The Role of Bankruptcy Administrators in Bankruptcy Proceedings
Explore the important role and diverse responsibilities of bankruptcy administrators in the process of handling corporate bankruptcy according to the Bankruptcy Law of 2014 and Decree 22/2015.
In the initial stage, the Insolvency Practitioner has the responsibility of receiving and reviewing the bankruptcy filing request. They must ensure the completeness and validity of the file according to legal requirements. This is a crucial step to determine whether a business meets the conditions to initiate the bankruptcy process.
After reviewing the file, the Insolvency Practitioner will conduct a preliminary assessment of the business's ability to recover its operations. This requires a thorough evaluation of the company's current financial situation and business activities.
1
File Intake
The Insolvency Practitioner receives and verifies the completeness and validity of the bankruptcy filing request.
2
Preliminary Assessment
Evaluate the business's ability to recover its operations based on its financial situation and activities.
3
Recommendation to Open Proceedings
If the conditions are met, the Insolvency Practitioner will recommend the Court to open bankruptcy proceedings for the business.
Public Announcement on Bankruptcy Proceedings
After the court decides to initiate bankruptcy proceedings, the Trustee is responsible for publicly announcing this. The announcement must be posted on the national bankruptcy information portal, ensuring transparency and wide public access.
Additionally, the announcement must be published in at least one national newspaper. This is to ensure that the information is widely disseminated, allowing relevant parties, especially creditors, to stay informed in a timely manner about the company's bankruptcy status.
Media
Publish the announcement in at least one national newspaper.
Information Portal
Post on the national bankruptcy information portal.
Public Disclosure
Ensure the information is widely disseminated to the public.
Asset Takeover and Inventory
In the asset management and preservation stage, the first task of the Trustee is to take over all the assets of the bankrupt company. This process includes sealing important assets to ensure they are not moved or altered illegally.
After taking over, the Trustee must conduct a detailed inventory of all assets. They will prepare an inventory report, recording full information about the quantity, quality, and estimated value of each type of asset. This process requires high levels of care and accuracy to ensure that no assets of the company are overlooked.
Takeover
The Trustee assumes control over all the assets of the bankrupt company.
Sealing
Seal important assets to protect and prevent illegal movement.
Inventory
Conduct a detailed inventory, prepare a report recording full information about the quantity, quality, and value of the assets.
Asset Management and Preservation
After taking over and conducting an inventory, the Trustee is responsible for managing and preserving the assets of the bankrupt company. This task requires a high level of care and professionalism, in order to maintain and even increase the value of the assets during the bankruptcy process.
The Trustee must ensure that the assets are properly stored and protected from damage or loss. They also need to take necessary measures to maintain the business operations of the company if possible, in order to preserve the value of the assets and increase the ability to recover debts for the creditors.
Asset Preservation
Implement necessary measures to protect the assets from damage, loss, or depreciation.
Maintaining Operations
If possible, maintain the business operations of the company to preserve the value of the assets.
Optimizing Value
Seek opportunities to increase the value of the assets, enhancing the ability to recover debts for the creditors.
Opening Separate Accounting Books
Another important task of the Insolvency Administrator is to open separate accounting books to track the income, expenses, debts, and credits that arise during the bankruptcy process. This ensures transparency and accuracy in the financial management of the company undergoing bankruptcy.
These accounting books must be regularly and thoroughly updated, recording all financial transactions related to the bankruptcy process. This not only helps the Insolvency Administrator accurately understand the current financial situation of the company, but also provides a basis for reporting and explaining to the Court and creditors.
Purpose of opening separate accounting books
Accurately track income and expenses incurred
Record any new debts (if any)
Ensure transparency in financial management
Provide a basis for reporting and explanation
Content to be recorded in the accounting books
Income from asset liquidation
Expenses incurred during the bankruptcy process
Any new debts (if any) and debt repayment
Remaining asset value of the company
Notice to Creditors
During the process of determining the debts, the first task of the Trustee is to publicly notify the creditors about the opening of the bankruptcy proceedings. This notice must be sent to all known creditors of the company, and must also be widely published to ensure that unknown creditors can also access the information.
The content of the notice should include information about the decision to open the bankruptcy proceedings, the deadline and method for registering debts, as well as the rights and obligations of the creditors during the bankruptcy process. Timely and complete notification is very important to ensure the rights of the creditors and fairness in the bankruptcy process.
1
Compile the List
Compile a list of the known creditors of the company.
2
Send the Notice
Send the notice directly to the creditors on the list.
3
Publish Widely
Publicly post the notice in various media outlets.
4
Provide Instructions
Provide information on how and when to register the debt.
