Determining who has the right and obligation to file a petition to open bankruptcy proceedings is very important. If allowing any individual or organization to have the right to file a petition to the court to declare bankruptcy, it is difficult to avoid the abuse of this opportunity to discredit or create difficulties for its competitors. On the contrary, if this right is excessively and arbitrarily restricted without any scientific basis, the consequences will be to make the bankruptcy settlement difficult to detect, adversely affecting the legitimate rights and interests of the company. the law of the businessmen who have a business relationship with the debtor enterprise. Therefore, Vietnam’s bankruptcy law is interested in solving this problem in order to create an appropriate and favorable legal corridor for all involved parties.
The subjects having the rights and obligations to file a petition to open bankruptcy proceedings are specified in Article 5 of the Law on Bankruptcy 2014. There are two groups of subjects with rights and those with obligations.
Firstly, the group of subjects has the right to file a petition to open bankruptcy proceedings
For unsecured or partially secured creditors
Clause 1, Article 5 of the Law on Bankruptcy 2014 provides:
“An unsecured creditor or a partially secured creditor has the right to file a petition for initiation of bankruptcy proceedings upon the expiration of 03 months from the date of maturity of the debt, but the enterprise or cooperative fails to perform its obligations. payment service”
Of course, in accordance with international practice, the creditor is always the first subject with the right to request the Court to settle the bankruptcy declaration of an enterprise.
Acquiring experience in developing bankruptcy laws in other countries, the Bankruptcy Law of Vietnam divides creditors into 3 categories according to Article 4 of the 2014 Bankruptcy Law:
+ Secured creditor: A creditor whose debt is fully secured by the debtor’s assets through contract performance security measures such as mortgage, pledge…
+ Partially secured creditor: A creditor whose debt is secured by the debtor’s property but the value of that property is less than the value of the debt. For example, enterprise X borrows from the Bank of Industry and Trade an amount of VND 3.5 billion, but mortgages its headquarters and factory with a value of VND 3 billion.
+ Unsecured creditor: A creditor whose debt is not secured by the debtor’s assets.
However, not all creditors have the right to file a bankruptcy petition, only unsecured and partially secured creditors have the right to claim corporate bankruptcy. With the argument that the secured creditor is always the holder because they are secured by the assets of the enterprise, the debtor’s cooperative or the guarantee of a third party, the bankruptcy law does not provide for the creditor, secured debtors the right to file for bankruptcy.
Previously, the Bankruptcy Law 2004 stipulated that a creditor only needs to “realize that an enterprise or cooperative is in a state of bankruptcy” to file a claim. However, currently, according to the 2014 Law, after 3 months when the debt is due, the debtor cannot pay the debt, the creditor has the right to file a request to open bankruptcy proceedings. This helps businesses and cooperatives have more time to recover their production and business activities, makes the bankruptcy process easier to see, and at the same time overcomes the abuse of the right to file a claim. opening bankruptcy proceedings from creditors.
The manner of the creditor’s petition to open bankruptcy proceedings is specified in Article 26 of the Law on Bankruptcy 2014.
For shareholders, groups of shareholders, members of cooperatives
According to Clause 5, Article 5 of the Bankruptcy Law 2014:
A shareholder or a group of shareholders owning 20% or more of the ordinary shares for a consecutive period of at least 06 months has the right to file a petition to open bankruptcy proceedings when the joint stock company becomes insolvent. A shareholder or a group of shareholders holding less than 20% of the ordinary shares for a consecutive period of at least 06 months has the right to file a petition to open bankruptcy proceedings when the joint-stock company becomes insolvent in the case of Article 2. prescribed by the company.
Shareholders are people who buy shares to contribute capital to a joint-stock company. Shareholders are the subject of property rights, so the interests of shareholders are closely related to the interests of the company. When the company is insolvent, which means benefits, shareholders’ assets are in jeopardy. Therefore, this regulation is intended to protect the interests of shareholders and groups of shareholders in a joint-stock company.
According to Clause 6, Article 5 of the Bankruptcy Law 2014, a member of a cooperative or the legal representative of an affiliated cooperative of a union of cooperatives has the right to file a petition for initiation of bankruptcy proceedings when the cooperative union of cooperatives is insolvent. Members of cooperatives or member cooperatives of unions of cooperatives are all subjects whose interests are closely tied to the existence of cooperatives. Therefore, when the cooperative falls into insolvency, members have the right to file a petition to open bankruptcy proceedings to protect their interests.
