Luật 30-L/CTN

LAW

ON BANKRUPTCY

Chapter I

GENERAL PROVISIONS

Article 1

The present Law applies to enterprises under all forms of ownership which have been established and operated in accordance with the law of the Socialist Republic of Vietnam while getting into the state of bankruptcy.

The Government issues concrete regulations on the implementation of this Law in regard to enterprises directly servicing defence, security and important public services.

Article 2

An enterprise getting into the state of bankruptcy is an enterprise which is meeting difficulties or bearing losses in its business activity and after applying all necessary financial measures is still unable to pay mature debts.

Article 3

In this Law, terms below are understood as follows:

1. A "secured creditor" is a creditor whose loan is secured by the property of the indebted enterprises.

2. "Partially secured creditor" is a creditor whose loan is secured by property of the indebted enterprises, but the value of this property is less than value of the loan.

3. "Unsecured creditor" is a creditor whose loan is not secured by property of the indebted enterprises.

4. "Legal representative of the enterprise" is a person empowered by the enterprise's owner in accordance with the provisions of law.

Article 4

1. People's courts of provinces, of cities under central management (hereafter called generally courts) and the People's Supreme Court are organs having jurisdiction to settle a request for the declaration of an enterprise's bankruptcy.

2. The enforcement office for judgements under the Department of Justice, and the department for enforcement of civil judgements under the Ministry of Justice have jurisdiction to implement the decision on an enterprise's bankruptcy declaration.

Article 5

The Institutes of People's Inspection inspects the observance of laws during the settling of the bankruptcy of enterprises as stipulated by law.

Article 6

Voluntary conciliation between the creditors and the indebted enterprise, guarantee or repurchase of debts of enterprises getting into the state of bankruptcy are settled preferentially prior to the day the court decides to begin the case to resolve the request for an enterprise's bankruptcy declaration.

Chapter II

PROCEDURE OF SUBMISSION AND CONSIDERATION OF APPLICATIONS FOR AN ENTERPRISE’S BANKRUPTCY DECLARATION

Article 7

1. After the limit of 30 days from the day of sending the demand bill, without it being satisfied by the indebted enterprise, the unsecuted and partially secured creditors have the right to apply to the court in the place where the head office of the enterprise is located to request settlement of the enterprise's bankruptcy declaration.

2. The application for enterprise bankruptcy declaration must specify:

a. Name, surname of the applicant;

b. Name and head office of the enterprise requested to be declared bankrupt.

3. The application must be accompanied by a copy of the demand bill and documents pointing out the enterprise's inability to pay mature debts.

4. The applicant must pay fees in advance as stipulated by law.

Article 8

In the event the enterprise is not able to pay employee's wages three months consecutively, the representatives of the trade union or representatives of the labourers in a place having no trade union organization have the right to apply to the court in the place where the head office of the enterprise is located to request settlement of enterprise's bankruptcy declaration. After sending the application, the representatives of the trade union or of the labourers in a place having no trade union organization are considered creditors and do not have to pay fees in advance.

Article 9

1. In the event measures to overcome the financial difficulties to cover mature debts, including debt suspension have been applied but the enterprise cannot yet get out of the state of unability to pay mature debts, the enterprise's owner or enterprise's legal representative must apply to the court where the head office of the enterprise is located for the settlement of the enterprise's bankruptcy declaration.

2. The application must specify:

a. Name and head office of the enterprise; name and surname of the enterprise's owner or enterprise's legal representative;

b. Measures carried out by the enterprise which could not overcome the unability to pay mature debts;

c. The application must be accompanied by the list of the creditors and the debts to be paid each of them, the address of the creditors; a report on the responsibility of the director and members of the management broad of the enterprise in regard to the unability to pay mature debts; a report on business's state for six months prior to the unability to pay mature debts; financial summary reports of the last two years, if the enterprise has not yet operated for a full two years, a financial summary reports for the whole operating time, and relevant accounting files must be submitted.

3. The applicant must pay fees in advance as stipulated by law.

Article 10

During the settling of cases relating to enterprises, if it is revealed that an enterprise is getting into the state of bankruptcy, the courts inform the creditors, and these enterprises so that they apply for the settlement of the enterprise's bankruptcy declaration.

Article 11

The applicant who requests a court to settle an enterprise's bankruptcy is responsible for the contents of the application and for accompanying documents and materials.

