
12. To propose asset management officers and asset management and
liquidation firms to recover sums of money and assets of debtors.
13. To be present as requested by asset management officers and asset
management and liquidation firms or under summons of people’s courts, and
abide by decisions of people’s courts in the course of bankruptcy settlement.
14. To participate in the asset management and liquidation as requested
by judges, civil judgment enforcement agencies, asset management officers
or asset management and liquidation firms.
15. To request review of decisions of people’s courts in accordance with
this Law.
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16. In case individuals participating in bankruptcy procedures die, their
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lawful heirs shall exercie the rights and perform the obligations under this
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Article 19. Rights and obligations of persons filing petitions for
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1. Rights and obligations of bankruptcy procedure participants
prescribed in Article 18 of this Law.
2. To propose to people’s courts names of asset management officers
and asset management and liquidation firms before bankruptcy procedures
are initiated.
3. To pay the bankruptcy fee and advance bankruptcy expenses, except
when they are not required to do so.
4. To be honest in filing petitions for initiation of bankruptcy
procedures.
Article 20. Rights and obligations of insolvent enterprises and
cooperatives
1. Rights and obligations of bankruptcy procedure participants
prescribed in Article 18 of this Law.
2. To raise their opinions on the acceptance or rejection of part or the
whole claims of persons filing petitions for initiation of bankruptcy
procedures.

3. To publicly notify decisions on initiation of bankruptcy procedures
upon receiving such decisions.
Article 21. Supervision of law observance in the course of bankruptcy
settlement
1. People’s procuracies shall supervise the law observance in the course
of bankruptcy settlement and exercise the rights to file requests,
recommendations or protests in accordance with this Law.
2. People’s procuracies shall attend meetings to examine their
recommendations or protests; supervise people’s courts’ decisions on
bankruptcy settlement.
Article 22. Bankruptcy fee
Persons filing petitions for initiation of bankruptcy procedures shall pay
a bankruptcy fee in accordance with the law on court fees and charges.
Persons filing requests specified in Clause 2, Article 5 and Point a, Clause 1,
Article 105 of this Law are not required to pay a bankruptcy fee.
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Article 23. Bankruptcy expenses and advanced amount to pay
bankruptcy expenses
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1. Bankruptcy expenses shall be paid with the value of assets of
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insolvent enterprises or cooperatives.
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2. Persons filing petitions for initiation of bankruptcy procedures shall
advance an amount to pay bankruptcy expenses, except those specified in
Clause 2, Article 5 and Point a, Clause 1, Article 105 of this Law.
3. People’s courts shall assign asset management officers and asset
management and liquidation firms to sell some assets of insolvent enterprises
or cooperatives to cover bankruptcy expenses. The valuation, revaluation and
sale of assets must comply with Articles 122, 123 and 124 of this Law.
4. People’s courts shall decide on levels of bankruptcy expenses to be
advanced or paid on a case-by-case basis in accordance with law and decide
on refund of advanced amounts to pay bankruptcy expenses, except when
persons filing petitions for initiation of bankruptcy procedures violate the
provision of Clause 4, Article 19 of this Law.
Article 24. Asset management officer and asset management and
liquidation firm expenses
1. Asset management officer and asset management and liquidation firm
expenses shall be calculated based on time spent, efforts made and results of
tasks performed by these officers and firms.

2. The Government shall stipulate in detail asset management officer
and asset management and liquidation firm expenses.
Article 25. Requests for, provision and notification of documents in the
bankruptcy settlement
People’s courts, people’s procuracies, civil judgment enforcement
agencies, asset management officers and asset management and liquidation
firms have the obligation to request, provide and notify documents to
bankruptcy procedure participants in accordance with this Law and the civil
procedure law.
Chapter II
PETITIONS FOR INITIATION OF BANKRUPTCY PROCEDURES
AND ACCEPTANCE THEREOF
Article 26. Petitions of creditors for initiation of bankruptcy procedures
1. When requesting people’s courts to initiate bankruptcy procedures,
creditors specified in Clause 1, Article 5 of this Law shall file written
petitions.
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2. A petition for initiation of bankruptcy procedures must have the
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following principal contents:
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a/ Date of making;
b/ Name of the people’s court with jurisdiction to settle bankruptcy;
c/ Name and address of the filer;
d/ Name and address of the enterprise or cooperative for which
bankruptcy procedures are requested to be initiated;
dd/ Due debts.
Enclosed with the petition must be evidences to prove due debts.
3. In case there is a proposal on appointment of an asset management
officer or asset management and liquidation firm, the petition for initiation of
bankruptcy procedures must clearly state the name and address of such asset
management officer or asset management and liquidation firm.
Article 27. Petitions of employees and trade union representatives for
employees and trade union representatives specified in Clause 2, Article 5 of
this Law shall file written petitions.

a/ Date of making;
b/ Name of the people’s court with jurisdiction to settle bankruptcy;
c/ Name and address of the filer;
d/ Name and address of the enterprise or cooperative for which
bankruptcy procedures are requested to be initiated;
dd/ Total salaries and other due debts not yet paid by the enterprise or
cooperative to employees.
Enclosed with the petition must be evidences to prove such salaries and
due debts.
3. In case there is a proposal on appointment of an asset management
officer or asset management and liquidation firm, the petition for initiation of
bankruptcy procedures must clearly state the name and address of such asset
4. From the date of petition filing, employees and trade union
representatives have the rights and obligations of creditors in accordance
with this Law.
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Article 28. Petitions of insolvent enterprises and cooperatives for
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1. Enterprises or cooperatives specified in Clauses 3 and 4, Article 5 of
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this Law shall file petitions for initiation of bankruptcy procedures.
a/ Date of making;
b/ Name of the people’s court with the jurisdiction to settle bankruptcy;
c/ Name and address of the enterprise or cooperative;
d/ Name and address of the person filing the petition;
dd/ Grounds for requesting the initiation of bankruptcy procedures.
3. A petition for initiation of bankruptcy procedures shall be enclosed
with the following papers and documents:
a/ Financial statements of the enterprise or cooperative for the last three
years. In case the enterprise or cooperative has been established and
operating for less than 3 years, the petition shall be enclosed with its financial
statements for the entire period of its operation;
b/ A written explanation about the cause of the insolvency; a report on
results of the implementation of measures to rehabilitate the enterprise or
cooperative which could not remedy the state of insolvency;

c/ A detailed list of assets of the enterprise or cooperative and their
locations;
d/ A list of creditors and a list of debtors, clearly stating names and
addresses of creditors, debtors, due or undue debts and loans which are
secured, unsecured or partially secured;
dd/ Papers and documents related to the establishment of the enterprise
or cooperative;
e/ Results of appraisal of prices and valuation of remaining assets (if
any).
4. In case there is a proposal on appointment of an asset management officer
or asset management and liquidation firm, the petition for initiation of bankruptcy
procedures must clearly state the name and address of such asset management
officer or asset management and liquidation firm.
5. Persons specified in Clauses 3 and 4, Article 5 of this Law who fail to
file petitions for initiation of bankruptcy procedures when enterprises and
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cooperatives become insolvent shall be held responsible before law. In case
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of damage caused by failure to file petitions for initiation of bankruptcy
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procedures after enterprises or cooperatives become insolvent, they shall pay
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compensations.
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Article 29. Petitions of shareholders or groups of shareholders of joint-
stock companies, cooperative members or cooperatives being members of
unions of cooperatives for initiation of bankruptcy procedures
shareholders or groups of shareholders of joint-stock companies, cooperative
members or at-law representatives of cooperatives being members of unions
of cooperatives specified in Clauses 5 and 6, Article 5 of this Law shall file
written petitions.
contents specified in Clause 2, Article 28 of this Law and be enclosed with
documents (if any) specified in Clauses 3 and 4, Article 28 of this Law.
Article 30. Methods of filing petitions for initiation of bankruptcy
procedures
1. Persons making petitions for initiation of bankruptcy procedures shall
submit their petitions and enclosed documents and evidences to people’s
courts with jurisdiction to settle bankruptcy by either of the following
methods:
a/ Filing directly with people’s courts;
b/ Sending by post to people’s courts.

2. Filing date is the date when the people’s court receives the petition or
date of postmark of the sending post office.
Article 31. Assignment of judges to settle petitions for initiation of
bankruptcy procedures
1. Within 3 working days after receiving a petition for initiation of
bankruptcy procedures, the chief justice of a people’s court shall assign a
judge or a team of 3 judges to settle the petition.
2. The Chief Justice of the Supreme People’s Court shall issue the
working regulation of teams of judges mentioned in Clause 1 of this Article.
Article 32. Handling of petitions for initiation of bankruptcy procedures
1. Within 3 working days after being assigned, a judge shall examine the
petition for initiation of bankruptcy procedures and handle it as follows:
a/ In case the petition is valid, the judge shall notify the person filing the
petition to pay a bankruptcy fee and advance bankruptcy expenses, except
when such person is not required to do so;
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b/ In case the petition does not fully have the contents specified in
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Article 26, 27, 28 or 29 of this Law, the judge shall notify the person filing
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the petition to modify or supplement it;
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c/ To forward the petition to another people’s court with jurisdiction if
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the petition falls under the jurisdiction of such people’s court;
d/ To return the petition.
2. Notices of handling of petitions for initiation of bankruptcy
procedures must be in writing and sent to persons that have filed such
petitions and insolvent enterprises or cooperatives.
Article 33. Forwarding of petitions for initiation of bankruptcy
procedures to people’s courts with jurisdiction and settlement of requests for
review of petition forwarding
1. People’s courts that handle petitions under Point c, Clause 1, Article
32 of this Law shall forward petitions for initiation of bankruptcy procedures
and enclosed documents and evidences to people’s courts with jurisdiction to
settle bankruptcy and notify such to persons that have filed such petitions.
2. Within 3 working days after receiving a decision on petition
forwarding, the person that has filed the petition or the people’s court to
which the petition is forwarded may request the chief justice of the immediate
higher-level people’s court to review the petition forwarding.
3. Within 3 working days after receiving a request, the chief justice of
the immediate higher-level people’s court shall settle the request for review

of the petition forwarding. The decision of the chief justice of the immediate
higher-level people’s court is the final one.
Article 34. Notification of modification or supplementation of petitions
for initiation of bankruptcy procedures
If petitions for initiation of bankruptcy procedures do not fully have the
contents specified in Articles 26, 27, 28 and 29 of this Law, people’s courts
shall notify such to the filers for modification or supplementation. The time
limit for modification or supplementation of petitions is prescribed by
people’s courts but must not exceed 10 working days after persons having
filed such petitions are notified. In special cases, people’s courts may prolong
the time limit to no more than 15 days.
Article 35. Return of petitions for initiation of bankruptcy procedures
1. A people’s court shall decide to return a petition for initiation of
bankruptcy procedures in the following cases:
a/ The filer is not the one specified in Article 5 of this Law;
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b/ The filer fails to modify or supplement the petition under Article 34
of this Law;
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c/ Another people’s court has initiated bankruptcy procedures for the
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insolvent enterprise or cooperative;
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d/ The filer withdraws the petition under Clause 2, Article 37 of this
Law;
dd/ The filer fails to pay a bankruptcy fee or advance an amount to pay
bankruptcy expenses, except when he/she is not required to do so.
2. Decisions of people’s courts on return of petitions for initiation of
bankruptcy procedures must clearly state the reason for return. Within 3
working days after issuing these decisions, people’s courts shall send them to
the filers and the same-level people’s procuracies.
Article 36. Requests for review, recommendations about return of
petitions for initiation of bankruptcy procedures
1. Within 3 working days after receiving the people’s court’s decision
on return of a petition for initiation of bankruptcy procedures, a person
requesting the initiation of bankruptcy procedures may request the review of
such decision, while the same-level people’s procuracy may file
recommendations about the decision on return of such request with the chief
justice of the people’s court having issued the decision.
2. Within 3 working days after receiving a request for review or a
recommendation about the decision on return of the petition for initiation of

bankruptcy procedures, the chief justice of the people’s court having issued
the decision shall issue either of the following decisions:
a/ Decision to uphold the decision on return of the petition for initiation
of bankruptcy procedures;
b/ Decision to cancel the decision on return of the petition for initiation
of bankruptcy procedures and accept the request or recommendation in
accordance with this Law.
3. Within 5 working days after receiving a decision on handling of the
request for review or the recommendation about the decision on return of the
petition for initiation of bankruptcy procedures, the person requesting the
initiation of bankruptcy procedures may request the review while the
people’s procuracy may file a recommendation with the chief justice of the
immediate higher-level people’s court for consideration and handling.
4. Within 7 working days after receiving a request for review or a
recommendation about the return of the petition for initiation of bankruptcy
procedures, the chief justice of the immediate higher-level people’s court
shall issue either of the following decisions:
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a/ Decision to uphold the decision on return of the petition for initiation
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of bankruptcy procedures;
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b/ Decision to cancel the decision on return of the petition for initiation
of bankruptcy, and request the people’s court to accept the request or
recommendation procedures in accordance with this Law.
5. The decision of the chief justice of the immediate higher-level
people’s court on handling of the request for review or the recommendation
is the final one. Such decision must be sent to the requester, the same-level
people’s procuracy, the people’s procuracy having filed the recommendation
and the people’s court having issued the decision on return of the petition.
Article 37. Negotiations between creditors filing petitions for initiation
of bankruptcy procedures and insolvent enterprises or cooperatives
1. Within 3 working days after people’s courts receive valid petitions for
initiation of bankruptcy procedures, insolvent enterprises or cooperatives and
creditors having filed such petitions may request in writing these people’s
courts for negotiation on withdrawal of petitions.
People’s courts shall set a time limit for negotiation which must not
exceed 20 days after receiving a valid petition for initiation of bankruptcy
procedures.

