Currently, the law does not have specific provisions related to the handling of abscond enterprises. In fact, the situation of businesses running away, especially when still owing taxes, labor wages, debts to other businesses, has been happening quite commonly. In the following article, with his working experience, TNTP’s lawyer will give an opinion on how to collect debts for “abscond enterprises”.
1. Legal provisions governing absconded enterprises
Currently, only the Joint Circular 06/2009/TTLT-BLDTBXH-BTC dated February 27, 2009 of the Ministry of Labor, War Invalids and Social Affairs and the Ministry of Finance jointly guide the implementation of Decision No. 30/2009/QD-TTg dated February 23, 2009 of the Prime Minister on support for laborers who are laid off by enterprises facing difficulties caused by economic decline to Regarding the aspect of runaway enterprises, the following applies : Enterprises whose owners abscond in 2009 are those without lawful representatives to protect the interests of laborers, which are identified by provincial-level People’s Committees or agencies authorized by provincial-level People’s Committees.
Therefore, it can be seen that the current legal provisions do not have specific provisions on “Fugitive enterprises”. Currently, there is no legal document regulating absconding business owners, from the concept to the process of organizing asset liquidation, how to solve the policy regime for employees, as well as the payment of debts related to Social Insurance, Health Insurance, etc debts to other organizations and individuals.
2. Recovery of corporate debts by through Lawsuits
When collecting debts from abscond enterprises, contacting to negotiate to pay debts is often difficult. Therefore, readers can consider the possibility of filing a debt recovery petition at the competent authorities, such as the Arbitration Centre or the Court. This process depends on the choice in the contract or agreement between the parties, in case the parties do not have an Arbitration agreement, the Court will be the place to settle the dispute.
Readers should determine that the court has jurisdiction to deal with it in accordance with the Code of Civil Procedure. For cases where the place of residence or work of the business is unknown, readers may file a petition in the Court where the respondent resided, worked or had property for the last time.
In cases where the debtor does not cooperate or absconds, the plan to initiate a lawsuit to recover the debt will be effective when it can be resolved by the competent authority. However, to ensure a higher probability of success, readers can consider using debt collection support services from law firms or professional lawyers to ensure the protection of their legal rights and interests to the maximum extent.
After the judgment in the Court takes legal effect, if the executed person is not present in residence or absconding, the creditor may file a petition for execution with the competent executing authority. At that time, this agency will take necessary measures to ensure the execution of judgments such as enforcement and disposition of assets to ensure the execution of judgments.
3. Nộp đơn yêu cầu mở thủ tục phá sản/ Submit written requests for initiation of the bankruptcy process
In case of expiry of 03 months from the due date of the debt but the debtor fails to fulfill its payment obligations, an unsecured creditor or partially secured creditor may apply to a competent court to request the opening of bankruptcy proceedings for such enterprise. The essence of filing a petition for opening bankruptcy proceedings for a debtor enterprise is that the competent authority shall conduct a review of the bankruptcy procedure request dossier to decide on the liquidation of the debtor’s assets if the debtor is no longer able to pay the debt. At that time, creditors will be prioritized to pay the value of the debtor’s liquidated assets.
The bankruptcy process involves the asset management-liquidation team and the Court. However, unlike civil disputes in Court when only the parties involved are creditors and debtors. Bankruptcy procedure: This is a procedure for collective debt repayment, liquidated assets are paid to creditors in the following order:
• When the judge gives the Decision on the declaration of bankruptcy, the assets of the insolvent entity shall be redistributed in the following sequence:
Cost of bankruptcy.
The unpaid salaries, severance pay, social insurance and medical insurance to employees, other benefits according to the labor contracts and collective bargaining agreements.
Debts incurred after the initiation of bankruptcy which are used for resuming the business operation.
Financial obligations to the Government; unsecured debts payable to the creditors on the list of creditors; secured debts which are not paid because the value of collateral is not enough to cover such debts.
If the value of the assets of the insolvent entity is not enough to make the payment, the entities given the same priority shall be paid in proportion to the debt.
Above is an article on the topic “How to collect debts for abscond enterprises” of TNTP, hope that this article will be useful to readers.