Procedure for Formulating a Business Recovery Plan under the Law

The Law on Recovery and Bankruptcy 2025 (No. 142/2025/QH15), effective from 01/03/2026, has fully replaced the Law on Bankruptcy 2014. Under the new law, the recovery procedure is prioritized before the bankruptcy procedure is considered, and the entire process of formulating, approving and implementing a business recovery plan has been redesigned. So in what order do enterprises and cooperatives build a recovery plan? In which cases is the recovery procedure suspended, and what are the resulting legal consequences?

1. The position of the recovery procedure in the Law on Recovery and Bankruptcy 2025

The principled innovation of the Law on Recovery and Bankruptcy 2025 (No. 142/2025/QH15), effective from 01/03/2026, is prioritizing the application of the recovery procedure for enterprises and cooperatives (Clause 1, Article 3). The recovery procedure is prescribed in Chapter II of the Law, placed before the bankruptcy procedure in Chapter III — reflecting the logic of “recovery first, bankruptcy/liquidation later”. Note that the recovery procedure (and the summary recovery procedure) does not apply to credit institutions, insurance enterprises or reinsurance enterprises (Article 2).

Under Article 24, the following persons have the right to file a petition requesting the application of the recovery procedure when an enterprise or cooperative is at risk of losing or has lost solvency: the enterprise’s or cooperative’s legal representative; the Board of Directors of a joint stock company; the Members’ Council of a multi-member limited liability company; the Members’ Council of a partnership; the Members’ Congress of a cooperative; and the owner of a private enterprise or the owner of a single-member limited liability company. The petitioner must attach to the petition the business recovery plan, the list of creditors and debtors, and accompanying documents and evidence proving the request is well-founded and lawful (Clause 1, Article 25).

2. Contents of the business recovery plan

Under Article 28 of the Law on Recovery and Bankruptcy 2025 (No. 142/2025/QH15), effective from 01/03/2026, the business recovery plan must clearly state measures for recovering business operations that do not contravene the law; and the conditions, time limits and payment schedule for debts (Clause 1).

The debt payment schedule in the plan must ensure the following payment priority order (Clause 2, Article 28):

a) Recovery costs;

b) Wage debts, debts of compulsory social insurance, unemployment insurance, health insurance, occupational accident and occupational disease insurance; severance allowances and other employee benefits under collective labor agreements and signed labor contracts;

c) Debts incurred for the purpose of recovering the business operations of the enterprise or cooperative;

d) Secured debts;

dd) Other debts.

3. Procedure for formulating and approving the recovery plan

Step 1 — Finalizing the plan. Within 30 days from the date of acceptance of the petition requesting the application of the recovery procedure, the enterprise or cooperative finalizes the business recovery plan for the asset administrator or asset management and liquidation enterprise to report to the Judge (Clause 3, Article 28).

Step 2 — Convening the Creditors’ Meeting. Within 05 working days from the date of receipt of the business recovery plan, the Judge considers and decides to convene the Creditors’ Meeting to decide on approving the plan, proposing suspension of the recovery procedure, or proposing application of the bankruptcy procedure (Clauses 1 and 7, Article 33).

Step 3 — Voting for approval. A resolution of the Creditors’ Meeting is adopted when creditors representing at least 65% of the total debts of the creditors participating in the vote approve it. The resolution is binding on all creditors (Clause 6, Article 33). Where the Creditors’ Meeting finds that the enterprise or cooperative has lost solvency, it may adopt a resolution proposing the application of the bankruptcy procedure, which must include the obligation to advance bankruptcy costs (point c, Clause 7, Article 33).

Step 4 — Judge’s recognition. Within 07 days from the date the Creditors’ Meeting adopts the resolution approving the business recovery plan, the Judge issues one of the following decisions: recognizing the Creditors’ Meeting’s resolution; or refusing recognition and suspending the recovery procedure where the resolution approving the plan contains provisions violating legal prohibitions (Clause 1, Article 34). The Creditors’ Meeting’s resolution approving the plan takes effect from the date the Judge issues the recognition decision.

4. Implementation time limit and supervision of the recovery plan

The time limit for implementing the enterprise’s or cooperative’s business recovery plan follows the resolution of the Creditors’ Meeting approving the plan. Where the Creditors’ Meeting does not determine a time limit, the implementation period is no more than 03 years from the date the Creditors’ Meeting approves the business recovery plan (Article 29).

After the Judge issues the decision recognizing the Creditors’ Meeting’s resolution approving the plan, the asset administrator, the asset management and liquidation enterprise, the Creditors’ Representative Board and creditors supervise the business operations of the enterprise or cooperative. Once every 03 months, the enterprise or cooperative must prepare a report on the plan’s implementation for the asset administrator, the asset management and liquidation enterprise, the Creditors’ Representative Board or creditors; the asset administrator and the asset management and liquidation enterprise are responsible for reporting to the Judge (Article 35).

