How the laws of Vietnam regulate the role of Asset Management Officers in bankruptcy cases?

 Date: 25 August 2021

Writers: Huy Nguyen

The bankruptcy process is not only a tool for enterprises when they are insolvent to tackle a difficult situation but also a tool to find ways to settle debts for creditors. In the bankruptcy case, an important participant in the bankruptcy settlement process is the asset management officer(s) (“AMO”). So, who is AMO and what role does AMO play in the bankruptcy settlement process? To answer the above questions, BLawyers Vietnam would like to present the article below.

bankruptcy

1. AMO definition

According to Law on Bankruptcy 2014 (“LOB”), AMO is an individual specializing in the management and liquidation of the assets of an insolvent entity during the process of a bankruptcy settlement.

It can be understood that AMO has an intermediary role in a bankruptcy case with the purpose of assets management, business activities supervision, and assets liquidation of an insolvent enterprise starting from the time of being appointed by a judge and ending when the bailiff fully implement the Decision on the declaration of bankruptcy.

2. Requirements for working as AMO

An individual practicing as AMO is required to have the practice certificate of AMO. This certificate is considered and granted by the Ministry of Justice to those who are lawyers, auditors, or persons having a bachelor degree in law, economy, accountancy, or bank and 5 years of experience or more in his/her field on the basis of submitting applications for issuing the practice certificate of AMOs. In addition, these individuals are also required to be capable of civil acts, have ethical qualities, a sense of responsibility, integrity, and objectivity.

3. The role of AMO in bankruptcy cases

To contribute to facilitating the process of bankruptcy cases being resolved more quickly, accurately, and proficiently, the participation of AMO is indispensable. The role of these subjects is provided in the LOB. Accordingly, when participating in the bankruptcy settlement process, the AMO has the following specific roles:

a. Firstly, managing and supervising the business operation and asset liquidation of the insolvent entities as follows:
  1. Collecting, verifying, and managing the documents and evidence related to the business operation of the entities;
  2. Drawing up lists of assets, creditors, and debtors;
  3. Preserving assets; preventing from selling and/or giving assets without the permission of the Judge; preventing from dispersing and hiding assets; maximizing the value of the entities’ asset on selling and/or liquidating;
  4. Supervising the business operation of the entities according to the regulations of laws;
  5. Hiring an individual or an organization according to the regulations of laws;
  6. Advising the Judge on selling the entities’ assets in order to cover the cost of bankruptcy;
  7. Selling the entities’ assets in accordance with the Judge’s decision in order to cover the cost of bankruptcy;
  8. Valuating and liquidating assets according to the regulations of LOB; sending reports to civil execution authorities and notifications to involving entities on the asset liquidation of an appointed individual or organization;
  9. Sending the collected money to the bank accounts held by the People’s Court or civil execution authorities.
b. Secondly, representing the insolvent entity if the entity does not have any legal representative;
c. Thirdly, making a report on assets, debts, and the operation of the enterprise or cooperative participating in making a plan for recovering the business operation of the insolvent entity;
d. Fourthly, advising the Judge to do the followings:
  1. Collect evidence or documents;
  2. Declaring that a transaction is invalid and taking back the entities’ assets which are illegally sold or given;
  3. Applying temporary emergency measures; imposing administrative penalties; handling dossier to competent authorities for imposing criminal penalties according to the regulations of laws.

Should you have any questions about the above contents, please revert to BLawyers Vietnam at consult@blawyersvn.com. We are more than happy to hear from you!

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