2. In case parties can reach agreement on withdrawal of the petition for
initiation of bankruptcy procedures, the people’s court shall return the
petition.
3. In case the negotiation fails or no negotiation is carried out by parties
before the time limit for negotiation expires, the people’s court shall notify
the person having filed the petition for him/her to pay a bankruptcy fee or
advance bankruptcy expenses and accept the petition in accordance with this
Law.
4. The negotiation between parties under this Article must not
contravene the bankruptcy law.
Article 38. Procedures for payment of the bankruptcy fee and advance
payment of bankruptcy expenses
1. Within 3 working days after receiving a valid petition for initiation of
bankruptcy procedures, a people’s court shall estimate bankruptcy expenses
to be advanced and notify them to the petitioner for payment of the
bankruptcy fee and advance payment of bankruptcy expenses.
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In case of a proposal on negotiation, the sending of a notice to the
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petitioner for initiation of bankruptcy procedures for payment of the
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bankruptcy fee and advance payment of bankruptcy expenses must comply
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with Clause 3, Article 37 of this Law.
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2. Within 15 days after receiving a notice of payment of the bankruptcy
fee and advance payment of bankruptcy expenses, the petitioner for initiation
of bankruptcy procedures shall:
a/ Pay the bankruptcy fee to the civil judgment enforcement agency;
b/ Pay in advance bankruptcy expenses into the bank account opened by
the people’s court.
Article 39. Acceptance of petitions for initiation of bankruptcy
procedures
People’s courts shall accept petitions for initiation of bankruptcy
procedures when receiving receipts of payment of the bankruptcy fee and
advance payment of bankruptcy expenses. In case payment of the bankruptcy
fee and advance payment of bankruptcy expenses are not required, the date of
accceptance is the date when a people’s court receives a valid petition for
initiation of bankruptcy procedures.
Article 40. Notification of acceptance of petitions for initiation of
1. Within 3 working days after accepting a petition, a people’s court
shall notify in writing the acceptance of the petition to the petitioner,

insolvent enterprise or cooperative, agencies and organizations currently
settling cases and matters related to the insolvent enterprise or cooperative,
and same-level people’s procuracy.
In case the petitioner for initiation of bankruptcy procedures is the at-
law representative of the insolvent enterprise or cooperative, the people’s
court shall notify such to creditors notified by the enterprise or cooperative.
2. In case the petitioner is not the insolvent enterprise or cooperative,
within 15 days after being notified by the people’s court, the insolvent
enterprise or cooperative shall produce to the people’s court papers and
documents specified in Clause 3, Article 28 of this Law.
Article 41. Suspension of the settlement of requests for performance of
the property obligation by insolvent enterprises and cooperatives
Within 5 working days after a people’s court accepts a bankruptcy case,
the performance of the property obligation by the insolvent enterprise or
cooperative shall be suspended as follows:
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1. The civil judgment enforcement agency shall suspend the
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enforcement of property-related civil judgments against the insolvent
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enterprise or cooperative, except the judgment or decision forcing this
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enterprise or cooperative to pay compensation for life, health or honor or pay
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salaries to employees. The suspension must comply only with the law on civil
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judgment enforcement;
2. The people’s court or arbitration shall suspend the settlement of a
civil, business, commercial or labor case related to the property obligation in
which the enterprise or cooperative is a party. The procedures for suspension
must comply only with the civil procedure and commercial arbitration laws.
The people’s court shall separate and suspend the settlement of the civil
part in a criminal or administrative case related to the property obligation in
which the enterprise or cooperative is a party. Procedures for separation and
suspension must comply with the criminal procedure and administrative
procedure laws;
3. Competent agencies and organizations shall suspend the handling of
security assets of enterprises or cooperatives for secured creditors.
In case security assets are likely to be destroyed or have their value
considerably decreased, they shall be handled under Clauses 2 and 3, Article
53 of this Law.
Chapter III
INITIATION OF BANKRUPTCY PROCEDURES
Article 42. Decisions to initiate or not to initiate bankruptcy procedures

1. Within 30 days after accepting a petition for initiation of bankruptcy
procedures, a judge shall issue a decision to initiate or not to initiate
bankruptcy procedures, except the case specified in Article 105 of this Law.
2. Judges shall issue decisions to initiate bankruptcy procedures when
enterprises or cooperatives fall insolvent.
3. In case of necessity, before issuing a decision to initiate bankruptcy
procedures, a judge may hold a meeting with the participation of the
petitioner, the owner or lawful representative of the enterprise or cooperative
for which bankruptcy procedures are requested to be initiated, and related
persons and organizations to consider and examine evidences proving that
the enterprise or cooperative is insolvent.
4. A decision to initiate bankruptcy procedures must have the following
principal contents:
a/ Date of issuance;
b/ Name of the people’s court; full name of the judge to carry out
bankruptcy procedures;
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c/ Acceptance date and number of the petition for initiation of
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bankruptcy procedures; name and address of the petitioner;
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d/ Name and address of the insolvent enterprise or cooperative;
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dd/ Time and places of declaration by creditors and legal consequences
of failure to make declaration.
5. If finding that the enterprise or cooperative does not fall into the case
specified in Clause 2 of this Article, the people’s court shall issue a decision
not to initiate bankruptcy procedures.
In this case, the petitioner for initiation of bankruptcy procedures shall
be refunded the advanced amount for bankruptcy expenses; request the
insolvent enteprise or cooperative to resume performing the property
obligation already suspended under Article 41 of this Law.
6. A decision to initiate or not to initiate bankruptcy procedures takes
effect on the date of its issuance.
Article 43. Notification of decisions to initiate or not to initiate
1. A people’s court’s decision to initiate bankruptcy procedures shall be
sent to the petitioner, insolvent enterprise or cooperative, creditors, same-
level people’s procuracy, civil judgment enforcement agency, tax office,
business registration office of the locality where the enterprise or cooperative
is headquartered and published on the national enterprise registration portal,

website of the people’s court and 2 consecutive issues of a newspaper of the
locality where the insolvent enterprise or cooperative is headquartered.
2. A people’s court’s decision not to initiate bankruptcy procedures shall
be sent to the petitioner, enterprise or cooperative for which bankruptcy
procedures are requested to be initiated and same-level people’s procuracy.
3. The time limit for sending and notification of a decision to initiate or
not to initiate bankruptcy procedures is 3 working days after the people’s
court issues such decision.
Article 44. Settlement of requests for review of or protests against
decisions to initiate or not to initiate bankruptcy procedures
1. Within 7 working days after receiving a decision to initiate or not to
initiate bankruptcy procedures, a bankruptcy procedure participant may
request review of, while the same-level people’s procuracy may protest
against, such decision.
2. Right after receiving a review request or protest, the people’s court
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that has issued the decision to initiate or not to initiate bankruptcy procedures
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shall send the dossier of the bankruptcy case to the immediate higher-level
people’s court for settlement.
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3. Within 3 working days after receiving the dossier of the bankruptcy
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case enclosed with the request for review or protest, the immediate higher-
level people’s court shall appoint a group of 3 judges to consider and settle
the review request or protest and send the dossier of the bankruptcy case to
the same-level people’s procuracy.
case sent by the people’s court, the same-level people’s procuracy shall return
the dossier to the people’s court.
case returned by the same-level people’s procuracy, the group of judges shall
hold a meeting for considering and settling the review request or protest.
6. A meeting of the group of judges shall be attended by the people’s
procuracy and have a minutes recorded by the people’s court clerk. In case of
necessity, other persons may be invited to the meeting to provide more
information on unclear issues.
7. The group of judges may issue one of the following decisions:
a/ Decision to uphold the decision to initiate or not to initiate bankruptcy
procedures;
b/ Decision to cancel the decision not to initiate bankruptcy procedures
and assign the people’s court that has issued the decision not to initiate

bankruptcy procedures to consider and issue a decision to initiate bankruptcy
procedures;
c/ Decision to cancel the decision to initiate bankruptcy procedures and
notify such to the people’s court that has issued the decision to initiate
bankruptcy procedures and bankruptcy procedure participants.
8. The decision of the group of judges is the final one and legally
effective.
9. The Chief Justice of the Supreme People’s Court shall issue the
working regulation of groups of judges settling requests for review of and
protests against decisions to initiate or not to initiate bankruptcy procedures.
Article 45. Appointment of asset management officers and asset
management and liquidation firms
1. Within 3 working days after issuing a decision to initiate bankruptcy
procedures, a judge shall appoint an asset management officer or asset
management and liquidation firm.
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2. Grounds for appointment of an asset management officer or asset
management and liquidation firm:
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a/ To be-appointed person possesses a certificate for practicing as an
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asset management officer; asset management and liquidation firm has a
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practice certificate;
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b/ The appointment of an asset management officer or asset management
and liquidation firm is proposed by the petitioner for initiation of bankruptcy
procedures;
c/ To be-appointed asset management officer or asset management and
liquidation firm has no interest related to the bankruptcy case;
d/ The settlement of the petition for initiation of bankruptcy procedures
requires such appointment;
dd/ To be-appointed asset management officer or asset management and
liquidation firm is not a relative of a bankruptcy procedure participant.
3. A document on appointment of an asset management officer or asset
management and liquidation firm must have the following principal contents:
a/ Date;
b/ Names and addresses of creditors and insolvent enterprise or
cooperative;
c/ Name and address of the appointed asset management officer or asset
management and liquidation firm;

d/ Summary of the petition for initiation of bankruptcy procedures;
dd/ Grounds for appointment of the asset management officer or asset
e/ Advanced amount to pay asset management officer or asset
management and liquidation firm expenses;
g/ Specific tasks and powers of the asset management officer or asset
h/ Signature of the judge and seal of the people’s court.
Article 46. Change of asset management officers and asset management
and liquidation firms
1. An asset management officer or asset management and liquidation
firm may be changed under the judge’s decision in the following cases:
a/ He/she/it breaches his/its obligations prescribed in this Law;
b/ There is a ground to believe that he/she/it is not impartial while
performing his/her/its tasks;
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his/her/its tasks.
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c/ A force majeure circumstance renders him/it unable to perform
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2. A decision on change of an asset management officer or asset
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management and liquidation firm must be in writing, clearly stating the
handling of advanced amount to pay expenses for the changed asset
management officer or asset management and liquidation firm, and promptly
sent to the asset management officer or asset management and liquidation
firm and bankruptcy procedure participants.
3. Within 3 working days after receiving a decision on change of the
asset management officer or asset management and liquidation firm,
bankruptcy procedure participants and asset management officer or asset
management and liquidation firm may file a request for review of the
decision with the chief justice of the people’s court with jurisdiction to settle
bankruptcy.
4. Within 3 working days after receiving a request for review of the
decision on change of the asset management officer or asset management and
liquidation firm, the chief justice of the people’s court shall consider and
issue either of the following decisions:
a/ Decision to reject the request for review of the decision on change of
the asset management officer or asset management and liquidation firm;
b/ Decision to cancel the decision on change of the asset management
officer or asset management and liquidation firm.