The owner of the enterprise or the legal representative of the enterprise and the applicant are obliged to fully supply evidence and necessary documents as required by the court during the settling of the enterprise's bankruptcy declaration and are responsible for the accuracy of these materials.

Article 12

The court which receives and examines an application must record and hand over to the applicant a notice on the application's receipt and the documents accompanying.

During the 7 days from the day of receiving and examining an application, the court must notify in writing the indebted enterprise with a copy of the application and relevant documents accompanying.

During the 10 days from the day of receiving the court's notice, the enterprise which is the subject of the request for the settling of the bankruptcy declaration must send the court a report on the ability to pay debts. In the case of an unability to pay mature debts, the enterprise must send report and documents to the court as stipulated in points b and c, paragraph 2, Article 9 of this Law.

Article 13

During the 30 days from the day of receiving and examining an application the president of the Economic Court under the People's Court of a province or city under central management (generally called Economic courts of Provincial level) must examine the application with relevant materials. If it is considered that arguments are not sufficient, it makes a decision not to begin the case to settle the enterprise's bankruptcy declaration. This decision must specify the reason and must be sent to the applicant and the indebted enterprise. During the 15 days from the day of receiving the decision of the President of the Economic Court of Provincial level, the parties have the right to petition the President of the People's Court of Provincial level concerning this decision. During the 7 days from the day of receiving the petition, the president of the People's Court of Provincial level must make one of the following decisions:

1. Keep unchanged the decision of the president of the Economic Court of Provincial level.

2. Cancel the decision of the president of the Economic Court of Provincial level and request it to reconsider. During the 7 days from the day the president of the People's court of Provincial level has made its decision, the president of the Economic Court must issue a new decision. This decision must be sent to the president of the People's court of Provincial level and concerned parties. During the 15 days from the day of receiving the new decision of the president of the Economic Court, if the parties still petition, within 7 days the president of the People's court of Provincial level must consider and make a decision. The decision of the president of the People's court of Provincial level is effective to be carried out.

Article 14

Amount of fees for settling an enterprise's bankruptcy are decided by the court in accordance with the law on fees.

Chapter III

PROCEDURE FOR SETTLING A REQUEST FOR AN ENTERPRISE�S BANKRUPTCY DECLARATION

Section I. DECISION ON BEGINNING THE SETTLING PROCEDURE OF THE REQUEST FOR AN ENTERPRISE'S BANKRUPTCY DECLARATION

Article 15

During the 30 days from the day of receiving and considering applications or after 7 days from the day the president of court makes decision in accordance with point 2, Article 13 of this Law, if there appears sufficient basis, the president of the Economic court of Provincial level decides to begin the settling procedure of the request for an enterprise's bankruptcy declaration. The decision must specify the reason for beginning the settling procedure of the request for the enterprise's bankruptcy declaration, appoint the time of ceasing the debt payments of the enterprise, the name and surname of the judge in charge of settling the request for the enterprise's bankruptcy declaration and the members of the committee appointed to manage property.

Depending on the character of each specific matter, the president of the Economic court of Provincial level appoints a judge or a group of 3 judges (hereafter generally called the judge) and a Property Management Committee to settle the request for the enterprise's bankruptcy declaration. In the event of appointment of three judges one of them is assigned to be in charge.

The membership of the Property Management Committee is composed of: the cadres of the Economic court of Provincial level, the executive members of the Office for enforcement of judgement under the Department of Justice, representatives of the creditors, representatives of the indebted enterprises, representatives of the trade unions or labourers in a place having no trade union organizations, specialists of the financial bodies, provincial banks and other specialized branches. The Property Management Committee is headed by a cadre of the Economic court of Provincial level.

The work plan of the group of judges is determined by the president of the Supreme People's Court, the organizational and operational order of the Property Management Committee is determined by the Government after agreement with the Supreme People's Court.

The decision to begin the settling procedure of the request for an enterprise's bankruptcy declaration must be published in a local newspaper where the head office of the enterprise is located and in a central newspaper in three consecutive issues.

