DECREE No DECREE No. 189-CP ON THE 23RD OF DECEMBER 1994 OF THE GOVERNMENT GUIDING THE IMPLEMENTATION OF THE LAW ON BUSINESS BANKRUPTCY THE GOVERNMENT Pursuant to the Law on Organization of the Government on the 30th of September 1992; Pursuant to the Law on Business Bankruptcy on the 30th of December 1993; At the proposals of the Minister of Justice, the Minister of Finance and the Minister-Chairman of the State Planning Committee. DECREES: I. ON THE JURISDICTION OF THE LAW ON BUSINESS BANKRUPTCY Article 1.- 1. The businesses under the jurisdiction of the Law on Business Bankruptcy comprise: a/ State-owned businesses; b/ Businesses of political and social organizations; c/ Private businesses; d/ Limited liability companies; e/Stock companies; f/ Businesses with 100% of foreign investment; g/ Cooperatives. 2. The individuals and business groups founded and operating under Decree No. 66-HDBT on the 2nd of March 1992 of the Council of Ministers (now the Government) do not come under the jurisdiction of the Law on Business Bankruptcy. Article 2.- The settlement of bankruptcy of the businesses with partial or entire foreign investment shall comply with the Law on Business Bankruptcy, the Law on Foreign Investment in Vietnam, this Decree and other legal documents with shall provide detailed guidance on the settlement of bankruptcy in conformity with the specific character of these businesses except otherwise provided for in the international treaties which the Socialist Republic of Vietnam has signed or acceded to. II. BASES ON WHICH TO DECIDE A BUSINESS HAS FALLEN INTO BANKRUPTCY SITUATION Article 3.- 1. A business is deemed to have shown signs of falling into the bankruptcy situation defined at Article 2 of the Law on Business Bankruptcy when it has taken losses for two consecutive years to the point that it is no longer capable of repaying the due debts, of giving full pay to its laborers under the labor agreement or contract for three consecutive months. 2. When signs of bankruptcy situation appear as defined in Item 1 of this Article, the business shall have to take financial measures to overcome insolvency. These include: a/ To adopt a program to reorganize production and business, exert tight control of expenditures, and find outlets for its products. b/ To take measure to handle commodities, products and materials in stock. c/ To recuperate the misappropriated loans and properties. d/ To negotiate with creditors to delay payment of debts, to assure loan transfer or guarantee, to reduce or write off debts. e/ To seek for sources of funding and loans to pay the due debts and to invest in technological renewal. 3. After having taken the necessary financial measures mentioned at Item 2 to this Article, if the business still is not out of difficulties and cannot overcome insolvency then it has fallen in the bankruptcy situation and must be dealt with as prescribed by the Law on Business Bankruptcy and this Decree. III. ON THE IMPLEMENTATION OF THE ENACTMENT OF THE LAW ON BUSINESS BANKRUPTCY AT THE BUSINESSES DIRECTLY CATERING FOR NATIONAL DEFENSE AND SECURITY AND THE IMPORTANT PUBLIC UTILITY SERVICES. Article 4.- 1. The businesses eligible for recognition as directly servicing defense and security or important public utility services must operate in the following domains and branches: a/ Manufacturing or repairing weapons, equipment and special-purpose facilities for national defense and security, and the businesses which combine economy with defense in the important strategic areas; b/ Engaged in financial, monetary and insurance businesses; c/ Producing and supply of electricity; d/ Urban communications and public works; e/ Rail and air transport; f/ Telecommunications; g/ Management and exploitation of water conservancy works; h/ Management and building of special-purpose forests and key national forest preserves. 2. The Minister of the controlling ministry, upon receiving the written consent of the Minister-Chairman of the State Planning Committee and the Minister of Finance, shall draw up and make public the list of the names of the businesses stipulated at Item 1 of this Article. Article 5.- 1. In the event that a business defined at Article 4 of this Decree falls into the situation of insolvency, its legal representative shall have to immediately send a written report to the agency which has issued the decision to found the business. The report must clearly state the reasons, the real financial situation and the measures already taken to overcome insolvency. 2. Within fifteen (15) days after receipt of the report, the Head of the agency which has issued the decision to found the business shall consider and study the report and decide the necessary measures to restore the capability of the business to pay the due debts. 3. In case the measures for restoring the capability of the business of paying its debts are beyond its means, the Head of the agency which has issued the decision to found the business must report to the Prime Minister for consideration and adoption of measures to support or not to support the business. Article 6.