Laws of Vietnam

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

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

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.

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.

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.

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

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

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 from the moment it is decided to open procedures to settle the request for declaration of bankruptcy till the moment bankruptcy is declared Concretely speaking:

a/ To supervise and control the implementation of the stipulations at Item 2 of Article 18 and Article 23 of the Law on Business Bankruptcy;

b/ To control and supervise the signing and implementation of the contracts signed by the business;

c/ To supervise and control the marketing of products of the business.

2. The Head of the Property Management Team is entitled to ask the Judge to issue a decision compelling the business to carry out or not to carry out a number of acts aimed at preserving the property of the business.

Article 20.- Within 15 (fifteen) days after the expiry of the time-limit for sending the debt claiming notice, the Property Management Team must complete drawing up the inventory of the whole property, the property balance sheet and the list of the creditors and the list of the debtors of the business.

1. The inventory of property and the property balance sheet must specify each type of property. If the property is in kind, the object must be named, have a description of its state and must be priced.

2. The list of the creditors and the list of the debtors must include the following main points:

a/ Names and addresses of the creditors and the debtors of the business;

b/ The amount of debt owed to each creditor and of each debtor owed to the business. These must be specified whether it is a guaranteed, partly guaranteed or unguaranteed debt, whether it is a due or undue debt. With regard to the list of the debtors of the business, there must be specified whether these are recoverable or unrecoverable debts.

Article 21.-

1. The Property Management Team shall have to post up the list of creditors and the list of the debtors of the business at the office and the branch offices of the business and the office of the Court in charge of settling the bankruptcy of businesses;

2. 10 (ten) days after the posting up, the Property management Team has the duty to modify or complement the lists the creditors and debtors according to the decision of the Judge and close these lists.

Article 22.- After drawing up the inventory of properties stated at Article 20 of this Decree, the Property Management Team shall compare the existing property with the total debt the business is due to pay, and draw up the plan to divide the property as well as the plan for debt payment for the Judge to consider and decide.

Article 23.- From the moment the Court issues the decision to declare bankruptcy, the business shall lose the right to manage the property. The Property Management Team shall take over the preservation of the property of the business until completion of the hand over to the Property Liquidation Team.

Article 24.- 5 (five) days at the latest after the issue of the decision to found the property Liquidation Team, the Property Management Team shall have to hand over the whole property, documents and papers under its management to the Property Liquidation Team.

Article 25.- The Head and members of the Property Management Team are liable to disciplinary actions or shall be investigated for penal liability, depending on the character and extent of the violations if they commit the following violations, and shall have to pay compensations if they cause material damage:

1. Drawing up the property inventory which does not correspond with reality;

2. Drawing up the lists of creditors and debtors not compatible with reality.

3. Failing to carry out or carry out inadequately its duty of supervising and controlling the management of the property of the business.

4. Causing losses of property to the debtor business.

X. ON THE ORGANIZATION AND OPERATION OF THE PROPERTY LIQUIDATION TEAM

Article 26.- 5 (five) days at the latest after receipt of the decision on declaration of bankruptcy, the Head of the Lawsuit Enforcement Section shall have to issue the decision to carry out the decision on declaration of bankruptcy.

Article 27.- 10 (ten) days at the latest after the issue of the decision to carry out the decision on declaration of bankruptcy, the Head of the Lawsuit Enforcement Section shall have to issue a decision to set up the Property Liquidation Team. The decision must clearly specify the names, occupations, positions and the offices of the Head, the Deputy Head and other members of the Team, the specific task of each member including the accountant, cashier and store-keeper.

Article 28.- The Property Liquidation Team is composed of:

a/ Executive members are the Head of the Property Liquidation Team and a member of the Lawsuit Enforcement Section (under the Justice Service) appointed by the Head of the Section;

b/ A representative of the Finance Service designated by the Director of the Finance Service;

c/ A representative of the State bank at provincial level appointed by the Bank Director;

d/ A representative of the creditors who has been member of the Property Management Team if no request of replacement is made by the majority of the creditors;

e/ A representative of the trade union of the business;

f/ A representative of the bankrupt business appointed by the legal representative of this business, or the owner of the private business, or the owner of the business with 100% of foreign investment where there is no managerial board.

In case of necessity, the Head of the Property Liquidation Team may invite a number of officials to take part in the activities related to the liquidation of property.

Article 29.- At the founding of the Property Liquidation Team, the Head of the Lawsuit Enforcement Section is entitled to:

1. Request the concerned agencies to appoint a replacement if he deems that the appointee may not be objective or not qualified to fulfill his task. Within 5 (five) days at the latest after the request is made by the Head of the Lawsuit Enforcement Section, the concerned agencies must send their replacements.