5. The decision of the chief judge of the people’s court mentioned in
Clause 4 of this Article is the final one.
6. In case of change specified at Points a and b, Clause 1 of this Article,
the asset management officer or asset management and liquidation firm shall
refund the whole advanced amount to pay asset management officer or asset
management and liquidation firm expenses. In case of change specified at
Point c, Clause 1 of this Aricle, the asset management officer or asset
management and liquidation firm may have expenses for performed jobs
paid.
7. Within 3 working days after the decision on his/her/its change is
issued, the changed asset management officer or asset management and
liquidation firm shall hand over performed jobs to the new one.
8. Asset management officers and asset management and liquidation
firms that are changed in the cases specified at Points a and b, Clause 1 of
this Article or fail to hand over performed jobs under Clause 7 of this Article
shall, depending on the nature and severity of their violations, be
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administratively sanctioned or examined for penal liability. If causing
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damage, they shall pay compensation in accordance with law.
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Article 47. Business operation of enterprises and cooperatives after
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decisions on initiation of bankruptcy procedures are issued
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1. After decisions on initiation of bankruptcy procedures are issued,
enterprises or cooperatives shall still continue their business operation but
submit to supervision by judges and asset management officers or asset
management and liquidation firms.
2. If seeing that at-law representatives of enterprises or cooperatives are
incapable of performing management or these enterprises or cooperatives
show signs of violation specified in Clause 1, Article 48 of this Law, judges
shall issue decisions on change of at-law representatives of such enterprises
or cooperatives at the request of the creditors’ meeting or asset management
officers or asset management and liquidation firms.
Article 48. Prohibited activities of enterprises and cooperatives after
decisions on initiation of bankruptcy procedures are issued
enterprises or cooperatives shall be prohibited from:
a/ Hiding, dispersing or donating their assets;
b/ Paying unsecured debts, except those arising after bankruptcy
procedures are initiated and salaries are paid to employees of enterprises or
cooperatives under Point c, Clause 1, Article 49 of this Law;

c/ Waiving the right to claim debts;
d/ Converting unsecured debts into debts secured or partially secured
with assets of enterprises or cooperatives.
2. All transactions specified in Clause 1 of this Article are invalid and
shall be handled under Article 60 of this Law.
Article 49. Supervision of operation of enterprises and cooperatives
after decisions on initiation of bankruptcy procedures are issued
enterprises or cooperatives shall report to asset management officers or asset
management and liquidation firms before:
a/ Conducting activities related to the borrowing, pledge, mortgage,
guarantee, purchase, sale, transfer or lease of assets; sale or conversion of
shares; transfer of asset ownership;
b/ Terminating the performance of valid contracts;
c/ Paying debts arising after the bankruptcy procedures are initiateed;
paying salaries to their employees.
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2. Reports may be made directly or sent by registered or unregistered
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mail, e-mail, facsimile or telex.
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3. Within 3 working days after receiving reports of enterprises or
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cooperatives, asset management officers or asset management and liquidation
firms shall send to these enterprises or cooperatives replies of whether or not
they are permitted to conduct the activities specified in Clause 1 of this
Article and be held responsible for their replies. Asset management officers
or asset management and liquidation firms shall report on their replies to
judges.
4. Activities specified in Clause 1 of this Article which are conducted
without consents of asset management officers or asset management and
liquidation firms shall be stopped while the original state shall be restored
and consequences remedied in accordance with law.
Article 50. Judicial mandate in the bankruptcy settlement
1. In the course of bankruptcy settlement, a people’s court may decide to
mandate another people’s court to recover assets or take testimonies of
bankruptcy procedure participants, conduct on-spot appraisal or valuation of
assets or take other measures to collect documents and evidences related to
the bankruptcy case.

2. A decision on judicial mandate must clearly state names and
addresses of bankruptcy procedure participants related to the mandate and
specific mandated jobs.
3. The people’s court receiving the mandate decision shall perform the
mandated jobs within 30 days after the receipt and notify in writing
performance results to the people’s court that has issued the mandate
decision. In case the mandate is impossible, it shall notify such in writing to
the people’s court that has issued the mandate decision, clearly stating the
reason for the impossibility of the mandate.
Chapter IV
PROPERTY OBLIGATIONS
Article 51. Valuation of property obligations
1. A property obligation of an enterprise or a cooperative which is
established before the people’s court issues a decision on initiation of
bankruptcy procedures shall be valued at the time of issuance of such
decision.
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2. A property obligation of an enterprise or a cooperative which is
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established after the people’s court issues a decision on initiation of
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bankruptcy procedures shall be valued at the time of issuance of the decision
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on bankruptcy declaration.
3. In case the property obligation mentioned in Clauses 1 and 2 of this
Article is not monetary one, the people’s court shall monetize such property
obligation.
Article 52. Determination of interests on debts
interests on debts shall be further charged as agreed upon but payment
thereof may be suspended.
If judges issue decisions to cease bankruptcy procedures under Article
86 of this Law or cease procedures for resumption of business operation
under Point a, Clause 1, Article 95 of this Law, the payment of interests will
no longer be suspended and the parties shall continue to pay interests as
agreed upon.
2. Interests on new debts arising after the initiation of bankruptcy
procedures until the enterprise or cooperative is declared bankrupt shall be
determined under agreements and in accordance with law.
3. From the date of issuance of decisions on declaration of bankruptcy
of enterprises or cooperatives, interests on debts shall no longer be charged.

Article 53. Settlement of secured debts
1. After the initiation of bankruptcy procedures, asset management
officers or asset management and liquidation firms shall propose to judges
the settlement of secured debts which has been suspended under Clause 3,
Article 41 of this Law. Judges shall consider the proposal and handle as
follows:
a/ In case security assets are used for carrying out procedures for
resumption of business operation, security assets shall be handled according
to the resolution of the creditors’ meeting;
b/ In case procedures for resumption of business operation are not
carried out or security assets are unnecessary for carrying out such
procedures, security assets shall be handled within the time limit stated in the
contracts, for secured contracts that have become due. For secured contracts
that have not become due, before declaring enterprises or cooperatives
bankrupt, people’s courts shall cease the performance of these contracts and
settle secured debts. The settlement of secured debts must comply with
Clause 3 of this Article.
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2. In case collaterals are in danger of being destroyed or having their
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value significantly decreased, asset management officers or asset
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management and liquidation firms shall propose judges to permit the
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immediate handling of such security assets under Clause 3 of this Article.
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3. The handling of collaterals under Point b, Clause 1 and Clause 2 of
this Article shall be conducted as follows:
a/ Collaterals shall be used to pay secured debts arising before people’s
courts accept petitions for initiation of bankruptcy procedures;
b/ In case the value of collaterals is not enough to pay debts, unpaid
debts shall be paid in the course of liquidation of assets of enterprises or
cooperatives. If the value of collaterals is larger than debts, the difference
shall be added to the value of assets of enterprises or cooperatives.
Article 54. Order of division of assets
1. When judges issue decisions on bankruptcy declaration, assets of
bankrupt enterprises or cooperatives shall be divided to pay in the following
order:
a/ Bankruptcy expenses;
b/ Salaries, severance allowances, social insurance and health insurance
owed to employees and other benefits under signed labor contracts and
collective labor agreements;

c/ Debts arising after the initiation of bankruptcy procedures for
resumption of business operation of enterprises or cooperatives;
d/ The financial obligation toward the State; unsecured debts payable to
creditors on the list of creditors; secured debts not yet paid for the reason that
the value of security debts is insufficient to pay.
2. After fully paying the payable amounts specified in Clause 1 of this
Article, the remaining value of assets of enterprises or cooperatives, if any,
shall belong to:
a/ Members of cooperatives or member cooperatives of unions;
b/ Owners of private enterprises;
c/ Owners of single-member limited liability companies;
d/ Members of limited liability companies with two or more members or
shareholders of joint-stock companies;
dd/ Partners of partnerships.
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3. If the value of assets is insufficient to pay the payable amounts
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specified in Clause 1 of this Article, entities of the same priority rank shall
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get paid in proportion to debt amounts owed to them.
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Article 55. Property obligation in case of joint or guaranteed obligation
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1. In case many enterprises or cooperatives have a joint obligation to pay
a debt and one or all of them falls/fall insolvent, creditors may request any of
these enterprises or cooperatives to pay the debt in accordance with law.
2. In case a guarantor falls insolvent, the guarantee shall be settled as
follows:
a/ If the guaranty obligation arises, the guarantor shall perform such
obligation. In case the guarantor fails to make full payment within the scope
of guarantee, the guarantee may request the guaranteed to pay the deficit;
b/ If the guaranty obligation has not yet arisen, the guaranteed shall take
another security measure, unless otherwise agreed by the guaranteed and
guarantee.
3. In case the guaranteed falls or both guarantor and guaranteed fall
insolvent, the guarantor shall bear responsibility for the guaranteed in
Article 56. Return of rented or borrowed assets when enterprises or
cooperatives are declared bankrupt
1. Within 10 working days after receiving a decision on bankruptcy
declaration, the owner of assets rented or borrowed by the enterprise or

cooperative for use in business operation shall produce title documents and
asset lease or lending contracts to the civil judgment enforcement agency for
receiving back assets.
2. In case an enterprise or a cooperative declared bankrupt has paid in
advance the rental while the lease term has not yet expired, the lessor may
receive back the leased asset only after refunding the rental amount
corresponding to the remaining lease term for the civil judgment enforcement
agency to add to assets of such enterprise or cooperative.
3. In case an enterprise or a cooperative declared bankrupt has
transferred the rented or borrowed asset to another party and cannot claim it
back, the lessor or lender may request a compensation for such asset as an
unsecured debt.
Article 57. Return of assets received as security
Insolvent enterprises or cooperatives shall return assets received as
security to individuals and organizations that have handed over such assets as
security for the performance of their obligations toward these enterprises or
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cooperatives before people’s courts initiate bankruptcy procedures in case
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such individuals and organizations have performed their obligations.
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Article 58. Retrieval of sold goods
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If sellers that have sent goods to purchasers being insolvent enterprises
or cooperatives have not yet been paid and purchasers have not yet received
goods, sellers may retrieve such goods. If insolvent enterprises or
cooperatives have received such goods and cannot return them, sellers shall
become unsecured creditors.
Chapter V
MEASURES TO PRESERVE ASSETS
Article 59. Transactions deemed invalid
1. Transactions of insolvent enterprises or cooperatives which are
conducted within 6 months before people’s courts issue decisions to initiate
bankruptcy procedures are deemed invalid if falling into one of the following
cases:
a/ They are involved in the transfer of assets not at market prices;
b/ They are to convert unsecured debts into ones secured or partially
secured with assets of enterprises or cooperatives;
c/ They are payments or clearing beneficial for one creditor for an undue
debt or larger than a due debt;
d/ They are donation of assets;

dd/ They are not for business operation of enterprises or cooperatives;
e/ They are for the purpose of dispersing assets of enterprises or
cooperatives.
2. Transactions of insolvent enterprises or cooperatives specified in
Clause 1 of this Article which are conducted with affiliated persons within 18
months before people’s courts issue decisions to initiate bankruptcy
procedures are deemed invalid.
3. Affiliated persons mentioned in Clause 2 of this Article include:
a/ Parent companies, managers of parent companies and persons
competent to appoint managers of affiliated companies;
b/ Affiliated companies in relation to their parent companies; enterprises
established by cooperatives in relation to such cooperatives;
c/ Persons or groups of persons that can influence the issuance of
decisions by agencies managing enterprises or cooperatives regarding
operation of such enterprises or cooperatives;
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d/ Managers of enterprises or cooperatives in relation to such enterprises
or cooperatives;
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dd/ Spouses, blood or adoptive parents, blood or adopted children and
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blood siblings of managers of enterprises or cooperatives or of members or
shareholders holding controlling contributed capital or shares;
e/ Individuals authorized to represent persons specified at Points a, b, c,
d and dd of this Clause;
g/ Enterprises in which persons specified at Points a, b, c, d, dd, e and h
of this Clause hold shares controlling the issuance of decisions by the
management of such enterprises;
h/ Groups of persons who agree to act together to acquire contributed
capital, shares or benefits of companies or to control the issuance of decisions
by companies.
4. Asset management officers or asset management and liquidation firms
shall scrutinize transactions of insolvent enterprises or cooperatives. If
detecting transactions specified in Clauses 1 and 2 of this Article, they shall
request people’s courts to consider and declare such transactions invalid.
Article 60. Declaration of invalid transactions
1. Within 10 working days after an asset management officer or asset
management and liquidation firm and bankruptcy procedure participant
request declaration of an invalid transaction or a people’s court detects a