- 1. The Court shall issue the decision to open procedures for settling the request of declaration of bankruptcy of a business directly servicing national defense and security or an important public utility service mentioned at Article 4 of this Decree only after receipt of the official dispatch of the Prime Minister or the Head of the State agency which has issued the decision to found the business on the non-resort to necessary measures to restore the capability of the business to pay the due debts. 2. After the Court has received the request for declaration of bankruptcy, the procedures to settle the bankruptcy of a business directly servicing defense and security or an important public utility service shall be undertaken as prescribed by the Law on Business Bankruptcy, this Decree and other legal documents related to the settlement of business bankruptcy. IV. ON THE LEGAL REPRESENTATIVE OF THE BUSINESS Article 7.- 1. The legal representative of a business in the process of settling the request for declaration of bankruptcy may be a representative by law or a representative by mandate. 2. The legal representative of a business may be one of these persons: a/ The President of the Managerial Board of a State-owned business or a business of political and social organizations which has such a board, or the Director or General Director of a State-owned business or a business of political or social organization which has no Managerial Board. b/ The President of the Managerial Board of a stock company, a business with foreign investment, or a limited liability company having 12 and more members. In case this company has no Managerial Board, the legal representative is the person assigned to manage the company and this is written in the company Statute. c/ The Chairman of a cooperative. 3. The representative by law of the business stated at Item 2 of this Article may empower in writing a member of the Management Council, the Managerial Board, the Deputy Director or Deputy General Director, or Deputy Chairman to join in the process of settling the bankruptcy of the business. The mandate must clearly define the authority with the representative is empowered to act. 4. The owner of a private business, the owner of a business with 100% of foreign investment where a managerial board is not set up, must directly take part in the process of settling the bankruptcy of the business. He/she may, for a plausible reason, empower in writing another to take part in this process. V. ON THE PARTICIPATION OF THE TRADE UNION IN THE SETTLEMENT OF THE BANKRUPTCY OF A BUSINESS Article 8.- 1. The representative of the grade union at the business to join the process of settling the bankruptcy of the business is the Chairman of the Executive Committee of the Trade Union or a person who is empowered by the latter in writing. 2. The representative of the trade union of the business performs his rights and obligations of a creditor in the process of joining the process of settling the bankruptcy of the business as prescribed by the Law on Business Bankruptcy and this Decree. Article 9.- The representative of the trade union shall file a request for declaration of bankruptcy of the business when the two following conditions have been gathered: 1. The business falls to pay fully the salaries to the laborers under the labor agreement or labor contract for three consecutive months; 2. The trade union has adopted a resolution requesting the settlement of the declaration of bankruptcy of the business. VI. ON THE DOSSIER REQUESTING THE SETTLEMENT OF THE DECLARATION OF BANKRUPTCY OF A BUSINESS Article 10.- A creditor when sending to the Court a request for settlement of the declaration of the bankruptcy of a business as stipulated at Article 7 of the Law on Business Bankruptcy has to enclose the following documents to testify to the debts: 1. A copy of the claim of a due debt; 2. The documents related to the settlement of disputes over the debt; 3. The documents testifying to the insolvency of the business. More concretely: a/ With regard to borrowings, these are debt acknowledgement documents and other papers testifying to the due debts which are not yet repaid to the creditor; b/ With regard to the debts arising out in the course of business activities, these are contracts of goods exchanges and dealing, or service contracts attached to the sales receipts or receipts of service supply, and other papers certifying that the dept is due but has not been repaid; c/ With regard to the debts from the renting of properties, these are the renting contract, the minutes of the delivery of the properties and other papers testifying that the debt related to the renting of properties is due but not yet repaid by the business; d/ With regard to the debts in tax and other budgetary debts, it is the tax returns and other vouchers whereby the business has the duty to repay to the State budget; e/ With regard to the unpaid wages, work severance allowances, social insurance allowances and other interests of the laborers, it is the labor contract, the labor agreement, the working-day records, the test on completion of products or services, the records of salaries or wages, the certificates of social insurance payments and other vouchers related to other interests of the laborers; f/ With regard to other debts, it is the comparative notes between the creditor and the indebted business. 