Article 16

1. The judge has the following obligations and rights:

a. To gather materials and evidences to create a file for settling the request for the enterprise's bankruptcy declaration;

b. To supervise and control the activities of the members of the Property Management Committee;

c. To make decisions to apply temporary urgent measures in case of necessity in accordance with the provisions of law in order to preserve the property of the indebted enterprise;

d. To organize and chair conferences of the creditors;

e. To make the decision to cease temporarily or cease the settlement of the request for the enterprise's bankruptcy declaration;

g. To declare the enterprise bankrupt;

2. During the settling of the request for the enterprise's bankruptcy declaration, if indications of crime are revealed, the judge supplies the information to the Office of People's Prosecutor of similar level for prosecution of criminal liability.

3. The judge is responsible to the president of the People's court of Provincial level for implementing his or her obligations and rights.

Article 17

The Property Management Committee has the following rights and obligations:

1. Compile the list of all assets of the enterprise;

2. Supervise and control the management of the enterprise's property. In case of necessity, it has the right to require the judge to decide to apply temporary urgent measures to preserve the remaining assets of the enterprise;

3. To gather a list of creditors and the amount of debt to be paid to each creditor;

The Property Management Committee is responsible to the judge for the implementation of its obligations and rights.

Article 18

1. During the settling of the request for the enterprise's bankruptcy declaration, the director and members of the management board are still responsible for the results of the production and business activities of the enterprise. All activities of the enterprise are still carried out in an ordinary manner but are subject to the supervision and control of the judge and the Property Management Committee.

2. From the day of receiving the decision to begin the settling procedure for the request for the enterprise's bankruptcy declaration, the indebted enterprise is strictly prohibited from carrying out the following matters:

a. To hide or disperse assets of the enterprise;

b. To give as security, to mortage, to cede or to sell assets of the enterprise or to pay secured debts by means of assets of the enterprise without the consent in writing of the judge;

c. To pay any unsecured debt to any creditor.

Newly arising debts from the business activity of the enterprise after the decision to begin the settling procedure of the request for an enterprise's bankruptcy declaration are resolve as stipulated in Article 23 of this Law.

d. To refuse or reduce the right to demand debts.

e. To become a source of security for previous unsecured debts.

g. To sell, or exchange the shares or to transfer the right to ownership of the assets of the enterprise.

Article 19

The property of an enterprise includes all property subject to ownership of the enterprise or subject to management of the enterprise (in regard to state enterprises) which is composed of:

1. Immovable and movable property of the enterprise at the current time;

2. Money or invested property, joint ventures, associations with other persons, enterprises or other organization;

3. Money or property of the enterprise that is borrowed or appropriated by other individuals or business enterprises.

4. Property which the enterprise is renting or lending.

5. Rights to property.

Property of a private business enterprises includes also the property of the owner of the private business enterprise which is not used in business.

Article 20

Immediately after the decision to begin the settling procedure of a request for an enterprise's bankruptcy declaration has been issued, the judge must request the owner of the enterprise or its legal representative to work out the conciliation measures and solutions for reorganization of the business. The term of the business reorganization is decided by the meeting of the creditors but does not exceed two years from the day of the passing of the conciliation measures by the meeting of the creditors.

Conciliation measures and for business reorganization must contain concrete methods and implementations steps: they must also have a debt paying schedule for creditors and wages for employees.

Conciliation measures and solutions for the business reorganization of the enterprise must be submitted to the judge during the 60 days from the day of his request. By the end of this term, if no conciliation measure is found, the judge declares the enterprise bankrupt and organizes the meeting of the creditors to discuss measures for dividing remaining property value of the enterprise.

Article 21

During the 60 days from the first day of publishing in the local newspaper or daily central newspaper the court's decision to begin the settling procedure of the request for an enterprise's bankruptcy declaration, the creditors must submit the court the demand bills of the enterprise. A creditor's application must specify the debts that must be paid by the enterprise pointing out the mature and immature debts, secured and unsecured debts along with documents and evidences concerning these debts.

Article 22

During the 15 days from the end of the term for sending the demand bill, the Property Management Committee must complete the list of the creditors and the debts (hereafter called list of the creditors). This list must specify the debts of each creditor among which are the secured debts and the unsecured debts, mature debts and immature debts, and must be posted up publicly at the provincial court, at the head-office and branches of the enterprise for 10 days. In this term the creditors and the indebted enterprise have the right to petition the judge about the list of the creditors. The judge considers the petition, and if there are reasons, makes amendments and supplements to the list of the creditors. By the end of this term the Property Management Committee closes of the creditors. The creditors who did not send demand bills are deprived of the right to participate in the meeting of the creditors.

