MOEA Put in Charge of Corporate Reorganization and Bankruptcy Act

　　A study of the single-code Corporate Reorganization and Bankruptcy Act, which represents a major reform of Taiwan’s reorganization and bankruptcy procedures, has been completed under the instigation of the Council for Economic Planning and Development (CEPD) and the Judicial Yuan. To facilitate the future implementation of this vital system, on Aug. 9, Vice Chairman Thomas Yeh of the CEPD led a group of the personnel involved on a visit to Secretary-General K.C. Fan of the Judicial Yuan. The two sides reached an agreement that the act should be put under the guidance of the Ministry of Economic Affairs (MOEA).

　　According to the Judicial Yuan, since corporate reorganizations and bankruptcies need an integrated type of handling it is necessary to encompass the handling procedures for both within a single legal code. And, in view of the specialized industrial scope which the law involves, it would be most appropriate for the related guidance and legislative work to be carried out by a competent administrative agency, in this case, the MOEA.

　　The legislation of a single legal code for reorganization and bankruptcy will entail extensive revisions of the Company Law and the existing Bankruptcy Law (which will be retained to provide for personal bankruptcies). The MOEA will set up a task force to take charge of the related legislative preparations. The matter has been reported to the Executive Yuan for review, and the Judicial Yuan will coordinate closely with the legislative work and will provide necessary consultation and assistance.

　　The CEPD notes that the enactment of the Corporate Reorganization and Bankruptcy Act will help alleviate the long and complicated process that is currently required for reorganizations and bankruptcies. The draft act was formulated primarily in reference to the federal bankruptcy system in the United States, which encompasses reorganization and bankruptcy procedures within a single legal code. Under this code, an entity that files for reorganization or bankruptcy chooses either reorganization or bankruptcy at the outset, and there are numerous provisions for switching from reorganization to bankruptcy, and vice versa; and, in the absence of regulations to the contrary, the courts will carry out a one-time disposition of the filer’s debts. For more details on the single reorganization and bankruptcy code study, please go online and check http://cedi.cepd.gov.tw/research_categories.php?cPath=1.

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