transaction specified in Clause 1 or 2, Article 59 of this Law, the people’s
court shall issue either of the following decision:
a/ Decision to reject the request of the asset management officer or asset
management and liquidation firm and bankruptcy procedure participants;
b/ Decision to declare the transaction invalid, cancel security measures
and remedy consequences of the invalid transaction in accordance with law.
2. A decision to declare a transaction invalid takes effect on the date of
its issuance.
3. Within 5 working days after receiving a decision to declare a
transaction invalid, the insolvent enterprise or cooperative and party entering
into the transaction with the enterprise or cooperative may request in writing
the chief justice of the people’s court to review such decision.
4. Within 7 working days after receiving a request for review of the
decision to declare the transaction invalid, the chief justice of the people’s
court that has issued such decision shall issue either of the following
decision:
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a/ Decision to reject the review request;
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b/ Decision to cancel the decision to declare the transaction invalid. In
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case of a dispute, such dispute shall be settled under the provisions of
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Chapter X of this Law.
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5. Within 7 working days after receiving a decision specified at Point b,
Clause 1 of this Article, the civil judgment enforcement agency shall take the
initiative in enforcing such decision in accordance with the law on civil
judgment enforcement.
Article 61. Suspension or termination of performance of valid contracts
1. Within 5 working days after a people’s court accepts a petition for
initiation of bankruptcy procedures, if seeing that the current or future
performance of a valid contract may cause harm to an insolvent enterprise or
cooperative, creditors and such 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 53 of this Law.
2. A written request for a people’s court’s decision to suspend the
performance of a contract mentioned in Clause 1 of this Article must have the
a/ Date of making;
b/ Name and address of the requester;

c/ Number and title of the contract; date (day, month, year) of contract
signing;
d/ Party entering into the contract with the enterprise or cooperative;
dd/ Specific contents of the contract;
e/ Ground for the request.
3. Within 5 working days after receiving a written request, if accepting it
the people’s court shall issue a decision to suspend the performance of the
contract. If not accepting it, the people’s court shall notify such in writing to
the requester.
4. Within 5 working days after the people’s court issues a decision to
initiate bankruptcy procedures, the people’s court shall examine the
suspended contract as specified in Clause 1 of this Article to issue either of
the following decisions:
a/ Decision to continue the performance of the contract if the current or
future performance of the contract is not likely to cause harm to the enterprise
or cooperative;
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b/ Decision to terminate the performance of the contract and remedy
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consequences under Article 62 of this Law.
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5. In case people’s courts decide not to initiate bankruptcy procedures,
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people’s courts that have decided to suspend the performance of contracts
under Clause 1 of this Article shall cancel suspension decisions.
Article 62. Settlement and compensation for damage when the
performance of contracts is terminated
1. When the performance of a contract is terminated, if assets received
by the insolvent enterprise or cooperative from the contract still exist in
assets of the enterprise or cooperative, the party entering into the contract
with the enterprise or cooperative may claim back such assets and refund
sums of money which it has received from the enterprise or cooperative. If
such assets no longer exist, the party entering into the contract may have the
right of an unsecured creditor to the unrefunded sums of money.
2. In case the termination of the performance of a contract causes harm
to the party entering into the contract with the enterprise or cooperative, such
party may have the right of an unsecured creditor to the damage.
Article 63. Clearing of obligations
1. After people’s courts issue decisions to initiate bankruptcy
procedures, creditors and insolvent enterprises or cooperatives may clear
obligations in contracts established before such decisions are issued.

2. The clearing of obligations under Clause 1 of this Article is subject to
consent of asset management officers and asset management and liquidation
firms. Asset management officers and asset management and liquidation
firms shall report to judges on the clearing of obligations.
3. Methods of clearing obligations:
a/ In case the parties have equivalent property obligations, they are not
required to perform obligations to one another and such obligations are
deemed expired, unless otherwise provided by law;
b/ In case the parties have different property obligations and the asset
value difference belongs to the enterprise or cooperative, the party entering
into the contract with the enterprise or cooperative shall pay for the asset
value difference before adding it to its total assets;
c/ In case the parties have different property obligations and the asset
value difference belongs to the party entering into the contract with the
enterprise or cooperative, such party shall become an unsecured creditor for
the asset value difference.
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Article 64. Assets of insolvent enterprises and cooperatives
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1. Assets of an insolvent enterprise or cooperative include:
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a/ Assets and property rights held by the enterprise or cooperative at the
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time a people’s court issues a decision to initiate bankruptcy procedures;
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b/ Assets and property rights acquired after a people’s court issues a
decision to initiate bankruptcy procedures;
c/ Value of collaterals in excess of secured debts payable by the
enterprise or cooperative to secured creditors;
d/ Value of land use rights of the enterprise or cooperative determined in
accordance with the land law;
dd/ Assets recovered from acts of hiding or dispersing assets of the
enterprise or cooperative;
e/ Assets and property rights recovered from invalid transactions;
g/ Other assets specified by law.
2. Assets of an insolvent private enterprise or partneship include:
a/ Assets specified in Clause 1 of this Article;
b/ Assets of the owner of the private enterprise or partners not directly
used for business operation. In case the owner of the private enterprise or
partners has/have assets under common ownership, such assets shall be
divided in accordance with the civil law and relevant laws.

3. For cooperatives declared bankrupt, the handling of undivided assets
must comply with the law on cooperatives.
Article 65. Inventory of assets of insolvent enterprises and cooperatives
1. Within 30 days after receiving a decision to initiate bankruptcy
procedures, an insolvent enterprise or cooperative shall conduct the inventory
and valuation of its assets. In case of necessity, it shall request in writing a
judge to prolong such time limit for another 30 days for no more than twice.
The valuation of assets of the enterprise or cooperative must be conducted in
2. In case the lawful representative of the enterprise or cooperative is
absent, the person designated by the asset management officer or asset
management and liquidation firm to act as the representative of the enterprise
or cooperative shall conduct the inventory and valuation of its assets.
3. The table of inventory of valued assets must be promptly sent to the
people’s court carrying out bankruptcy procedures.
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4. If finding the inventory and valuation of assets of the enterprise or
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cooperative under Clause 1 of this Article inaccurate, the people’s court shall
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request the asset management officer or asset management and liquidation
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firm to organize the reinventory and revaluation of some or all of assets of
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the enterprise or cooperative. The value of assets may be determined and
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priced at market prices at the time of inventory.
5. In case the representative of the enterprise or cooperative and other
persons do not cooperate with the asset management officer or asset
management and liquidation firm in the inventory of assets or intentionally
falsify the inventoried assets, they shall be handled in accordance with law.
Article 66. Sending of debt claims
1. Within 30 days after a people’s court issue a decision to initiate
bankruptcy procedures, creditors shall send debt claims to the asset
2. A debt claim must have the following contents:
a/ Name, address, nationality and personal identity of the creditor or
his/its representative;
b/ Total payable debts, including due debts and unpaid due interests;
undue debts; secured debts and security method; unsecured debts payable by
the enterprise or cooperative; compensation (if any) to be paid under the
contract.
3. Enclosed with debt claims are documents and evidences proving such
debts. Debt claims shall be signed by creditors or their lawful representatives.

4. In case of a force majeure circumstance or an objective obstacle, the
period during which the force majeure circumstance or objective obstacle
exists shall not be counted into the time limit prescribed in Clause 1 of this
Article.
Article 67. Making of lists of creditors
1. Within 15 days after the time limit for sending debt claims expires, an
asset management officer or asset management and liquidation firm shall
make a list of creditors, collect documents related to debts and publicly post
up such list. A list of creditors must clearly state names, addresses,
nationalities and personal identities of creditors or their representatives, debts
owed to each creditor, including secured and unsecured debts, due and undue
debts.
2. A list of creditors shall be publicly posted up at the office of the
people’s court carrying out bankruptcy procedures and the head office of the
enterprise or cooperative and published on the enterprise registration
information portal and e-portal of the people’s court and sent to creditors that
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have sent debt claims within 10 working days after they are posted up.
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3. Within 5 working days after the time limit for posting up the list of
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creditors expires, creditors and the insolvent enterprise or cooperative may
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request the judge to review the list of creditors. In case of a force majeure
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circumstance or an objective obstacle, the period during which the force
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majeure circumstance or objective obstacle exists shall not be counted into
the time limit prescribed in this Clause.
4. Within 3 working days after receiving a review request, the judge
shall consider and settle the request. If finding the request grounded, he/she
shall modify or supplement the list of creditors.
Article 68. Making of lists of debtors
1. An asset management officer or asset management and liquidation
firm shall make a list of debtors of the insolvent enterprise or cooperative. A
list of debtors must clearly state names, address, nationalities and personal
identities of debtors or their lawful representatives, debts of each each debtor,
including secured and unsecured debts, due and undue debts.
2. Within 45 days after a decision to initiate bankruptcy procedures is
issued, the list of debtors shall be publicly posted up at the office of the
people’s court carrying out bankruptcy procedures and the head office of the
enterprise or cooperative and sent to the debtors within 10 working days after
it is posted up.

3. Within 5 working days after the time limit for posting up the list
expires, the debtors and the insolvent enterprise or cooperative may request
the judge to review the list of debtors.
4. Within 3 working days after receiving a review request, the judge
shall consider and settle the request. If finding the request grounded, he/she
shall modify or supplement the list.
Article 69. Registration of secured transactions of insolvent enterprises
and cooperatives
An insolvent enterprise or cooperative that lends to others assets which
are subject to registration of secured transactions as prescribed by law but has
not yet registered such assets shall promptly conduct the registration. In case
the insolvent enterprise or cooperative fails to register secured transactions,
the asset management officer or asset management and liquidation firm shall
do so.
Article 70. Application of provisional urgent measures
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1. In the course of settlement of petitions for initiation of bankruptcy
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procedures, persons with the right and obligation to file petitions specified in
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Article 5 of this Law, asset management officers and asset management and
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liquidation firms may request a people’s court with jurisdiction to carry out
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bankruptcy procedures to issue decisions on application of one or several
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provisional urgent measures to preserve assets of insolvent enterprises or
cooperatives and ensure the lawful rights and interests of employees, as
follows:
a/ Permitting the sale of perishable goods, goods with a close expiry
date and goods hard to be sold beyond a certain point of time; permitting the
harvest and sale of cash crops or other products and goods;
b/ Distraining and sealing up assets of the enterprise or cooperative;
c/ Freezing bank accounts of the enterprise or cooperative; blockading
assets at places where they consigned for safe keeping;
d/ Sealing up warehouses and funds, seizing and managing accounting
books and relevant documents of the enterprise or cooperative;
dd/ Prohibiting the transfer of property rights to assets of the insolvent
e/ Prohibiting the alteration of the status of assets of the insolvent
g/ Prohibiting the enterprise or cooperative and other related individuals
and organizations from taking certain acts or forcing them to take cetain acts;

h/ Compelling advance payment of salaries, wages, compensations or
allowances for labor accidents or occupational diseases by the employer to
employees;
i/ Other provisional urgent measures prescribed by law.
2. Persons requesting application of a provisional urgent measure shall
send written requests to people’s courts with jurisdiction to apply such
measures. A written request for application of a provisional urgent measure
must have the following principal contents:
a/ Date of making;
b/ Name and address of the requester;
c/ Name and address of the person against whom the provisional urgent
measure is requested to be applied;
d/ Reason for the application of the provisonal urgent measure;
dd/ Provisonal urgent measure that needs to be applied and specific
requirements.
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Depending on requirements on application of a provisional urgent
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measure, the requester shall provide the people’s court with evidences to
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prove the necessity to apply such measure.
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3. Procedures for application, change or cancellation of provisional
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urgent measures, settlement of requests for review of the application, change
or cancellation of provisional urgent measures and enforcement of decisions
on application, change or cancellation of provisional urgent measures must
comply with this Law, the law on civil procedures and civil judgment
enforcement.
4. The Supreme People’s Court shall guide this Article.
Article 71. Handling of suspension of the enforcement of civil
judgments or settlement of cases
1. In case people’s courts issue decisions not to initiate bankruptcy
procedures, people’s courts, arbitrations or civil judgment enforcement
agencies that have issued suspension decisions under Article 41 of this Law
shall issue decisions to cancel suspension decisions.
2. In case people’s courts issue decisions to initiate bankruptcy
procedures, people’s courts, arbitrations or civil judgment enforcement
agencies that have issued suspension decisions under Article 41 of this Law
shall issue decisions to terminate bankruptcy procedures and forward case
files to people’s courts carrying out bankruptcy procedures for settlement.