Article 23

From the time of ceasing debt payments, the enterprise must not pay debts interest; immature debts are considered as mature ones, however interest is not counted toward for the time before the appointed moment.

During the settling of an enterprise's bankruptcy declaration, newly arising debts from the business operations of the enterprise and wage payments to the workers of the enterprise are paid under the supervision of the judge.

Section II. MEETING OF THE CREDITORS

Article 24

The meeting of the creditors has the following rights and obligations:

1. To examine and approve the conciliation measures to reorganization the business activity of the enterprise;

2. To discuss with and propose to the judge the division of the remaining property value of the enterprise if a conciliation measures has not been achieved or approved.

Article 25

All individuals, enterprises, and organizations in the list of creditors are members of the meeting of the creditors.

A creditor may empower in writing the another person to participate in the meeting of the creditors; an empowered person has the same rights and obligations as a creditor.

Only the unsecured or partly secured creditors have the voting right at the meeting of the creditors.

Representatives of trade unions or of labourers at places having no trade union organizations have the rights to participate in the meeting of the creditors, but do not have the voting right, except as otherwise provided as in Article 8 of this Law.

Article 26

A guarantor after paying debts for the indebted enterprise becomes an unsecured creditor and has the same rights and obligations as the other unsecured creditors and may participate in the meeting of the creditors and share in the remaining property value of the enterprise declared bankrupt in proportion to the debt payments to the creditors.

The creditors whose part of debt is covered by the guarantor are allowed to participate in the division of the remaining property value of the indebted enterprise in proportion to amounts of the unpaid debt.

Article 27

During the 30 days from the day of closing the list of the creditors, the judge convenes and chairs the meeting of the creditors. Invitation to the meeting of the creditors must be sent to the members and participants of the meeting at least 15 days before its opening.

The invitations must be accompanied by copies of the conciliation measures and the solutions for the business reorganization of the enterprise.

Article 28

The owner of the enterprise or the legal representative of the enterprise must be at the meeting of the creditors to present the conciliation measures and solutions for the business reorganization of the enterprise and to answer questions put forward at the meeting. The owner of the enterprise or the representative of the enterprise who cannot participate in the meeting for acceptable reason must empower in writing another person to participate in the meeting. The empowered person has the same rights and obligations as the owner of the enterprise or the representative of the enterprise at the meeting of the creditors. In the case of the death of the private enterprise's owner, his legal successor participates in the meeting in place of him.

Article 29

The meeting of the creditors is only valid with the participation of more than half of the creditors representing of at least 2/3 of the total of the unguaranteed debts.

The report of a successful conciliation for the solution of the business reorganization of the enterprise will be valid legally only when it is approved by more than half of the creditors representing of at least 2/3 of the total of the unguaranteed debts. The report of the successful conciliation must specify the agreed issues and contain and the signatures of the judge and the creditors participating in the meeting. Based on the report of the successful conciliation, the judge makes a decision to suspend temporarily the settlement of the request for the enterprise's bankruptcy declaration. The agreements in the report the successful conciliation are compulsory for all creditors and indebted enterprises.

Article 30

The meeting of the creditors may be postponed one time in cases of:

1. Absence of more than half of the creditors representing of at least 2/3 of the total of the unsecured debts;

2. Vote of the majority of the creditors at the meeting for postponed the meeting.

Article 31

1. During the 30 days from the day of postponing the meeting of the creditors, the judge must recall and chair the meeting. The invitation must be published in the local and central daily newspaper one time and must be sent to the members and the participants at least 15 days before the opening of the meeting. The meeting is valid with the participation of a number of creditors sufficient to represent at least 2/3 of the total of the unsecured debts.

The decision to approve the conciliation measure and solution for the business reorganization of the enterprise at this meeting will be valid legally with the consent of creditors representing of at least 2/3 of the total of the unguaranteed debts of the creditors present.

The agreements in the report of the successful conciliation of the meeting are compulsory for all creditors and indebted enterprises.

2. If the meeting of the creditors fails owing to the absence of the creditors as stipulated in point 1 of this Article, the judge makes a decision to cease the settlement of the request for an enterprise's bankruptcy declaration and the decision must be published in a local and central daily newspaper in three consecutive issues.