4. Other documents, if deemed necessary. Article 11.- When sending a request to settle the declaration of bankruptcy a stipulated at Article 9 of the Law on Business Bankruptcy, the legal representative of the business, the owner of the private business, the owner of a business with 100% of foreign investment where no managerial board has been set up must send the following documents: 1. The list of the creditors with specifications of their addresses, the debt to be paid to each creditor, the due debts the undue debts the guaranteed debts, the partially guaranteed debts, and the unguaranteed debts; 2. A report on the business situation during the six months before the business became insolvent; 3. A final statement of accounts and a detailed description of the financial situation in the last two years or from the moment the business began operating if it is a business which has operated for less than two years. This report must be certified by the audit agency. For a State-owned business, it must also be endorsed by the authorized State agency under current regulations; 4. A report on the financial measures already taken by the business to overcome insolvency; 5. A report on the responsibility of the Chairman and the members of the Managerial Council or the Managerial Board, or the Director or General Director, for the insolvency of the business. 6. A copy of the accounting documents including the synthetic book; the detailed inventory of the property, materials, commodities; the record of public debts; the record of advance money and other related accounting book at the request of the Court. 7. Other documents, if deemed necessary. Article 12.- Besides the contents stipulated at Article 11 of this Decree, the legal representative of the business, the owner of the private business, the owner of the business with 100% of foreign investment where there is no managerial board, when requesting the declaration of bankruptcy, shall have also to send to the People�s Court at the provincial level a report on its capability of debt payment. This report shall have to cover the following main points: 1. Flotation cash, the remainder of deposits (in Vietnamese and foreign currencies), the value of gold, silver, gems and the value of all the papers which can be used in payment. 2. An inventory of the categories, volumes and value of materials, products and goods in stock, goods under transportation based on the book of accounts and estimated according to the market prices. In this inventory the business must specify the value of the marketable materials, products and goods, the value of those used as guarantee or collateral, and the valued of the unfinished materials, products and services which can be marketed or sold. 3. The value of the remaining fixed assets shall be evaluated on the basis of the accounting price and the estimate based on market prices. The business must specify which proper assets shall be used as guarantee or collateral, the value of unfinished infrastructure construction, including the money which can be recovered through the sale of these constructions. 4. The properties and capital contributed to the cooperation and joint ventures in which the recoverable capital must be specified. 5. The list of the debtors of the business with specifications of their addresses, and the debts to be recovered from each debtor, the due debt, the current debt and the recoverable debts. 6. The value of property right in all forms as prescribed by law. VII. ON THE REALIZATION OF RECONCILIATION AND THE SOLUTION TO THE REORGANIZATION OF THE BUSINESS ACTIVITIES OF THE BUSINESS Article 13.- The reconciliation plan and the solution of reorganizing the business activities of the business stipulated at Article 20 of the Law on Business Bankruptcy comprise the following main contents: 1. Proposal for debt deferment, debt reduction, debt annulment, debt transfer, debt guarantee and other measures aimed at overcoming the insolvency of the business, commitment of the business on the term, amount and modalities of payment of due debts. 2. The measures to reorganize the business operations of the business include financial measures, reorganization of the apparatuses, reorganization of labor, improvement of management, perfecting and renewal of technology and other necessary masseurs aimed at overcoming the insolvency of the business. Each measure must specify the concrete term and plan of implementation. 