Receiving and Verifying Debt
After notifying the creditors, the Trustee is responsible for receiving debt registration from the creditors. This process requires care and attention to detail, as each debt must be thoroughly reviewed to ensure its legality and accuracy.
The Trustee must verify the legality of each registered debt. This includes verifying the origin of the debt, the validity of the related documents, and the compliance with current legal regulations. After verification, the Trustee will determine the exact value of each debt, which will serve as the basis for the creditor list and the subsequent distribution of assets.
Creditor List
After completing the process of receiving and verifying the debt, the Trustee has the responsibility of preparing a list of creditors who have the right to request debt repayment. This list is an important document, serving as the basis for the distribution of assets and the resolution of the creditors' rights during the bankruptcy process.
The creditor list should include detailed information about each creditor, including their name, contact address, the verified amount of debt, and the order of payment priority (if any). The Trustee also needs to classify the debts according to their nature and the level of payment priority as stipulated by law. This list will be made public to the relevant parties and may be adjusted if there are valid complaints.
1
Creditor Information
Record the full name, address, and contact information of each creditor.
2
Debt Value
Accurately determine the verified amount of debt for each creditor.
3
Debt Classification
Classify the debts according to their nature and level of payment priority.
4
List Disclosure
Publicly disclose the creditor list to the relevant parties and handle any complaints (if any).
Developing a Plan for Asset Liquidation
In the asset liquidation phase, the first task of the Trustee is to develop a plan for asset liquidation. This is an important step that requires careful consideration to maximize the recovery value of the bankrupt company's assets.
The Trustee needs to consider many factors when developing the plan, including the type of assets, market conditions, and the ability to attract buyers. They must select the appropriate liquidation method for each type of asset, which could be auction, direct negotiation, or a combination of methods. The liquidation plan should be presented in detail, including an asset inventory, starting prices, and the implementation process.
Asset Evaluation
Accurately determine the value and condition of each asset to be liquidated.
Method Selection
Decide on the appropriate liquidation method: auction, negotiation, or a combination.
Detailed Planning
Develop a specific liquidation plan, including timeline, location, and implementation process.
Organization of Asset Liquidation
After the asset liquidation plan has been approved, the Trustee is responsible for organizing the implementation of the liquidation. This is an important stage that requires high professionalism and transparency to ensure the interests of all stakeholders.
If the auction method is chosen, the Trustee needs to work with professional auction units to organize a public auction. In the case of direct negotiation, they must ensure that the negotiation and transaction process is fair and transparent. Throughout this process, the Trustee must closely monitor to ensure compliance with legal regulations and achieve the best value for the assets.
1
Preparation
Complete the legal procedures and prepare the assets for liquidation.
2
Advertising
Widely announce the asset liquidation to attract potential buyers.
3
Implementation
Organize the auction or carry out the direct negotiation sale.
4
Completion
Handle the post-sale procedures, including asset transfer and money collection.
Distribution of Liquidation Proceeds
After completing the asset liquidation process, the Trustee has the important task of developing a plan for distributing the proceeds to the creditors. This process requires fairness and strict adherence to the legal order of priority for payments.
The Trustee must carefully review the verified and classified list of creditors. They need to accurately calculate the amount to be distributed to each creditor based on the total proceeds from the liquidation and the statutory order of priority for payments. This distribution plan will then be submitted to the Court for review and approval before implementation.
Data Compilation
Accurately compile the total amount received from the asset liquidation.
Determine Order of Priority
Apply the legal order of priority for payments.
Calculate Distribution
Calculate the specific amount to be distributed to each creditor.
Submit for Approval
Submit the distribution plan to the Court for review and approval.
Periodic Report
Throughout the bankruptcy process, the Trustee is responsible for periodically reporting to the Court and creditors on the status of the case. This report plays a crucial role in ensuring the transparency and accountability of the Trustee.
The report should include detailed information on the progress of the case, the current financial situation of the business, the results of asset liquidation (if any), and any issues that have arisen during the execution of the duties. The Trustee should also clearly state the difficulties and challenges encountered, and propose solutions. The report must be prepared in a professional, accurate, and timely manner.
Key contents of the periodic report
Progress of the bankruptcy case
Current financial situation of the business
Results of asset liquidation (if any)
Issues that have arisen and proposed solutions
Action plan for the next phase
Reporting frequency
Monthly report to the Court
Quarterly report to creditors
Ad-hoc report in case of important events
Contact Support
If you need more information or support, please contact us at support@nghiepvuquantaivien.com. Our team of experts will be ready to answer any questions and assist you in the process of carrying out procedures related to the duties of a trustee.