3. In case people’s courts issue decisions to terminate the performance
of bankruptcy procedures under Clause 1, Article 86 of this Law and
terminate the procedures for resumption of business operation under Point a,
Clause 1, Article 95 of this Law, people’s courts, arbitrations or civil
judgment enforcement agencies shall issue decisions to cancel termination
decisions mentioned in Clause 2 of this Article and settle cases in accordance
with law.
Article 72. Handling of termination of the enforcement of civil
judgments and settlement of cases
1. In case of termination of the judgment enforcement under Clause 2,
Article 71 of this Law, people’s courts carrying out bankruptcy procedures
shall handle on a case-by-case basis as follows:
a/ In case judgments or decisions of people’s courts have taken legal
effect and there are no decisions on distraint of assets of enterprises or
cooperatives to secure the judgment enforcement, judgment creditors may get
paid as unsecured creditors;
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b/ In case judgments or decisions of people’s courts have taken legal
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effect and there are decisions on distraint of assets of enterprises or
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cooperatives to secure the judgment enforcement, judgment creditors may get
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paid as secured creditors.
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2. In case of termination of the settlement of cases under Clause 2,
Article 71 of this Law, upon receiving case files forwarded by people’s courts
that have issued decisions to terminate the settlement of cases, people’s
courts carrying out bankruptcy procedures shall consider and decide on
property obligations which insolvent enterprises or cooperatives shall
perform or property obligations which other involved parties shall perform
toward these enterprises or cooperatives as follows:
a/ In case the insolvent enterprises or cooperatives shall perform the
property obligation, persons toward whom the property obligation is
performed have the right to request to be paid as creditors with assets of these
enterprises or cooperatives;
b/ In case involved parties shall perform the property obligation toward
insolvent enterprises or cooperatives, they shall pay to these enterprises or
cooperatives amounts of value equivalent to such property obligation.
Article 73. Obligations of banks at which enterprises and cooperatives
open their accounts
From the date when a people’s court issues a decision to declare an
enterprise or a cooperative bankrupt, the bank at which the enterprise or
cooperative opens its account shall be prohibited from settling debts of the

enterprise or cooperative, except when it obtains written consent of the
people’s courts or civil judgment enforcement agency.
Article 74. Obligations of employees
From the date when a people’s court decides to initiate bankruptcy
procedures, employees have the obligation to protect assets of their enterprise
or cooperative and may neither hide nor disperse assets of their enterprise or
cooperative.
Chapter VI
CREDITORS’ MEETINGS
Article 75. Convening of creditors’ meetings and sending of convening
notices
1. Except cases in which a creditors’ meeting is not required to be held
under Article 105 of this Law, a judge shall convene a creditors’ meeting
within 20 days after the date of completing the asset inventory, if the asset
inventory is completed after a list of creditors is made, or after the date of
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completing the making of a list of creditors, if the asset inventory is
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completed before a list of creditors is made.
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2. A notice of convening a creditors’ meeting and other relevant
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documents shall be sent no later than 15 days before the opening date of the
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meeting to every person having the right or obligation to attend the meeting
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prescribed in Article 77 or 78 of this Law. The notice of convening a
creditors’ meeting must specify the time, venue, agenda and contents of the
meeting.
3. Notices of convening creditors’ meetings and enclosed documents
may be handed directly, delivered or sent by registered or non-registered
mail, fax, telex or email or by other methods provided that the sending is
recorded.
Article 76. Principles of conducting creditors’ meetings
1. Respect for agreements among bankruptcy procedure participants if
such agreements neither violate legal prohibitions nor go contrary to social
ethics.
2. Equal rights and obligations of bankruptcy procedure participants.
3. Publicity in conducting creditors’ meetings.
Article 77. Right to attend creditors’ meetings
The following persons have the right to attend creditors’ meetings:

1. Creditors named on the list of creditors. Creditors may authorize in
writing other persons to attend the creditors’ meeting and the authorized
persons have the rights and obligations like creditors;
2. Employees’ representatives and trade union representatives who are
authorized by employees. In this case, employees’ representatives and trade
union representatives have the rights and obligations like creditors;
3. Guarantors who have already paid debts for insolvent enterprises or
cooperatives. In this case, guarantors become unsecured creditors.
Article 78. Obligation to attend creditors’ meetings
1. Those who have filed petitions for initiation of bankruptcy procedures
prescribed in Article 5 of this Law or lawful representatives of insolvent
enterprises or cooperatives have the obligation to attend creditors’ meetings;
in case such persons are unable to attend creditors’ meetings, they shall
authorize in writing other persons to attend the meetings. In this case,
authorized persons have the rights and obligations like authorizing persons.
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2. In case representatives of insolvent enterprises or cooperatives are
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deliberately absent from creditors’ meetings without plausible reasons, asset
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management officers and asset management and liquidation firms may file
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written requests with a people’s court to handle them in accordance with law.
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Article 79. Validity conditions of a creditors’ meeting
1. Being attended by creditors who represent at least 51% of unsecured
debts.
Creditors who do not attend the creditors’ meeting but have sent to the
judge their written opinions on the contents prescribed in Clause 1, Article 83
of this Law before the date the meeting is held shall be regarded as attending
the meeting.
2. Being attended by the asset management officer and asset
management and liquidation firm that are assigned to settle the petition for
initiation of bankruptcy procedures.
Article 80. Postponement of creditors’ meetings
1. A creditors’ meeting shall be postponed if the conditions prescribed in
Article 79 of this Law are not fully met; in case a creditors’ meeting is
postponed, the judge shall make a minutes and record opinions of the meeting
attendants. The judge shall notify the postponement of the creditors’ meeting to
bankruptcy procedure participants right on the day the meeting is postponed.
2. The judge shall reconvene a creditors’ meeting within 30 days after
the meeting is postponed.

3. If a creditors’ meeting which is reconvened under Clause 2 of this
Article still fails to fully meet the conditions prescribed in Article 79 of this
Law, the judge shall make a minutes and decide to declare bankruptcy.
Article 81. Agenda and proceedings of creditors’ meetings
1. A creditors’ meeting shall be conducted as follows:
a/ The judge assigned to take charge of the case opens the creditors’
meeting;
b/ The creditors’ meeting votes to approve the appointment of the
meeting secretary at the proposal of the asset management officer or asset
management and liquidation firm. The secretary shall make the meeting
minutes;
c/ The asset management officer or asset management and liquidation
firm reports on the presence and absence of persons invited to the creditors’
meeting according to the convening notice issued by the people’s court and
reasons for their absence and then checks the personal identity papers of the
meeting attendants;
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d/ The judge informs the creditors’ meeting of the meeting attendants
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and contents of settlement of the petition for initiation of bankruptcy
procedures;
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dd/ The asset management officer or asset management and liquidation
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firm informs the creditors’ meeting of the business situation and actual
financial state of the insolvent enterprise or cooperative; asset inventory
results, the list of creditors, the list of debtors and other information if
considering it necessary;
e/ The owner or lawful representative of the enterprise or cooperative
presents his/her opinions about the contents reported to the meeting by the
asset management officer or asset management and liquidation firm and
proposes plans and solutions to reorganize its business operation, and debt
repayment ability and deadlines;
g/ Creditors or their lawful representatives present specific issues for
settlement, and reasons for, purposes and grounds of their bankruptcy
settlement petition;
h/ Related persons or their lawful representatives present their opinions
on issues related to their lawful rights and interests in the settlement of the
petition for initiation of bankruptcy procedures;
i/ Witnesses present their opinions; assessors and representatives of
price appraisal agencies present assessment or valuation results; persons

implementing other judicial assistance measures explain unclear or
contradictory issues;
k/ The asset management officer or asset management and liquidation
firm publicizes written opinions, documents and evidences provided by those
who are absent from the meeting, if any;
l/ The creditors’ meeting discusses contents presented by the asset
management officer or asset management and liquidation firm and opinions
of the meeting attendants;
m/ The asset management officer or asset management and liquidation
firm and meeting attendants may request the judge to issue a decision to
replace the lawful representative of the insolvent enterprise or cooperative;
n/ Creditors have the right to form a creditor representative board.
2. A resolution of the creditors’ meeting shall be approved when it is
voted for by more than half of attending unsecured creditors who represent at
least 65% of total unsecured debts. Resolutions of creditors’ meetings are
binding on all creditors.
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Article 82. Creditor representative boards
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1. A creditor representative board shall be composed of between 3 and 5
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members who are elected by creditors at a creditors’ meeting, including a
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chairperson, a vice chairperson and member(s).
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2. Creditor representative boards shall, on behalf of creditors, supervise
the implementation of resolutions of creditors’ meetings and request asset
management officers or asset management and liquidation firms to implement
resolutions of creditors’ meetings. If asset management officers or asset
management and liquidation firms fail to implement their requests, creditor
representative boards may report such in writing to the judges in charge of
settling the bankruptcy cases.
Article 83. Resolutions of creditors’ meetings
1. A creditors’ meeting may issue a resolution containing one of the
following conclusions:
a/ Requesting termination of the settlement of the petition for initiation
of bankruptcy procedures, if the enterprise or cooperative concerned falls into
the case prescribed in Clause 1, Article 86 of this Law;
b/ Requesting application of measures to restore the business operation
of the enterprise or cooperative concerned;
c/ Requesting declaration of bankruptcy of the enterprise or cooperative
concerned.

2. A resolution of a creditors’ meeting must have the following principal
details:
b/ Name of the asset management officer or asset management and
liquidation firm;
c/ Name and address of the filer of the petition for initiation of
d/ Name and address of the enterprise or cooperative against which a
petition for initiation of bankruptcy procedures is filed;
dd/ Names and addresses of related persons;
e/ Opinions of attendants to the creditors’ meeting;
g/ Opinions of the asset management officer or asset management and
liquidation firm about requests of attendants to the creditors’ meeting;
h/ Conclusions made at the creditors’ meeting and voting results.
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3. A resolution of a creditors’ meeting must contain signatures of the
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judge, asset management officer or representative of the asset management
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and liquidation firm and be announced at the meeting.
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4. In case a creditors’ meeting fails to issue a resolution under Clause 2,
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Article 81 of this Law, the people’s court shall declare the enterprise or
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cooperative concerned bankrupt.
Article 84. Sending of resolutions of creditors’ meetings
Within 3 working days after a creditors’ meeting concludes, the people’s
court shall send the resolution of the meeting to the same-level people’s
procuracy and persons who have the right and obligation to attend to the
meeting prescribed in Articles 77 and Article 78 of this Law.
Article 85. Requests and recommendations for review of resolutions of
creditors’ meetings and settlement of these requests and recommendations
1. If disagreeing with a resolution of a creditors’ meeting, within 5
working days after receiving such resolution, a person having the right or
obligation to attend the creditors’ meeting prescribed in Article 77 or 78 of
this Law may file a written request, or the people’s procuracy of the same
level with the people’s court settling the bankruptcy case may make a written
recommendation, for review of the resolution to the chief justice of such
court.
2. A written request or recommendation must have the following
principal details:

