Law No. 47/2010/QH12 on credit institutions has been amended pursuant to Law No. 17/2017/QH14 (“Amended Law”) passed by the National Assembly. The Amended Law came into effect on 15 January 2018.

The Amended Law provides grounds for special control by the State Bank of Vietnam (“SBV”) against underperforming credit institutions which:

• have failed to maintain liquidity requirements;

• have accumulated losses exceeding 50% of the charter capital and reserve funds as recorded in the latest audited financial statements;

Summary

Bankruptcy in Vietnam applies to enterprises (including foreign invested enterprises), co operatives and co operative unions (hereafter collectively referred to as enterprises). Unlike certain countries, this does not apply to individuals.

Bankruptcy Law

Bankruptcy procedures are governed by the Law on Bankruptcy No. 51/2014/QH13 which came into effect on 1 January 2015:

InGrayson Consulting, Inc. v. Wachovia Securities, LLC (In re Derivium Capital LLC), 716 F.3d 355 (4th Cir. 2013), the U.S. Court of Appeals for the Fourth Circuit examined whether certain securities transferred and payments made during the course of a Ponzi scheme could be avoided as fraudulent transfers under sections 544 and 548 of the Bankruptcy Code. The court upheld a judgment denying avoidance of pre-bankruptcy transfers of securities because the debtor did not have an “interest” in the securities at the time of the transfers.

On January 10, 2012, a Florida bankruptcy court ruled in In re Pearlman, 462 B.R. 849 (Bankr. M.D. Fla. 2012), that substantive consolidation is purely a bankruptcy remedy and that it accordingly did not have the power to consolidate the estate of a debtor in bankruptcy with the assets and affairs of a nondebtor. In so ruling, the court staked out a position on a contentious issue that has created a widening rift among bankruptcy and appellate courts regarding the scope of a bankruptcy court’s jurisdiction over nondebtor entities.