2. Settle the request of the creditors about the replacement of the representative of the creditors to the Property Liquidation Team, if he deems that the request of the creditors is aimed ensuring the objectivity in carrying out the task of the Property Liquidation Team;

3. The Director of the Justice Service shall have the final say about all complaints in the replacement of members of the Property Liquidation Team.

Article 30.- The Property Liquidation Team has to operate according to the plan already approved by the Head of the Lawsuit Enforcement Section. It must periodically report the progress and the situation in the implementation of the decision on declaration of bankruptcy to the Head of the Lawsuit Enforcement Section. The Property Liquidation Team shall use the seal of the Lawsuit Enforcement Section in discharging its duty.

Article 31.- The procedures of handling over the property of the Property Management Team to the Property Liquidation Team is defined as follows:

To hand over the whole as well as each detail of the property of the bankrupt business.

To write the minutes of the hand-over of the whole as well as each detail of the property. In case of losses or damage of property, there must be separate minutes for each concrete case and also the reason, and the personal responsibility for the losses and damage. All minutes of property hand-over must bear the signature of the Judge, the Head of the Property Management Team and the Head of the Property Liquidation Team.

From the date of taking delivery, the Property Liquidation Team has the responsibility to preserve all the property and documents and related documents and papers.

Article 32.-

1. The Head of the Property Liquidation Team is entitled to propose that the Judge issue a decision to recover the property of the bankrupt business under the management of another person. When recovering the property, the Head of the Property Liquidation Team shall have to make public the decision on declaration of bankruptcy and the decision on implementation of this decision.

2. If he discovers any property of the bankrupt business which is illegally appropriated and which is not yet handed over by the Property Management Team, the Head of the Property Liquidation Team is entitled to propose that the Judge issue a decision to retrieve it according to the procedure stipulated at Item 1 of this Article. At the same time it must draw up the minutes on the inventory and certification of the real situation and make additions to the property of the bankrupt business with a view to a common solution.

3. The Head of the Property Liquidation Team may request the related State agencies to help in the recovery of the property.

4. The recovery of the property of the bankrupt business stipulated at Article 45 of the Law on Business Bankruptcy shall be carried out by decision of the Court.

Article 33.-

1. The Head of the Lawsuit Enforcement Section shall have to set up the Bankrupt Business Property Evaluation Council. The Council shall comprise:

a/ The Head of the Property Liquidation Team as President of the Council.

b/ A representative of the Finance Service designated by the Director of the Finance Service;

c/ Representatives of a number of related agencies proposed by the Head of the Lawsuit Enforcement Section and appointed by each of these agencies.

d/ 6 (six) months before enrolling the request for declaration of bankruptcy of the business, the Head of the Lawsuit Enforcement Section shall invite the creditors with guaranteed property, the individuals or the representatives of the units which have bought the property of the bankrupt business, to join the Council when evaluating these properties.

e/ The representative of the creditors, the representative of the trade union or the representative of the laborers are entitled to make suggestions to the evaluation of the property but they are not entitled to vote.

2. The Evaluation Council has the following tasks and powers:

a/ To evaluate the whole property before putting it to auction;

b/ To evaluate the properties which have been guarantees of debts and of the properties which the business has sold 6(six) months before enrolling the request for declaration of bankruptcy;

3. The Evaluation Council shall decide by majority vote; in case of parity of votes, the President of the Council shall have the final say.

Article 34.-

1. The Head of the Property Liquidation Team has the duty to organize the auction of the properties of the bankrupt business. The auction shall have to comply with the provisions of the Ordinance on the Execution of Civil Lawsuits, the legal documents guiding the implementation of this Ordinance and must be announced on the dailies at the center and the locality in three consecutive issues, at least 15 (fifteen) days before the auction takes place.

2. The sale of banned properties or properties subjected to restricted circulation on the market must comply with related regulations of the State.

Article 35.-

1. The Head of the Property Liquidation Team must open a bankruptcy account at the bank 5 (five) days at the latest after the issue of the decision to set up the Property Liquidation Team. He shall be the owner of the bankruptcy account.

2. All the money recovered from the property of the bankrupt business must be deposited in the bankruptcy account 3 (three) days at the latest after recovery. Any delay shall be subject to fines at the highest interest loan rate announced by the State Bank for each period in the lending relations between the commercial banks and the various economic organizations.

Article 36.-

1. The distribution of the remaining value of the property of the bankrupt business to the creditors must abide by the plan already drawn up in the decision on declaration of bankruptcy and follow the order of priority stipulated at Article 39 of the Law on Bankruptcy of Businesses.

2. The Head of the Property Liquidation Team shall have to draw up the concrete plan for each phase and report to the Head of the Lawsuit Enforcement Section for decision before the distribution actually takes place.