Article 32

The contents of the meeting of the creditors must be recorded fully in its report. The report must be signed by the judge, the secretary, the owner or the representative of the enterprise and the creditors who attended the meeting.

Article 33

The Judge makes the decision to accept the report on a successful conciliation and solution for the enterprise's business reorganization of the meeting of the creditors and to suspend temporarily the settlement of the enterprise's bankruptcy. The judge must publish this decision in a local and a central daily newspaper in three consecutive issues.

Article 34

The owner or the representative of the enterprise is responsible for the implementation of the solution for business reorganization in accordance with the plan and schedule approved by the meeting of the creditors.

The crediators are obliged to carry out the agreements of the meeting of the creditors and to supervise the implementation of these agreements by the enterprises.

Article 35

During the reorganization of the business, if the enterprise carries on business effectively, fulfils its obligations in keeping with the plan approved by the meeting of the creditors and there are no petitions of the creditors to the court, the owner of the enterprise has the right to ask the judge to cease the settlement of the request for the enterprise's bankruptcy declaration. The Judge makes a decision on ceasing the settlement of the request for the enterprise's bankruptcy declaration and must publish the decision in a local and a central daily newspaper in three consecutive issues.

Section III. DECLARATION OF AN ENTERPRISE'S BANKRUPTCY

Article 36

The Judge makes the decision to declare an enterprise bankrupt in the following cases:

1. The owner or the legal representative of the enterprise have not found conciliation measure and the solutions for the business reorganization of the enterprise as stipulated in Article 20 of this Law.

2. The owner or the legal representative of the enterprise does not implement the regulations in Article 28 of this Law;

3. The meeting of the creditors does not approve the conciliation measure and the solution for the business reorganization of the enterprise;

4. The term for the business reorganization of the enterprise ends but the enterprise still fails to carry on business effectively and the creditors require the enterprise to be declared bankrupt.

5. During the reorganization of the business the enterprise violates seriously the agreements of the meeting of the creditors and the creditors request the bankruptcy declaration;

6. During the settling of the enterprise's bankruptcy the owner of a private enterprise runs away or dies and the successor refuse to succeed or there is no the successor.

Article 37

The decision on an enterprise's bankruptcy declaration must contain the following contents:

1. Name of the court, name, surname of the Judge dealing with the settlement of the request for the enterprise's bankruptcy declaration.

2. Date and reception number of the application for the enterprise's bankruptcy declaration.

3. Name and address of the enterprise to be declared bankrupt.

4. Date of the enterprise's bankruptcy declarations.

5. Reason for the enterprise's bankruptcy declaration.

6. Measures for dividing the property value of the enterprise.

This Decision must be sent to the creditors, the enterprise declared bankrupt and the Office of People's Prosecutor at the same level.

Article 38

During the settling of the request for the enterprise's bankruptcy declaration, the Judge makes a decision to preserve the mortaged assets or assets given as security, and organizes the appraisal of these assets. If the value of the mortaged assets or assets given as security is not sufficient to cover the debts of the secured creditors, these creditors have the right to participate in the division of the remaining property value of the enterprise as the other unsecured creditors. If the value of these mortaged assets or assets given as a security is bigger than the debts, the difference will be included in the remaining property value of the bankrupt enterprise.

Article 39

The division of the remaining property value of the enterprise is carried out in the following preferential order:

1. Fees, expenses as stipulated by law for the settlement of enterprise's bankruptcy;

2. Wage, debts, work leave allowances, social insurance as stipulated by law and other interests as agreed upon in the collective labour agreement and signed labour contracts.

3. Tax debts;

4. Debts to the creditors in the list of the creditors:

a. If the remaining property value of the enterprise is sufficient to cover the debts of the creditors, each creditor is paid fully for their debts;

b. If the remaining property value of the enterprise is not sufficient to cover the debts of the creditors, each creditors is paid only partly for their debts in corresponding proportion.

5. If there will be a surplus from the remaining property value used to cover fully the debts of the creditors, this surplus will belong to:

a. The owner of the enterprise if it is a private enterprise;

b. Members of the company if it is a company;

c. The State Budget if it is a State enterprise.

Article 40

1. During the 30 days from the day of the decision on the enterprise's bankruptcy declaration, the creditors and the enterprise declared bankrupt have the right to submit a complaint and the Office of People's Prosecutor of the same level has the right to protest this decision. By the end of this term if there no complaint or appeal, the decision on the enterprise's bankruptcy declaration is effective for implementation.

