Decision No. 01/2025/QDPT-PS dated January 7, 2025 regarding the Request for Reconsideration of the Decision on Corporate Bankruptcy Declaration

1. General Information

• Document Name: Decision on resolving the request for reconsideration of the decision on corporate bankruptcy declaration (No. 01/2025/QDPT-PS).

• Issuing Authority: The People’s Court of Ho Chi Minh City.

• Date of Issuance: January 07, 2025.

• Petitioner for Bankruptcy Proceedings: Ms. Ho Mong D.

• Entity Subject to Bankruptcy Petition: P Company Limited (P Co., Ltd).

2. Case Background

On September 19, 2024, the People’s Court of Thu Duc City issued Decision No. 4440/2024/QDST-PS, refusing to initiate bankruptcy proceedings against P Co., Ltd. Subsequently, both the petitioner (Ms. Ho Mong D) and the enterprise itself (represented by its legal representative) filed a request for reconsideration to the People’s Court of Ho Chi Minh City. They argued that the company had, in fact, insolvent (lost the ability to pay its debts).

3. Findings of the Superior Court (People’s Court of Ho Chi Minh City)

• Regarding Errors by the Lower Court: The Court found that the People’s Court of Thu Duc City erred in relying solely on financial statements from 2020-2021. Furthermore, the lower court’s claim that the debt was "unconfirmed by a court judgment or commercial arbitration" as a ground to refuse the petition was deemed legally inconsistent.

• Nature of the Debt: The debt between Ms. D and P Co., Ltd originated from a 2018 loan agreement. This is a specific, clear, and undisputed debt acknowledged by both parties. Under the Law on Bankruptcy and guidance from the Supreme People’s Court, this suffices to determine insolvency without requiring a prior court judgment.

• Current Status of the Enterprise: Financial reports dated January 05, 2024, submitted during the appeal process, proved that P Co., Ltd has ceased business operations, lacks human resources, and has no cash flow to settle the debt. This constitutes a clear state of insolvency.

4. Final Ruling

Based on the above findings and the recommendations of the People’s Procuracy of Ho Chi Minh City, the Judges' Panel decided:

- To accept the requests of Ms. Ho Mong D and P Co., Ltd.

- To annul Decision No. 4440/2024/QDST-PS dated September 19, 2024, issued by the People’s Court of Thu Duc City.

- To remand the case files to the People’s Court of Thu Duc City to reconsider and issue a decision to initiate bankruptcy proceedings against P Co., Ltd in accordance with the law.