3. If the creditor has his account at the bank, the Head of the Property Liquidation Team shall fill the procedures to transfer the money to this account of the creditor. It the creditor has no account at the bank, the Head of the Property Liquidation Team shall notify the creditor so that he can come to receive the money personally or send by post to him. The postal fee shall be deducted from the money which is the creditor's due.

Article 37.-

1. 7 (seven) days after full liquidation of the bankrupt property, the Head of the Property Liquidation Team shall make a written report on the implementation of the decision on declaration of bankruptcy. This report shall be sent to the Head of the Lawsuit Enforcement Section and posted up at a public place in the office of the Lawsuit Enforcement Section.

2. 15 (fifteen) days at the latest after the report on the implementation of the Lawsuit is posted up, if no creditor makes any complaint, the head of the Lawsuit Enforcement Section shall issue a decision to end the implementation of the decision on declaration of bankruptcy and also to end the activities of the Property Liquidation Team.

3. The Head of the Lawsuit Enforcement Section shall send a report on the implementation of the decision on declaration of bankruptcy to the Court which has settled the bankruptcy, the Department Managing the Implementation of Civil Lawsuits under the Ministry of Justice and the agency which has issued the business license so as to write off the name of the business. If the bankrupt business is a State-owned business or a business of political and social organizations, the report must also be sent to the agencies or organizations which have issued the decision to set up the business and the financial agency of the same level.

Article 38.- If the Head of the Lawsuit Enforcement Section delays the issue of the decision on implementation of the decision on declaration of bankruptcy, or the decision to set up the Property Liquidation Team and other decision to set up the Property Liquidation Team and other decisions under his jurisdiction, or who makes improper decisions, he shall, depending on the character and extent of his violation, be disciplined or investigated for penal liability. He shall has to pay compensations if the violation causes material damage.

Article 39.- The Head and members of the Property Liquidation Team who commit the following violations shall, depending on the character and extent of the violation, be disciplined or investigated for penal liability and shall have to pay compensations if he causes material damage:

1. Deliberately enter in the inventory of the bankrupt business property which does not belong to the ownership of the bankrupt business or which can't be inventorized, leave out what should be inventorized or inventorize not according to the procedures prescribed by law;

2. Set up the Evaluation Council and organize the auction not according to the prescribed procedures;

3. Fail to carry out fully the measures for preserving the property or take actions resulting in the loss or damage to the property;

4. Carry out the distribution of property not according to the plan of liquidation already approved by the Head of the Lawsuit Enforcement Election;

5. Make illegal use of the property of the bankrupt business;

6. Make untruthful report on the implementation of the decision on declaration of bankruptcy.

Article 40.-

1. The decisions of the Head of the Lawsuit Enforcement Section, of the Head of the Property Liquidation Team are mandatory to all concerned individuals and organizations.

2. Those who deliberately refuse to carry out the decision of the Head of the Lawsuit Enforcement Section, the Head of the Property Liquidation team shall, depending on the character and extent of the violation, be disciplined, received administrative sanction or be investigated for penal liability and shall have to pay compensations if they cause material damage.

XI. ON EXPENDITURES IN SETTLING THE BANKRUPTCY

Article 41.-

1. The expenditures in settling the bankruptcy include:

a/ Court fees in settling the bankruptcy to be decided by the Court according to the prescriptions of law on fees;

b/ Expenditures in making the inventory, transportation, recovery, expertise, preservation and auctioning of the property; expenditures in convening and holding the creditors' conference (excluding the cost of traveling and accommodation of the creditors) shall be defrayed according to the bill approved by the Judge in charge of the settlement of the bankrupt lawsuit. The expenditures related to the implementation of the decision of the Court in the process of settling the bankruptcy shall be defrayed on the basis of the decision of the Head of the Lawsuit Enforcement Section;

c/ The daily allowance for each member of the Property Management Team, the Property Liquidation Team, the Evaluation Council and the persons taking part in the enforcement of the decisions of the Court in the process of settling the bankruptcy shall be equal to a day's allowance for a travelling work-day prescribed by the State.

2. The fees and other expenditures stipulated at Item 1 of this Article shall be deducted from the value of the property of the bankrupt business.

XII. IMPLEMENTATION PROVISIONS

Article 42.- The Minister of Justice, after consulting the Supreme People's Court, shall provide detailed guidance on the working statute of the Property Management Team and the Property Liquidation Team.

Article 43.- This Decree takes effect as from the date of its signing.

Article 44.- The minister, the heads of the ministerial-level agencies, the agencies attached to the Government, the presidents of the People's Committees in provinces and cities directly under the Government have the responsibility to implement this Decree.

For the Government

Prime Minister

VO VAN KIET