2020 Tilleke & Gibbins International Ltd.
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CAMBODIA
JURISDICTION: CAMBODIA
Jay Cohen [email protected] With thanks to international intern Cassandra Allen
The Bankruptcy System in Cambodia
The bankruptcy system in Cambodia is governed by the 2007 Insolvency Law, which applies to all businesses (including natural persons operating sole proprietorships).
Welcome to the fifth edition of Baker & McKenzie's quarterly Asia Pacific Financial Services & Regulatory Newsletter.
The High Court has sanctioned a scheme of arrangement between a Vietnamese company and certain of its creditors; the first time a Vietnamese company has taken advantage of this restructuring process in England.
Background
On 8 October 2013, the Supreme Court of Vietnam released the most recent draft of the new Law on Bankruptcy ("Draft Bankruptcy Law"). The Draft Bankruptcy Law is now open for comments and, once passed by the National Assembly, will replace the current Law on Bankruptcy 2004 ("Current Bankruptcy Law").
The Draft Bankruptcy Law appears generally to be a positive step in Vietnam's efforts to improve the efficiency of the bankruptcy process and efforts to enhance the credibility of the legal framework for restructuring.
Conduct of Bankruptcy Proceedings
On 26 June 2015, Vietnam loosened foreign ownership limits (FOL) in public companies by the adoption of Decree 60/2015 (Decree 60).
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:
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;
On June 12, 2018, the Ministry of Justice, the Supreme People’s Procuracy, and the Supreme People’s Court of Vietnam issued Joint Circular No. 07/2018/TTLT-BTP-VKSNDTC-TANDTC, on coordination in the enforcement of court decisions on bankruptcy. Joint Circular 07 comes into force on August 1, 2018.
The Prime Minister of Vietnam recently issued Decision No. 242, approving Vietnam's Restructuring Plan of the insurance business market until 2020, oriented towards 2025 (Plan) following the final proposal of the Ministry of Finance (MOF)'s Insurance Supervisory Authority of Vietnam.1
Most people think that bankruptcy is bad and try to avoid it. However, bankruptcy is a powerful legal tool and if using it the right way, it can solve your problems, whether you are a creditor or a debtor.
If you are a creditor, why should you file for bankruptcy?