a/ Date of making;
b/ Name and address of the requester or the procuracy making the
recommendation;
c/ Contents of the request or recommendation.
3. Within 10 working days after receiving the written request or
recommendation, the chief justice of the court settling the bankruptcy case
shall consider and issue either of the following decisions:
a/ To reject the request or recommendation;
b/ To re-organize the creditors’ meeting.
4. Within 3 working days after the date of its issuance, the request or
recommendation settlement decision shall be sent to the same-level people’s
procuracy and persons having the right or obligation to attend the creditors’
meeting prescribed in Articles 77 and 78 of this Law.
5. The settlement decision prescribed in Clause 3 of this Article is the
final one.
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Article 86. Termination of bankruptcy procedures
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1. During the period from the date when a people’s court issues a
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decision on initiation of bankruptcy procedures to the date when it issues a
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decision declaring the enterprise or cooperative bankrupt, if the enterprise or
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cooperative does not become insolvent, the people’s court shall issue a
decision to terminate bankruptcy procedures.
The enterprise or cooperative shall refund the advanced amount to pay
bankruptcy expenses to the filers of the petitions for initiation of bankruptcy
procedures, except the case when such filers violate Clause 4, Article 19 of
this Law.
2. Within 3 working days after it is issued, a decision on termination of
bankruptcy procedures shall be sent to persons who have been notified of the
decision on initiation of bankruptcy procedures prescribed in Clause 1,
Article 43 of this Law.
Within 15 days after receiving the decision on termination of bankruptcy
procedures, a bankruptcy procedure participant may file a request for review
of, or the people’s procuracy of the same level with the people’s court
settling the bankruptcy case may make a recommendation about, the decision
to the chief justice of such court.
3. Within 3 working days after receiving the request or recommendation
prescribed in Clause 2 of this Article, the chief justice of the people’s court

settling the bankruptcy case shall consider and settle it and make either of the
following decisions:
a/ To uphold the decision on termination of bankruptcy procedures;
b/ To cancel the decision on termination of bankruptcy procedures and
assign a judge to settle the bankruptcy case.
4. Within 3 days after it is issued, a decision on settlement of a request
or recommendation for review of a decision on termination of bankruptcy
procedures shall be sent to persons who have been notified of the decision on
initiation of bankruptcy procedures prescribed in Clause 1, Article 43 of this
Law.
Chapter VII
PROCEDURES FOR BUSINESS OPERATION RESTORATION
Article 87. Making of business operation restoration plans
1. Within 30 days after the creditors’ meeting approves a resolution on
application of measures to restore business operation, the insolvent enterprise
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or cooperative shall make a business operation restoration plan and send it to
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the judge, creditors, the asset management officer or asset management and
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liquidation firm for opinion.
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2. Within 10 working days after receiving the enterprise’s or
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cooperative’s business operation restoration plan, creditors, the asset
management officer or asset management and liquidation firm shall send their
opinions to the enterprise or cooperative for finalizing the plan and reporting
to the asset management officer or asset management and liquidation firm,
creditors and the creditor representative board (if any).
3. Upon receiving the business operation restoration plan prescribed in
Clause 2 of this Article, the asset management officer or asset management
and liquidation firm shall report it to the judge.
4. Within 15 days after receiving the business operation restoration plan
from the asset management officer or asset management and liquidation firm,
the judge shall consider the plan before submitting it to the creditors’ meeting
for consideration and approval.
Article 88. Contents of business operation restoration plans
1. A business operation restoration plan for an insolvent enterprise or
cooperative must specify measures for restoring its business operation; and
debt repayment conditions, time limits and plans.
2. Measures for restoring business operation include:
a/ Raising capital;

b/ Reducing, writing off or rescheduling debts;
c/ Changing production and business lines;
d/ Renewing production technologies;
dd/ Reorganizing the managerial apparatus; consolidating or splitting up
production sections;
e/ Selling shares to creditors or others;
g/ Selling or leasing assets;
h/ Other lawful measures.
Article 89. Time limits for implementation of business operation
restoration plans
1. The time limit for implementing a plan on restoration of business
operation of an insolvent enterprise or cooperative must comply with the
creditors’ meeting’s resolution approving such plan.
2. In case a creditors’ meeting does not set a time limit for implementing
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the business operation restoration plan of the insolvent enterprise or
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approved by the creditors’ meeting.
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cooperative, the plan shall be implemented within 3 years after the date it is
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Article 90. Validity conditions of a creditors’ meeting approving an
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enterprise’s or a cooperative’s business operation restoration plan
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1. Being attended by creditors representing at least 51% of unsecured
debts.
Creditors who do not attend the creditors’ meeting but have sent their
written opinions on the approval or disapproval of the enterprise’s or
cooperative’s business operation restoration plan to the judge before the date
the creditors’ meeting is held shall be considered as attending the meeting.
2. Being attended by the asset management officer or asset management
and liquidation firm assigned to settle the petition for initiation of bankruptcy
procedures.
Article 91. Agenda and proceedings of a creditors’ meeting approving a
business operation restoration plan
1. Within 10 working days after deciding to submit the plan on
restoration of business operation of the insolvent enterprise or cooperative to
the creditors’ meeting, the judge shall convene a creditors’ meeting to
consider and approve such plan.
2. The creditors’ meeting shall be conducted as follows:
a/ The judge assigned to take charge of the case opens the meeting;

b/ The meeting votes to approve the appointment of a meeting secretary
at the proposal of the asset management officer or asset management and
liquidation firm. The secretary shall make the meeting minutes;
c/ The asset management officer or asset management and liquidation
firm reports on the presence and absence of persons invited to attend the
creditors’ meeting according to the convening notice issued by the people’s
court, reasons for their absence and check personal identity papers of the
meeting attendants;
d/ The judge informs the creditors’ meeting of the meeting attendants;
dd/ The enterprise’s or cooperative’s representative presents the
business operation restoration plan;
e/ Attendants to the creditors’ meeting present their opinions on the
business operation restoration plan;
g/ The creditors’ meeting discusses and votes to approve the business
operation restoration plan.
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4. The creditors’ meeting may be postponed once if its validity conditions
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with Articles 90 and 91 of this Law. nam
are not fully met. The re-organization of the creditors’ meeting must comply
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5. The resolution of the creditors’ meeting approving the business
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operation restoration plan shall be approved if it is voted for by more than
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half of the attending unsecured creditors who represent at least 65% of total
unsecured debts.
In case the business operation restoration plan involves the use of
security assets, it must specify the period of using such security assets and
plans on their handling and be agreed by the creditors that hold such assets.
6. The resolution of the creditors’ meeting is binding on all creditors.
7. In case of failure to re-organize a creditors’ meeting or the creditors’
meeting fails to approve a resolution under Clause 5 of this Article, the
people’s court shall declare the enterprise or cooperative bankrupt.
Article 92. Recognition of a resolution of a creditors’ meeting
approving an enterprise’s or a cooperative’s business operation restoration
plan
1. The judge shall issue a decision to recognize the resolution of the
creditors’ meeting approving the business operation restoration plan of the
insolvent enterprise or cooperative. The resolution is binding on all
bankruptcy procedure participants.

From the effective date of the resolution, the enterprise or cooperative is
no longer subjected to the prohibitions and placed under supervision in
business operation as prescribed in Articles 48 and 49 of this Law.
2. Within 7 working days after it is issued, the people’s court shall send
the decision recognizing the resolution of the creditors’ meeting approving
the business operation restoration plan to the insolvent enterprise or
cooperative, creditors and the same-level people’s procuracy.
Article 93. Supervision of implementation of a business operation
restoration plan
1. After the judge issues a decision to recognize the resolution of the
creditors’ meeting approving the business operation restoration plan of an
insolvent enterprise or cooperative, the asset management officer or asset
management and liquidation firm and creditors shall supervise the business
operation of the enterprise or cooperative.
2. Once every 6 months, the enterprise or cooperative shall report on the
implementation of its business operation restoration plan to the asset
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management officer or asset management and liquidation firm for reporting
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to the judge and notification to creditors.
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Article 94. Modification and supplementation of a business operation
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restoration plan
1. In the course of implementing a business operation restoration plan,
creditors and the enterprise or cooperative concerned may reach agreement
on modification or supplementation of such plan.
2. The agreement on modification or supplementation of the enterprise’s
or cooperative’s business operation restoration plan shall be approved when
it is voted for by more than half of the attending unsecured creditors who
represent at least 65% of total unsecured debts.
3. The asset management officer or asset management and liquidation
firm shall send to the judge a written request for issuance of a decision
recognizing the agreement on modification or supplementation of the
enterprise’s or cooperative’s business operation restoration plan.
Within 7 working days after it is issued, the decision recognizing the
agreement on modification or supplementation of the enterprise’s or
cooperative’s business operation restoration plan shall be sent to the
enterprise or cooperative and its creditors.
Article 95. Termination of business operation restoration procedures

1. A judge shall issue a decision to terminate the procedures for
restoration of the business operation of an insolvent enterprise or cooperative
in one of the following cases:
a/ The enterprise or cooperative has fulfilled the business operation
restoration plan;
b/ The enterprise or cooperative cannot implement the business
operation restoration plan;
c/ Past the time limit for implementing the business operation restoration
plan, the enterprise or cooperative remains insolvent.
2. The people’s court shall make public the decision on termination of
procedures for restoration of the business operation of the enterprise or
cooperative prescribed in Clause 1, Article 43 of this Law.
Article 96. Legal consequences of the termination of business operation
restoration procedures
1. In the case prescribed at Point a, Clause 1, Article 95 of this Law, the
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enterprise or cooperative shall be regarded as no longer falling into
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insolvency. The judge in charge of settling the petition for initiation of
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bankruptcy procedures shall issue a notice of cessation of rights and
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obligations of the asset management officer or asset management and
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liquidation firm.
2. In the cases prescribed at Points b and c, Clause 1, Article 95 of this
Law, the judge shall issue a decision declaring the enterprise or cooperative
bankrupt.
Chapter VIII
BANKRUPTCY PROCEDURES APPLICABLE TO CREDIT
INSTITUTIONS
Article 97. Application of provisions on bankruptcy procedures to credit
institutions
Bankruptcy procedures applicable to credit institutions are prescribed in
this Chapter. For matters not yet prescribed in this Chapter, relevant
provisions of this Law, except those of Chapters VI and VII, shall apply.
Article 98. Right and obligation to file petitions for initiation of
After the State Bank of Vietnam issues a document on removal of
special control or termination of application or non-application of solvency
restoration measures, if the credit institution concerned remains insolvent, the

following persons have the right and obligation to file a petition for initiation
of bankruptcy procedures:
1. The persons prescribed in Clauses 1, 2, 5 and 6, Article 5 of this Law;
2. The credit institution that has the obligation to file a petition for
initiation of bankruptcy procedures; in case the credit institution fails to do
so, the State Bank of Vietnam shall file a petition for initiation of bankruptcy
procedures against the credit institution.
Article 99. Acceptance of petitions for initiation of bankruptcy
procedures against credit institutions
A people’s court shall accept the petition for initiation of bankruptcy
procedures against a credit institution in case the State Bank of Vietnam has
issued a document on removal of special control or termination of
application or non-application of solvency restoration measures but the credit
institution remains insolvent.
Article 100. Refund of special loans
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Credit institutions receiving special loans from the State Bank of
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Vietnam or other credit institutions under the Law on Credit Institutions,
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which are declared bankrupt, shall refund such special loans to the State
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Bank of Vietnam or other credit institutions before dividing their assets under
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Article 101 of this Law.
Article 101. Order of division of assets
1. The asset value of a credit institution shall be divided in the following
order:
a/ Bankruptcy expenses;
b/ Wages, severance pays, social insurance premiums and health
insurance premiums for employees, other benefits according to labor
contracts and collective labor agreements already signed;
c/ Deposits and monetary amounts payable by deposit insurance
institutions to those who deposit money at the bankrupt credit institution in
accordance with the law on deposit insurance and the guidance of the State
Bank of Vietnam;
d/ Financial obligations toward the State Bank of Vietnam; unsecured
debts payable to creditors on the list of creditors; secured debts not yet paid
as the value of their security assets are insufficient for debt payment.
2. The remainder of the credit institution’s asset value after all the debts
prescribed in Clause 1 of this Article are paid, if any, 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 contributors of the credit institution being a limited liability
company with two or more members; shareholders of the credit institution
being a joint-stock company.
3. In case the asset value is insufficient to pay the debts prescribed in
Clause 1 of this Article, the entities of the same priority rank shall receive
payments in proportion to the debts owed to them .
Article 102. Return of entrusted assets and custodial assets when credit
institutions are declared bankrupt and conduct asset liquidation
Within 10 working days after receiving a decision declaring a credit
institution bankrupt, owners of assets entrusted to, kept in custody at, or
assigned for management to, the credit institution under asset entrustment,
custody or management contracts, shall produce papers proving their
ownership over such assets and related records and documents to civil
judgment enforcement agencies in order to take their assets back.
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Article 103. Transactions of credit institutions under special control
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Transactions conducted by a credit institution during the period it is
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placed under special control or subjected to solvency restoration measures
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under the control by the State Bank of Vietnam are not governed by the
provisions on invalid transactions in Article 59 of this Law.
Article 104. Decisions declaring credit institutions bankrupt
Within 30 days after an asset management officer or asset management
and liquidation firm makes the list of creditors, list of debtors and asset
inventory of the credit institution concerned, the people’s court shall issue a
decision declaring such credit institution bankrupt.
The Supreme People’s Court shall guide the implementation of this
Article.
Chapter IX
DECLARATION OF BANKRUPTCY OF ENTERPRISES AND
COOPERATIVES
Article 105. Declaration of bankruptcy of enterprises and cooperatives
according to summary procedures
1. People’s courts shall settle bankruptcy cases according to summary
procedures in the following cases:
a/ Petitions for initiation of bankruptcy procedures are filed under
Clauses 3 and 4, Article 5 of this Law but the insolvent enterprise or