In case of complaint or appeal, during the 5 days from the day of receiving the complaints or appeals, the Judge having made the decision on the enterprise's bankruptcy declaration must send the file on the enterprise's bankruptcy to the court of appeal under the Supreme People's Court.

2. During the 60 days from the day of receiving the file on the enterprise's bankruptcy, a group composed of 3 judges and appointed by the president of the Court of Appeal under the Supreme People's Court settles completely the complaints or appeals. The Decision of the Court of Appeal under the Supreme People's Court is final.

Article 41

At the least 10 days from the day the decision on the enterprise's bankruptcy declaration comes into effect, the judge must publish the decision in a local, and a central daily newspaper in three consecutive issues.

A copy of the decision on the enterprise bankruptcy declaration must be sent to:

a. The office for enforcing civil judgements under the Department of Justice;

b. The creditors and the enterprise declared bankrupt;

c. The Office of People's Prosecutor and financial labour organs at the same level;

d. The organ issuing licence on enterprise's establishment.

As for office for enforcement of judgements, the decision on the enterprise's bankruptcy declaration sent to it must be accompanied by copies of the decision on the enterprise's bankruptcy declaration and documents necessary for the implementation of this Decision.

The Judge of the Economic Court must supervise the transfer of the assets, documents and, materials concerned between the Property Management Committee and the Property Liquidation Committee.

Chapter IV

IMPLEMENTATION OF THE DECISION ON AN ENTERPRISE'S BANKRUPTCY DECLARATION

Article 42

1. The implementation of the decision on an enterprise's bankruptcy declaration is under the jurisdiction of the Enforcement office for judgements under the Department of Justice in the place where the head-office of the enterprise is located.

2. The head of the Enforcement office for judgements appoints the executives in charge of implementing the enterprise's bankruptcy declaration; makes the decision of the establishment of the Property Liquidation Committee and controls and supervises the activity of the Property Liquidation Committee.

The membership of the Property Liquidation Committee is composed of:

a. The executives and cadres of the office for enforcement of judgements;

b. The representatives of the financial and banking bodies at the same level;

c. The representatives of the creditors and trade unions or of the labourers in places having no trade unions;

d. The representative of the bankrupt enterprise;

The members of the Property Management Committee may be appointed to take part in the Property Liquidation Committee.

The Property Liquidation Committee is headed by a group leader who is a member of the committee.

The organizational and active order of the Property Liquidation Committee is decided by the Government.

Article 43

The executives in charge of implementing the decision on the enterprise's bankruptcy have the following rights and obligations:

1. Make decision to take back and sell by auction the assets of the enterprise declared bankrupt.

2. Implement measures for dividing assets according to the decision on the enterprise's bankruptcy declaration of the Judge.

3. Make a decision to block accounts of the bankrupt enterprise in banks, to open new bank accounts to deposit money received from the taking back of loans of the bankrupt enterprise and from the selling by auction of assets of the bankrupt enterprise.

The executive is responsible to the head of the Office for enforcement of judgement during the implementing his own obligations and rights.

Article 44

The Property Liquidation Committee has the following obligations and rights:

1. Receive surrendered assets and relevant materials and documents from the Property Management Committee.

2. Take back and manage all assets, documents, accounting books and stamps of the bankrupt enterprise.

3. Find out and request the executive's permission to take back the assets of the enterprise or the property value or the difference in the property value of the enterprise sold or transferred illegally as stipulated in Article 45 of this Law. The property liquidation committee takes back property, property value and the difference according to the decision of the executive.

4. According to the decision of the executive, the Property Liquidation Committee organizes the sale by auction of the enterprise�s assets. The sale by auction must be affirmed by the state notary office. If assets to be sold complete equipment, it is sold completely and is sold in retail only in the case of the failure of the complete sale. The auction of asset and the settlement of the right to the land use of the enterprise must strictly observe the law;

5. Deposit all money taken from the enterprise to the new bank accounts;

6. Carry out payment in accordance with the enterprise's bankruptcy declaration by the Judge.

Article 45

1. The executive requests the court to make a decision to take back property, property value of the enterprise and difference in the property value of the enterprise if during the 6 months prior to the day of receiving and considering the application for the enterprise's bankruptcy declaration the enterprise commits the following violations:

a. To disperse and hide the assets of the enterprise in whatsoever forms;

b. To pay unmatured debts;

c. To refuse the right to require a debts into a secured debts;

d. To transform an unsecured debts into a secured debts;

e. To sell the assets of the enterprise at a rate lower than their genuine value.