3. The plan of reconciliation and the solution of reorganization of the business operations mentioned at Item 1 and Item 2 of this Article must be done in writing and bear the signature of the legal representative of the business, the owner of private business, or the owner of the business with 100% of foreign investment which have no managerial board. Article 14.- During the process of realization of the reconciliation plan and the measures of reorganizing the business operations, the debtor business has the responsibility to: 1. Carry out the reconciliation program and the measures of reorganizing the operations of the business according to the committed schedule and plan; 2. To make periodical or emergency reports at the request of the Judge in charge of settling the request for declaration of business bankruptcy (hereafter referred to as Judge) and the creditor on the situation and the result of the implementation of the reconciliation program and the solution of reorganizing the operation of the business; 3. Propose the Court to declare bankruptcy if it is deemed that the reconciliation program and the solution of reorganizing the operations of the business are irrealizable. VIII. ON THE BANKRUPTCY DUE TO A FORCE MAJEURE. Article 15.- A business which is bankrupted for reason of force majeure is one which is bankrupted due to natural calamities, enemy sabotage or a fire not caused by itself or due to the direct impact of the bankruptcy of other businesses, of which the owners or the managers could not foresee or have seen but could not overcome even though they have taken every necessary measure. Article 16.- The bankruptcy on account of force majeure must be clearly stated in the decision to declare the bankruptcy of the business. The President and members of the Management Council, the Managerial Board, or the Director or General Director of a business which is declared bankrupt due to force majeure, may retain their posts at the other businesses as stipulated at Article 50 of the Law on Business Bankruptcy. IX. ON THE ORGANIZATION AND OPERATION OF THE PROPERTY MANAGEMENT TEAM Article 17.- Before issuing the decision to open the procedures to settle the request for declaration of bankruptcy of the business, the President of the Economic Tribunal of the People�s Court at the provincial level shall request the concerned agencies to appoint persons who are qualified and who are economically and legally independent from the creditors and the debtor business to join the Property Management Team. The Property management Team shall comprise: a/ An official of the Economic Tribunal of the People�s Court at provincial level appointed by the President of the Economic Tribunal of the People s Court at provincial level, Head of the Team. b/ An executive member of the Lawsuit Enforcement Section to be appointed by the Head of the Section of the Justice Service. c/ The creditor who has the largest credit at the business; in case there are many creditors with the same amount of credit at the business, the President of the Economic Tribunal of the People�s Court at provincial shall appoint a creditor until the debtors conference appoint their representative. d/ A representative of the debtor business appointed by the legal representative of the business, the owner of the private business or the owner of a business with 100% of foreign investment where there is no managerial board; e/ A representative of the trade union at the business; f/ A representative of the Finance Service appointed by the Director of the Finance Service; g/ A representative of the State bank at provincial level appointed by the Director of the bank; 2. Depending on each concrete case, the President of the Economic Tribunal of the People�s Court at provincial level may invite a number of experts to take part in the Property Management Team. 3. One person may be appointed to take p art in three teams at most. The appointee may refuse the appointment if he can cite a plausible reason. 4. The Property Management Team works under the direction of the team Head and the supervision of the Judge. Article 18.- The debtors conference is entitled to choose its own representative to take part in the Property management Team in the place of the person appointed by the President of the Economic Tribunal. The latter may refuse to accept this choice of the debtors conference if he can cite a plausible reason. In this case, 15 (fifteen) days at the latest after receipt of the notice of non-acceptance from the President of the Economic Tribunal, the debtors conference must choose another representative. The President of the People�s Court at the provincial level has the final say on all complaints and protests related to the choice of the representative of the debtors to take part in the Property Management Team. Article 19.- 1. The Property Management Team has the duty to supervise and control the operation of the business right fro

Nghị định 189-CP