During implementation, creditors and the enterprise or cooperative may agree to amend or supplement the plan. A resolution on amendment or supplementation is adopted when creditors representing at least 65% of the total debts of the creditors participating in the vote approve it; the asset administrator or the asset management and liquidation enterprise sends a written request for the Judge to issue a recognition decision (Article 36).

5. Suspension of the recovery procedure and legal consequences

Under Clause 1, Article 37 of the Law on Recovery and Bankruptcy 2025 (No. 142/2025/QH15), effective from 01/03/2026, the Judge decides to suspend the recovery procedure in one of the following cases:

a) The petitioner withdraws the petition after the date of acceptance and before the date the Creditors’ Meeting approves the business recovery plan;

b) The Creditors’ Meeting fails to adopt a resolution;

c) The Creditors’ Meeting’s resolution proposes suspension of the recovery procedure;

d) The Judge does not recognize the Creditors’ Meeting’s resolution;

dd) The enterprise or cooperative fails to finalize or implement the business recovery plan;

e) The implementation period of the business recovery plan expires without completion of the plan;

g) The enterprise or cooperative has completed the business recovery plan;

h) The enterprise or cooperative is no longer at risk of losing solvency or has regained solvency;

i) Other cases as prescribed by law.

The consequences of suspending the recovery procedure are prescribed in Clause 3, Article 37 as follows:

– Upon the decision to suspend the recovery procedure, the duties and powers of the asset administrator and the asset management and liquidation enterprise terminate; those who advanced recovery costs are refunded the remaining advance;

– Prohibition and supervision measures applied to the enterprise or cooperative terminate;

– Where suspended or stayed asset obligations have not been paid, the Court notifies the civil judgment enforcement agency and competent agencies or organizations to issue a decision to continue enforcement and to apply measures compelling the enterprise or cooperative to perform its asset obligations;

– Where suspended or stayed asset obligations have been paid, the Court notifies the competent authority to issue a decision to suspend enforcement and to stop applying measures compelling the enterprise or cooperative to perform its asset obligations.

Note: in the case of suspension because the Judge does not recognize the Creditors’ Meeting’s resolution, within 10 days from the date of receipt of the decision, participants in the recovery procedure have the right to request reconsideration, and the Procuracy has the right to make recommendations to the Chief Justice of the Court handling the recovery procedure (Clause 4, Article 37).

6. Transitional provisions for dossiers arising before 01/03/2026

Under Article 88 of the Law on Recovery and Bankruptcy 2025, for bankruptcy cases accepted by the Court before the effective date of this Law (01/03/2026) that remain unresolved, the provisions of this Law apply to continue resolving them, except in the following two cases:

a) The civil judgment enforcement agency is organizing the enforcement of a decision declaring the enterprise or cooperative bankrupt issued before the effective date of this Law that remains unenforced — enforcement continues under the Law on Bankruptcy No. 51/2014/QH13;

b) Requests or recommendations regarding the decision declaring bankruptcy prescribed in Article 113 of the Law on Bankruptcy No. 51/2014/QH13 that remain unresolved by the effective date of this Law are resolved under the Law on Bankruptcy No. 51/2014/QH13.

Thus, dossiers arising before 01/03/2026 are in principle transitioned to the Law on Recovery and Bankruptcy 2025; only cases at the stage of enforcing the bankruptcy declaration decision or resolving requests/recommendations regarding the bankruptcy declaration decision continue to apply the Law on Bankruptcy 2014.

Notes on applying current legal provisions

This article belongs to the Real Estate & Project Knowledge group and is presented for reference, helping readers understand the legal issue at a general level before preparing dossiers or conducting transactions.

Legal provisions may change depending on time, locality, dossier type and specific circumstances. Where it is necessary to determine the exact legal basis applicable to your dossier, you should contact ANT Legal’s lawyers at 0966.475.966 for verification and advice before proceeding.

Common risks to note

• Applying legal documents that have been amended, supplemented or replaced.
• Preparing incomplete dossiers, documents or evidence.
• Misunderstanding conditions, procedures, time limits or competent authority.
• Signing, submitting dossiers or conducting transactions without fully assessing legal risks.

How can ANT Legal help?

ANT Legal assists with reviewing specific situations, checking dossiers, determining the applicable legal basis, advising on handling plans and representing clients before individuals, organizations or competent authorities when necessary.

For quick advice, you may contact our lawyers at 0966.475.966.

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