2. Before taking back the property or the difference in the property value of the enterprise declared bankrupt, the Property Liquidation Committee is obliged to present the decision of the court, to explain clearly the reason for taking back the property or the difference in property value to the person concerned. Deputes concerning the taking back of property or the difference in property value of the enterprise are decided by the court.

Article 46

During the 30 days from the day of an enterprise's bankruptcy declaration, the owner of the property lent or rented to the enterprise for business must present documents which certify the right to ownership and the contract on renting or lending to the executive in order to take back his or her property.

In case of advance payment by the enterprise, before the tenancy term expires, the owner of the property only can be get back the property after paying back the amount of rent left excess for the time not used up so that the Property Management Committee could include it into the remaining property of the enterprise.

Article 47

During the implementation of the decision on the enterprise's bankruptcy declaration, a person concerned has the right to petition the head of the Office for enforcement of judgements under the Department of Justice. During the 7 days from the day of receiving the application, the head of the Office for enforcement of judgements under the Departments of Justice must consider, resolve and answer the petitioner. In case of a disagreement with the decision of the head of the Office for enforcement of judgements under the Department of Justice. The person concerned has the right to petition the head of the Department for enforcement of Civil Judgements under the Ministry of Justice. During the 30 days from the day receiving the petition, the head of the Department for enforcement Civil Judgements must make on of the following decisions:

1. To preserve intact the decision of the head of the Office for enforcement of judgements under the Department of Justice;

2. To cancel the decision being petitioned against and assign it to the head of the Office for enforcement of judgements for resolution again;

Article 48

At the end of the liquidation, the head of the Office for enforcement of judgements makes a decision to terminate the implementation of the decision on the enterprise's bankruptcy declaration. The decision must be sent to the business registration organ so that the enterprise may be striken off the registered list.

Chapter V

TREATMENT OF VIOLATIONS

Article 49

1. Persons who commit violations as shown below, depending on the degree of seriousness of the violations are punished administratively, have damages imposed or are prosecuted for criminal responsibility as stipulated by law:

a. To commit actions which are strictly prohibited as stipulated in Article 18 of this Law or other dishonest actions during the settling of the request for the enterprise's bankruptcy declaration.

b. To make a threat or commit other actions to force the enterprise to apply for a bankruptcy declaration.

c. To do harm to or to destroy the property of the enterprise purposely.

2. During the settling of the enterprise's bankruptcy if the judge, members of the Property Management Committee, executive members, members of the Property Liquidation Committee violate the regulations of this Law and other provisions of law, according to the level of lightness or seriousness, they are to be disciplined administratively or prosecuted for criminal responsibility in accordance with the law.

Article 50

1. The director, chairman and members of the management board of the enterprise declared bankrupt are not allowed to take the same positions in any other enterprise for a term from one to three years counted from the day the enterprise is declared bankrupt.

2. The director, chairman and members of the management broad of the enterprise which has become bankrupt in the following cases are not covered by point 1 of this Article:

a. The enterprise becomes bankrupt due to force-majeure as stipulated by the Government;

b. The director, chairman and members of the management board do not directly bear responsibility for the bankruptcy of the enterprise.

c. The director or chairman of the management board have submitted voluntarily an application for the enterprise's bankruptcy declaration in accordance with law and have covered in full the debts to the creditors.

Chapter VI

IMPLEMENTATION CLAUSES

Article 51

The settlement of the bankruptcy of an enterprise which is located in Vietnam and concerned foreign individuals or organizations is carried out under this Law, except as otherwise provided by international conventions which the Socialist Republic of Vietnam has signed or acceded to.

Article 52

The present Law comes into force from July 1, 1994.

Previous regulations contrary to the present Law are abrogated.

The Government, Supreme People's Court, and Supreme Office of People�s Prosecutor issue the detailed provisions for the implementation of this Law.

The present Law was passed on December 30, 1993 by the National Assembly of the 9th Legislature, 4th Session of the Socialist Republic of Vietnam.

(This translation is for reference only)