The time when the rights and obligations of these subjects arise is the time when the joint-stock company or cooperative becomes insolvent, that is, the joint-stock company or cooperative fails to perform the obligation to pay the debts. within 3 months from the due date of payment.
Second, the subject is obliged to file a petition to open bankruptcy proceedings
There are two entities obliged to file a petition to open bankruptcy proceedings.
Clause 3, Article 5 of the Law on Bankruptcy 2014 stipulates: “The legal representative of the enterprise or cooperative is obliged to file a request for initiation of bankruptcy proceedings when the enterprise becomes insolvent”.
Thus, for insolvent enterprises and cooperatives, filing is not only a right but also an obligation. The applicant must be the legal representative. When receiving the application, the judge must check the legitimacy of the petition to open bankruptcy proceedings as well as that of the representative signing the application. In addition to the application for opening bankruptcy proceedings against the enterprise or cooperative itself, the applicant must enclose the application with the papers and documents specified in Clause 3, Article 28 of the Law on Bankruptcy 2014.
More than anyone else, indebted businesses must know their financial status, so the law allows the representative of the enterprise to file a petition for bankruptcy proceedings. This is both an autonomy for business activities of enterprises and an obligation for society. This regulation is intended to help indebted enterprises and cooperatives have a basis to free themselves from insolvency, legally settle debt relationships or under the supervision of the Court. indebted cooperative enterprises may agree with creditors on measures of conciliation, reorganization of production and business activities, and limit damage.
Particularly, the second group of subjects only applies to businesses. Because members are only in different types of businesses, the above subjects appear. In cooperatives, there are only cooperative members and member cooperatives of unions of cooperatives, these subjects have the right to file a petition to open bankruptcy proceedings in Clause 6, Article 5 of the Law. this.
However, in practice, some businesses do not comply with this obligation. This is because many businesses when established have declared large charter capital but mainly virtual capital or the operation process has many unclear asset transfer transactions… bankruptcy, the ability of a competent state agency to re-examine the operation process and detect many violations, the capital contributor or the operator must take full legal responsibility. . This causes anxiety and avoids the filing of petitions to open bankruptcy proceedings of business owners.
Third, the subject has the right and obligation to file a credit institution’s application for opening bankruptcy proceedings
In fact, banks and other credit institutions are considered as special enterprises because of the following characteristics: these organizations act as a financial intermediary in the economy with different methods. operation means being able to have many accounts for its operations and at the same time have to manage a very large number of customer accounts. The impact of the failure of a credit institution on the general economy will happen quickly , the impact will be wide and the impact will be long lasting . Therefore, the bankruptcy of banks and credit institutions also need a special and more cautious mechanism than other ordinary enterprises.
Unlike ordinary enterprises and cooperatives, according to Article 98 of the Law on Bankruptcy 2014, subjects have the right to file a request to open bankruptcy proceedings in the case after the State Bank of Vietnam has a written termination of special control or written termination of application or non-application of measures to restore solvency but the credit institution is still insolvent. This regulation is consistent with the Law on Credit Institutions 2010. The above provisions will avoid the case that a credit institution is required to file a request to open bankruptcy proceedings when it is not really insolvent, causing panic, affecting the operation of other credit institutions. This also shows the role of the State Bank of Vietnam for credit institutions when it always wants to maintain a stable and safe situation for the national finance and benefits for the people.
According to Clause 1, Article 98 of the Law on Bankruptcy 2014, the subjects who have the right to file a petition for initiation of bankruptcy proceedings are creditors, employees, shareholders of joint-stock companies, members of cooperatives as prescribed in Clause 1, Article 98 of the Law on Bankruptcy. Clauses 1,2,5,6 of the 2014 Bankruptcy Law. These are the subjects with interests attached to the credit institutions, when their interests are infringed, they have the right to request the opening of bankruptcy proceedings. credit bureau.
According to Clause 2, Article 98 of the Bankruptcy Law 2014, credit institutions are obliged to file a request to open bankruptcy proceedings after the recovery measures of the State Bank of Vietnam have failed. The legal representative of the credit institution will personally file a petition to open bankruptcy proceedings, thereby resolving insolvency and debt settlement. This will reduce the burden on the State Bank, not having to worry about holding onto and dealing with the consequences for loss-making organizations. If a credit institution fails to file a request for initiation of bankruptcy proceedings, the State Bank of Vietnam shall file a request against such credit institution under Clause 2, Article 98 of the Law on Bankruptcy 2014.
Above is the consulting article on “Comments on legal provisions on subjects of finding procedures” of Apra Lawfirm. If you still have questions about the above issues and need to be answered, please contact the hotline for advice and support.
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