New regulations for bankruptcy asset caretakers in the third draft ofthe Law on Bankruptcy were discussed in Hanoi on December 17 by theInternational Finance Corporation and the Vietnam Business Forum.
According to the drafting committee, under the current law the membersof an asset liquidation team held multiple tasks at the same time andwere ineffective in overseeing bankruptcy assets.
"The ineffectiveness is because there are too many parties on the team,plus they have limited knowledge, mostly having few skills in statisticsand liquidation," stated Nguyen Thi Dieu Hong from the Vietnam Chamberof Commerce and Industry's legislation committee.
This is the first time the concepts of a bankruptcy asset caretaker havebeen put into the law, replacing the asset liquidation team. The draftadded Article 12, stating that an asset caretaker is defined as a lawyerchosen by the court.
However, KPMG's director ofrestructuring services Phil Smith recommended the expansion ofconditions for the asset caretaker, such as being a qualifiedaccountant.
In many places around the world,professionals in practicing bankruptcy were normally those in the legaland accounting industries, said Smith.
The draftalso regulates that an asset caretaker has the responsibility of helpingbusinesses restructure. Therefore, he must have considerable knowledgeand experience in corporate governance.
In addition,the Vietnam International Law Firm said that other legal documents didnot define how a lawyer could perform the jobs of an asset caretaker.The drafting committee should consider carefully not creating conflictsbetween the Law on Bankruptcy and the Law on Lawyers.
Enterprises and creditors can negotiate about the filing forbankruptcy is the content of a new provision that is not included by thecurrent law.
According to the law firm, this wouldallow the parties to agree on a solution to handle debts withoutjeopardising business operations.-VNA
According to the drafting committee, under the current law the membersof an asset liquidation team held multiple tasks at the same time andwere ineffective in overseeing bankruptcy assets.
"The ineffectiveness is because there are too many parties on the team,plus they have limited knowledge, mostly having few skills in statisticsand liquidation," stated Nguyen Thi Dieu Hong from the Vietnam Chamberof Commerce and Industry's legislation committee.
This is the first time the concepts of a bankruptcy asset caretaker havebeen put into the law, replacing the asset liquidation team. The draftadded Article 12, stating that an asset caretaker is defined as a lawyerchosen by the court.
However, KPMG's director ofrestructuring services Phil Smith recommended the expansion ofconditions for the asset caretaker, such as being a qualifiedaccountant.
In many places around the world,professionals in practicing bankruptcy were normally those in the legaland accounting industries, said Smith.
The draftalso regulates that an asset caretaker has the responsibility of helpingbusinesses restructure. Therefore, he must have considerable knowledgeand experience in corporate governance.
In addition,the Vietnam International Law Firm said that other legal documents didnot define how a lawyer could perform the jobs of an asset caretaker.The drafting committee should consider carefully not creating conflictsbetween the Law on Bankruptcy and the Law on Lawyers.
Enterprises and creditors can negotiate about the filing forbankruptcy is the content of a new provision that is not included by thecurrent law.
According to the law firm, this wouldallow the parties to agree on a solution to handle debts withoutjeopardising business operations.-VNA