cooperative has no money or other assets to pay the bankruptcy fee and
advance money to pay bankruptcy expenses;
b/ Petitions for initiation of bankruptcy procedures have been accepted
but the insolvent enterprise or cooperative has no assets to pay bankruptcy
expenses.
2. When considering that an enterprise or a cooperative falls into a case
prescribed in Clause 1 of this Article, a people’s court shall notify bankruptcy
procedure participants that it shall settle the case according to summary
procedures.
3. Within 30 days after issuing a notice as prescribed in Clause 2 of this
Article, the people’s court shall consider and declare the enterprise or
cooperative bankrupt, for the cases prescribed in Clause 1 of this Article, or
continue settle the case according to general procedures and notify such to
bankruptcy procedure participants.
4. In case a people’s court issues a decision declaring the enterprise or
cooperative bankrupt under Point b, Clause 1 of this Article, the filer of the
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petition for initiation of bankruptcy procedures shall not be refunded the
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bankruptcy fee and advanced payments for bankruptcy expenses.
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Article 106. Bankruptcy declaration decisions upon failure of creditors’
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In the cases prescribed in Clause 3, Article 80, Clause 4, Article 83 and
Clause 7, Article 91 of this Law, within 15 days after receiving a report on
results of the creditors’ meeting, the people’s court shall issue a decision
declaring the enterprise or cooperative concerned bankrupt.
Article 107. Decisions declaring enterprises or cooperatives bankrupt
after creditors’ meetings issue resolutions
1. Within 15 days after receiving a resolution of the creditors’ meeting
requesting declaration of bankruptcy prescribed at Point c, Clause 1, Article
83 of this Law, the people’s court shall issue a decision declaring the
enterprise or cooperative concerned bankrupt.
2. In the following cases, the people’s court shall issue a decision
declaring the enterprise or cooperative concerned bankrupt even after the
creditors’ meeting approves a resolution on application of business operation
restoration procedures:
a/ The enterprise or cooperative fails to make a business operation
restoration plan within the time limit prescribed in Clause 1, Article 87 of this
Law;

b/ The creditors’ meeting does not approve the business operation
restoration plan of the enterprise or cooperative;
c/ The enterprise or cooperative fails to implement the business
operation restoration plan.
Article 108. Decisions declaring enterprises and cooperatives bankrupt
1. A decision declaring an enterprise or a cooperative bankrupt must
contain the following principal details:
b/ Name of the people’s court and full name of the judge conducting
c/ Name and address of the enterprise or cooperative declared bankrupt;
d/ Grounds for bankruptcy declaration;
dd/ Termination of the operation of the bankrupt enterprise or
cooperative; suspension of transactions related to the enterprise or cooperative;
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termination of the obligation to pay interests to the enterprise or cooperative;
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settlement of consequences arising from suspended transactions; declaration of
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invalid transactions and settlement of consequences arising from invalid
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transactions; termination of labor contracts signed with employees and
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settlement of benefits for employees;
e/ Cessation of powers of the enterprise’s or cooperative’s
representative;
g/ Liquidation of assets and auction of remaining assets of the enterprise
or cooperative;
h/ Plan on division of the asset value before and after the enterprise or
cooperative is declared bankrupt according to the order of asset division
prescribed in Article 54 of this Law;
i/ Forwarding of requests for settlement of disputes to a competent
people’s court;
k/ Ban on holding of certain posts after the enterprise or cooperative is
declared bankrupt as prescribed in Article 130 of this Law;
l/ Settlement of other matters in accordance with law.
2. A decision declaring an enterprise or a cooperative bankrupt takes
Article 109. Sending and notification of decisions declaring enterprises
or cooperatives bankrupt

1. Within 10 working days after issuing a decision declaring an
enterprise or a cooperative bankrupt, a people’s court shall make notification
according to Clause 1, Article 43 of this Law. If the bankruptcy declaration
decision also bans some persons from holding certain managerial posts,
establishing, or acting as managers of, enterprises and cooperatives, the court
shall also send a copy of the decision to the provincial-level Justice
Department of the locality where it is headquartered.
2. Within 10 days after issuing a decision declaring an enterprise or a
cooperative bankrupt, a people’s court shall send such decision to the
business registration agency for de-registration of the enterprise or
cooperative from the business register; in case the Supreme People’s Court
issues a decision on settlement of a request for review of, or a
recommendation about, the bankruptcy declaration decision as prescribed in
Article 113 of this Law, this time limit may be prolonged but must not exceed
15 days after the date the Chief Justice of the Supreme People’s Court issues
the decision.
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Article 110. Property obligations after the issuance of decisions
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declaring enterprises and cooperatives bankrupt
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1. Decisions declaring enterprises and cooperatives bankrupt prescribed
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in Article 105, 106 or 107 of this Law do not exempt owners of private
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enterprises or partners of partnerships from property obligations towards
creditors whose debts have not yet been paid, unless otherwise agreed by
bankruptcy procedure participants or prescribed by law.
2. Property obligations that arise after the issuance of decisions
declaring enterprises or cooperatives bankrupt shall be settled in accordance
with the law on civil judgment enforcement and other relevant laws.
Article 111. Requests for review, and protests against, decisions
declaring enterprises or cooperatives bankrupt
1. The persons who are notified of the decision declaring an enterprise
or a cooperative bankrupt under Clause 1, Article 109 of this Law have the
right to file a request for review of, and the people’s procuracy of the same
level with the people’s court which has issued such decision may make a
protest against, such decision.
2. The time limit for filing a request for review of, or making a protest
against, a decision declaring an enterprise or a cooperative bankrupt is 15
days after receiving, or being properly notified of, the decision.
Within 3 working days after receiving a request for review of, or a
protest against, its decision declaring an enterprise or a cooperative bankrupt,
the people’s court shall send the dossier of the bankruptcy case, enclosed

with the request or protest, to its immediate higher-level people’s court for
consideration and settlement.
Article 112. Settlement of requests for review, and protests against,
decisions declaring enterprises and cooperatives bankrupt
1. Upon receiving a bankruptcy case dossier enclosed with a request for
review of, or a protest against, a decision declaring an enterprise or a
cooperative bankrupt, the immediate higher-level people’s court of the court
which has issued such decision shall appoint a team consisting of 3 judges to
consider and settle such request or protest and send the bankruptcy case
dossier to the same-level people’s procuracy.
2. Within 5 working days after receiving the bankruptcy case dossier
from the people’s court, the people’s procuracy shall return the dossier to the
people’s court.
3. Within 20 days after receiving the bankruptcy case dossier enclosed
with the request or protest, the judge team shall hold a working session and
make one of the following decisions:
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a/ To reject the request or protest and uphold the decision declaring the
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enterprise or cooperative bankrupt;
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b/ To modify the decision declaring the enterprise or cooperative
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bankrupt;
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c/ To cancel the decision declaring the enterprise or cooperative
bankrupt and return the dossier to the lower-level people’s court for re-
settlement.
4. The working session of the judge team shall be attended by a
representative of the people’s procuracy and recorded in a minutes by a clerk
of the people’s court. When necessary, the people’s court may summon the
requester and other related persons to the working session to present their
opinions.
5. The request or protest settlement decision of the higher-level people’s
court takes legal effect on the date of its issuance.
Article 113. Consideration of written requests and recommendations
according to special procedures
1. Within 15 days after the immediate higher-level people’s court issues a
request or recommendation settlement decision under Article 112 of this Law,
in case a bankruptcy procedure participant files a request for review of, or the
Supreme People’s Procuracy or the people’s court concerned makes a
recommendation about, such decision, the Chief Justice of the Supreme

People’s Court shall re-consider such decision if obtaining any of the following
grounds:
a/ There is a serious violation of the bankruptcy law;
b/ There arises a new circumstance which may fundamentally change the
contents of the bankruptcy declaration decision and was unknown to the
people’s court and bankruptcy procedure participants at the time the people’s
court issued such decision.
2. If obtaining a ground prescribed in Clause 1 of this Article, the
Supreme People’s Court shall request the people’s court which has issued the
request or recommendation settlement decision under Article 112 of this Law
to transfer the bankruptcy case dossier to the Supreme People’s Court for
consideration and settlement.
3. Within 30 days after receiving the request or recommendation, the
Chief Justice of the Supreme People’s Court may make either of the
following decisions:
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a/ To reject the request or recommendation and uphold the decision of
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the lower-level people’s court;
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b/ To cancel the decision declaring the enterprise or cooperative
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bankrupt issued by the lower-level people’s court and the request or
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recommendation settlement decision issued by the immediate higher-level
people’s court and return the bankruptcy case dossier to the lower-level
people’s court for re-settlement.
4. The request or recommendation settlement decision issued by the
Chief Justice of the Supreme People’s Court is the final one and takes legal
Chapter X
HANDLING OF DISPUTED ASSETS OF ENTERPRISES AND
COOPERATIVES
Article 114. Handling of asset-related disputes that arise before the
issuance of decisions declaring enterprises or cooperatives bankrupt
1. In the course of settling bankruptcy for an enterprise or a cooperative,
if an asset-related dispute arises before the issuance of a decision declaring
the enterprise or cooperative bankrupt, the people’s court settling the
bankruptcy case shall consider separating the disputed assets for settlement in
another case in accordance with the law on civil procedures.
2. After obtaining an effective judgment or decision on settlement of the
asset-related dispute prescribed in Clause 1 of this Article, the people’s court
settling the bankruptcy case shall handle such assets as follows:

a/ If the bankruptcy declaration decision is not issued yet, assets
obtained under the effective court judgment or decision shall be added up to
the enterprise’s or cooperative’s assets;
b/ If the bankruptcy declaration decision has been issued, assets
obtained under the effective court judgment or decision shall be divided
according to this bankruptcy declaration decision.
3. The notification of the separation of disputed assets for settlement in
another case prescribed in Clause 1 of this Article must comply with Clause
1, Article 43 of this Law.
4. After an enterprise or a cooperative is declared bankrupt, the asset
management officer or asset management and liquidation firm shall represent
the enterprise and cooperative in the settlement of asset-related disputes.
Article 115. Settlement of cases in which asset-related disputes arise in
the course of enforcing decisions declaring enterprises or cooperatives
bankrupt
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1. In case an asset-related dispute arises in the course of liquidating assets
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according to a decision declaring an enterprise or a cooperative bankrupt or in
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case of impossibility to enforce a decision declaring an enterprise or a
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cooperative bankrupt, the judgment enforcer, asset management officer, asset
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management and liquidation firm and bankruptcy procedure participants shall
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request the people’s court which has settled the bankruptcy case to consider the
dispute.
2. Within 10 working days after receiving a request from the judgment
enforcer, asset management officer, asset management and liquidation firm
and bankruptcy procedure participants, the people’s court shall issue either of
the following documents:
a/ To reject the request of the judgment enforcer, asset management
officer, asset management and liquidation firm or bankruptcy procedure
participants; or
b/ To transfer the request to a competent person for consideration and
making of a protest against the decision declaring the enterprise or
cooperative bankrupt in accordance with law.
3. In case the judgment enforcer, asset management officer, asset
management and liquidation firm or bankruptcy procedure participants
disagree with the document prescribed at Point a, Clause 2 of this Article, they
may request a competent person to consider and make a protest against the
decision declaring the enterprise or cooperative bankrupt in accordance with
law.

4. The asset management officer and asset management and liquidation
firm shall represent the enterprise or cooperative in the settlement of asset-
related disputes.
Chapter XI
BANKRUPTCY PROCEDURES INVOLVING FOREIGN ELEMENTS
Article 116. Bankruptcy procedure participants being foreigners
Bankruptcy procedure participants being foreigners shall comply with
Vietnam’s bankruptcy law.
Article 117. Judicial mandate by Vietnamese people’s courts to foreign
competent agencies
1. In the course of settling bankruptcy cases involving foreign elements,
people’s courts shall conduct judicial mandate according to mutual judicial
assistance agreements to which the Socialist Republic of Vietnam is a
contracting party or on the principle of reciprocity.
2. Judicial mandate procedures must comply with the laws on civil
procedures and mutual judicial assistance.
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Article 118. Procedures for recognition and enforcement of bankruptcy
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settlement decisions issued by foreign courts
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The recognition and enforcement of bankruptcy settlement decisions
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issued by foreign courts must comply with mutual judicial assistance
agreements to which the Socialist Republic of Vietnam is a contracting party
and other regulations on mutual judicial assistance.
Chapter XII
ENFORCEMENT OF DECISIONS DECLARING ENTERPRISES AND
COOPERATIVES BANKRUPT
Article 119. Competence to enforce bankruptcy declaration decisions
The competence to enforce bankruptcy declaration decisions is
prescribed in this Law, the law on civil judgment enforcement and other
relevant laws.
Article 120. Procedures for enforcement of bankruptcy declaration
decisions
1. Within 5 working days after a bankruptcy declaration decision is
issued, the civil judgment enforcement agency shall proactively issue a
decision on the enforcement of the bankruptcy declaration decision and
assign an judgment enforcer to enforce such decision.

2. After receiving the task assignment decision of the civil judgment
enforcement agency’s head, the judgment enforcer shall:
a/ Open 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;
b/ Supervise the asset liquidation conducted by the asset management
officer and asset management and liquidation firm;
c/ Apply coercive measures to recover assets and hand over such assets
to those entitled to buy assets in bankruptcy cases in accordance with the law
on civil judgment enforcement;
d/ After receiving a report on asset liquidation results from the asset
management officer or asset management and liquidation firm, implement the
asset division plan according to the decision declaring the enterprise or
cooperative bankrupt.
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Article 121. Request for asset management officers and asset
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management and liquidation firms to conduct asset liquidation
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1. Within 2 working days after receiving a task assignment decision
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issued by the head of the civil judgment enforcement agency, the judgment
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enforcer shall issue a written request to the asset management officer or asset
management and liquidation firm to conduct asset liquidation.
2. The written request to the asset management officer or asset
management and liquidation firm to conduct asset liquidation must have the
following principal details:
a/ Date of making;
b/ Name of the requesting judgment enforcer;
c/ Name of the asset management officer or asset management and
liquidation firm requested to conduct asset liquidation;
d/ Name and address of the bankrupt enterprise and cooperative;
dd/ Specific methods of asset liquidation as prescribed in Articles 122,
123 and 124 of this Law.
3. The written request to the asset management officer or asset
management and liquidation firm to conduct asset liquidation shall be sent to
the people’s court, people’s procuracy and bankruptcy procedure participants.
4. Past 2 years after receiving the written request from the judgment
enforcer as prescribed in Clause 2 of this Article, if the asset management
officer or asset management and liquidation firm fail to liquidate some assets,

they shall stop the liquidation and transfer all of such assets and their
documents to the civil judgment enforcement agency for handling and
liquidation in accordance with law.
Article 122. Asset valuation
1. Within 10 working days after the bankruptcy declaration decision is
issued, the asset management officer or asset management and liquidation
firm shall value assets in accordance with law.
Asset management officers and asset management and liquidation firms
may not sign valuation contracts with organizations or individuals with
whom they have related rights and interests.
2. For to-be-liquidated assets which are in danger of being destroyed or
significantly decreasing in their value, asset management officers and asset
management and liquidation firms shall value and liquidate such assets in
Article 123. Asset re-valuation
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1. Assets shall be re-valued when there are serious violations of Article
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122 of this Law which falsify asset valuation results.
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2. Judges shall decide on re-valuation of assets in case assets are sold
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under Clause 3, Article 23 of this Law. Judgment enforcers shall decide on
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re-valuation of assets in case assets are liquidated.
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Article 124. Sale of assets
1. Assets shall be sold in the following forms:
a/ Auction;
b/ Sale not through auction procedures.
2. The auction of movables each valued at over VND 10,000,000 and
real estate must comply with the law on asset auction.
Within 5 working days from the date of valuation, asset management
officers and asset management and liquidation firms shall reach agreement
with auction organizations. Asset management officers and asset
management and liquidation firms shall sign contracts on asset auction
services with auction organizations.
In case asset management officers and asset management and liquidation
firms cannot reach agreement with auction organizations, judgment enforcers
shall select auction organizations to sign contracts on asset auction services.
Contracts on asset auction services shall be signed within 10 days after
the date of valuation.

The auction of a movable shall be held within 30 days after the contract
on asset auction services is signed. For immovables, this time limit is 45
days.
firms may themselves hold an auction for a to-be-liquidated asset in the
following cases:
a/ There is no auction organization in the province or centrally run city
where the asset is located or auction organizations in such province or centrally
run city refuse to sign auction contracts;
b/ The asset is a movable valued at between VND 2,000,000 and VND
10,000,000.
The auction of a movable shall be held within 30 days from the date of
valuation or the date of receiving the auction organization’s written refusal to
provide asset auction services. For immovables, this time limit is 45 days.
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firms may sell not through auction procedures assets each valued at under
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VND 2,000,000 or assets prescribed in Clause 2, Article 122 of this Law.
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The sale of assets shall be conducted within 5 working days after the
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date of issuance of the decision on enforcement of the bankruptcy declaration
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decision or the asset sale decision.
5. Asset auction procedures must comply with the law on asset auction.
Article 125. Recovery of assets in cases of violation
1. Asset management officers, asset management and liquidation firms
or judgment enforcers may request people’s courts to issue a decision to
recover assets of enterprises or cooperatives due to performance of invalid
civil transactions under Article 59 of this Law. The recovery of assets must
comply with the law on civil judgment enforcement.
2. Disputes over asset recovery or differences in the value of assets of
enterprises or cooperatives shall be settled in accordance with Article 115 of
this Law.
Article 126. Termination of enforcement of bankruptcy declaration
decisions
The head of a civil judgment enforcement agency shall decide to
terminate the enforcement of a bankruptcy declaration decision in the
following cases:
1. The enterprise or cooperative that is declared bankrupt has no assets
to be liquidated or divided;

2. The assets of the enterprise or cooperative that is declared bankrupt
have been completely divided;
3. The head of the civil judgment enforcement agency has reported the
settlement of the bankruptcy case to the people’s court and notified related
individuals, agencies and organizations of the termination of enforcement of
the bankruptcy declaration decision.
Article 127. Handling of assets that arise after the issuance of decisions
declaring enterprises or cooperatives bankrupt
1. In case an invalid civil transaction prescribed in Article 59 of this
Law is detected after the decision declaring the enterprise or cooperative
bankrupt is issued, the asset management officer or asset management and
liquidation firm may request a people’s court to declare the transaction
invalid, settle consequences of the invalid transaction and divide assets of the
enterprise or cooperative in accordance with Article 54 of this Law.
2. In case an undivided asset is detected after the decision declaring the
enterprise or a cooperative bankrupt is issued, the people’s court which has
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declared the bankruptcy shall consider and decide on the division of such
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asset in accordance with Article 54 of this Law.
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3. Civil judgment enforcement agencies shall enforce asset division
decisions prescribed in Clause 2 of this Article.
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Article 128. Settlement of complaints about the enforcement of
decisions declaring enterprises or cooperatives bankrupt
The settlement of complaints about the enforcement of decisions
declaring enterprises or cooperatives bankrupt must comply with the law on
civil judgment enforcement.
Chapter XIII
HANDLING OF VIOLATIONS
Article 129. Responsibilities for violations of the bankruptcy law
1. Individuals, agencies and organization that commit violations of law
in the course of settling bankruptcy cases shall, depending on the nature and
seriousness of their violations, be disciplined, administratively sanctioned or
examined for penal liability; if causing damage, they shall pay compensation
in accordance with law.
firms that commit violations of law in the course of settling bankruptcy cases
shall be administratively sanctioned depending on the nature and seriousness
of their violations; if causing damage, they shall pay compensation in
accordance with law. In case asset management officers and other employees

of asset management and liquidation firms commit criminal offenses, they
may be examined for penal liability in accordance with law.
Article 130. Ban from holding managerial posts after enterprises or
cooperatives are declared bankrupt
1. Holders of the posts of president, director, general director and member
of the Board of Directors in enterprises with 100% state capital which are
declared bankrupt shall be prohibited from holding such posts in any state
enterprises from the date their enterprises are declared bankrupt.
2. Those who act as representatives of state capital at state-invested
enterprises which are declared bankrupt shall be prohibited from holding
managerial posts in any state-invested enterprises.
3. If holders of managerial posts in enterprises or cooperatives which are
declared bankrupt intentionally violate the provisions of Clause 1, Article 18;
Clause 5, Article 28; and Clause 1, Article 48 of this Law, judges shall
consider and decide to deprive them of the right to establish, or act as
managers of, enterprises and cooperatives within 3 years from the date
bankruptcy declaration decisions are issued.
. vn
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4. The provisions in Clauses 1, 2 and 3 of this Article shall not apply in
V
.L u a t
case enterprises or cooperatives go bankrupt for force majeure reasons.
w w w Chapter IX
IMPLEMENTATION PROVISIONS
Article 131. Transitional provisions
1. As from the effective date of this Law, assets of enterprises and
cooperatives which are detected after bankruptcy declaration decisions are
issued under Bankruptcy Law No. 21/2004/QH11 shall be handled in
accordance with Article 127 of this Law.
2. Complaints about and protests against bankruptcy declaration
decisions which are issued in accordance with Bankruptcy Law No.
21/2004/QH11 before the effective date of this Law and remain unsettled by
the effective date of this Law shall be settled according to the procedures
prescribed in Clause 2 of Article 111, and Articles 112 and 113 of this Law.
3. Petitions for initiation of bankruptcy procedures accepted by people’s
courts before the effective date of this Law shall be settled in accordance
with this Law if decisions declaring enterprises or cooperatives bankrupt
have not yet been issued.
4. The Government, the Supreme People’s Court and the Supreme
People’s Procuracy shall guide the implementation of this Article.

Article 132. Effect
1. This Law takes effect on January 1, 2015.
2. Bankruptcy Law No. 21/2004/QH11 ceases to be effective on the
effective date of this Law.
Article 133. Implementation detailing and guidance
The Government, the Supreme People’s Court and the Supreme People’s
Procuracy shall detail and guide the implementation of articles and clauses as
assigned in this Law.
This Law was passed on June 19, 2014, by the XIII th National Assembly
of the Socialist Republic of Vietnam, at its 7th session.-
Chairman of the National Assembly
NGUYEN SINH HUNG
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V i e t nam
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w w w

Chapter 4. Law On Bankruptcy 2014

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Chapter 4. Law On Bankruptcy 2014

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THE PRESIDENT THE SOCIALIST REPUBLIC OF VIETNAM

Independence - Freedom - Happiness

No. 11/2014/L-CTN Hanoi, June 30, 2014

THE PRESIDENT OF THE SOCIALIST REPUBLIC OF VIETNAM

Pursuant to Articles 88 and 91 of the Constitution of the Socialist

The Law on Bankruptcy,

President of the Socialist Republic of Vietnam

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