Best Restructuring & Insolvency Lawyers in Taipei

About Restructuring & Insolvency Law in Taipei, Taiwan

Restructuring & Insolvency law in Taipei, Taiwan, governs the processes by which financially distressed businesses or individuals seek to reorganize their debts, enter into settlement arrangements with creditors, or proceed through formal insolvency proceedings such as bankruptcy or liquidation. The main objective of these legal frameworks is to balance the interests of debtors and creditors, preserve economic activity when possible, and ensure fair and orderly resolution of financial difficulties. Existing legal procedures are outlined in the Bankruptcy Act, the Company Act, and the Consumer Debt Clearance Act, applying to both corporate and personal financial distress. The Taipei District Court and related government agencies oversee these matters, providing structured legal mechanisms to address financial challenges.

Why You May Need a Lawyer

Engaging a lawyer in restructuring and insolvency matters is essential due to the complexities and legal risks involved. Common situations where legal assistance is necessary include:

• Facing debtor claims or demands from creditors
• Managing cash flow crises and needing to negotiate debt restructuring or settlements
• Initiating or responding to bankruptcy proceedings
• Advising on directors' and officers' liabilities during insolvency situations
• Negotiating with multiple creditors and ensuring equal treatment of claims
• Interpreting the local legal requirements for bankruptcy, rehabilitation, or liquidation
• Dealing with cross-border insolvency issues with foreign creditors or stakeholders
• Protecting personal assets from potential claims in personal insolvency scenarios
• Ensuring compliance with statutory timelines and procedural requirements
• Understanding the risks and benefits of restructuring versus liquidation

Given the serious financial and legal consequences at stake, a qualified lawyer can help protect your interests, maximize the chances of a favorable outcome, and simplify the often complex legal process.

Local Laws Overview

Restructuring and insolvency cases in Taipei are primarily governed by several key statutes:

• Bankruptcy Act: Governs both personal and corporate bankruptcies, setting out the criteria for declaring bankruptcy, examining assets, and distributing proceeds to creditors.
• Company Act: Contains provisions for company dissolution, liquidation, and corporate reorganization. Includes mechanisms for restructuring financially distressed companies under court supervision.
• Consumer Debt Clearance Act: Provides individuals (not companies) with an alternative to bankruptcy through debt negotiation, workout, and liquidation procedures before the court.

In Taipei, insolvency procedures can be voluntary (initiated by debtors) or involuntary (initiated by creditors). Corporate reorganizations allow companies to propose a restructuring plan to creditors and the court, with the aim of returning the business to financial viability. Liquidation involves selling assets to pay creditors and closing down the business. Directors have specific duties to act in the best interest of the company and its creditors during insolvency situations, and failure to fulfill these obligations can lead to personal liability. It is also critical to comply with statutory filing and notice procedures to ensure protection under the law.

Frequently Asked Questions

What is the difference between bankruptcy and restructuring in Taiwan?

Bankruptcy is a legal process to liquidate a debtor's assets and distribute proceeds to creditors, typically leading to the closure of the company or loss of assets for individuals. Restructuring refers to reorganizing debts and operations to help the debtor regain financial stability and continue business operations, often involving court-approved plans.

Who can file for bankruptcy or restructuring in Taipei?

Both individuals and companies can file for bankruptcy. However, corporate restructuring (similar to reorganization) is available only to companies under the Company Act. Individuals with significant debt may use the Consumer Debt Clearance Act to seek relief.

What are the main steps in a corporate reorganization procedure?

The process involves applying to the court for protection, submitting a restructuring plan, convening creditor meetings, seeking approval from creditors and the court, and executing the plan if approved. The court may appoint a supervisor or administrator as necessary.

How long do insolvency proceedings typically take in Taipei?

The duration varies by case complexity. Liquidation and bankruptcy can take several months to years. Corporate reorganizations are usually lengthy, as they require creditor negotiations and court approval, often taking one to two years or more.

Will I lose all my assets if I declare bankruptcy?

Not necessarily. For individuals, certain personal assets may be protected by law. In corporate situations, assets are sold to pay creditors, but directors and shareholders are not always personally liable unless there is misconduct or personal guarantees.

Are directors personally liable for company debts in insolvency?

Directors are generally not personally liable unless they have breached fiduciary duties, acted fraudulently, or given personal guarantees. Taiwanese law sets out specific duties for directors during periods of imminent insolvency.

Can insolvent companies continue trading during restructuring?

Yes, companies can continue operations under court supervision while a restructuring plan is developed and implemented, provided certain legal requirements are met.

What is the role of creditors in bankruptcy or restructuring?

Creditors have the right to participate in meetings, file claims, vote on restructuring plans, and receive payments according to statutory priorities. Their cooperation is often needed for a successful reorganization.

Is cross-border insolvency recognized in Taiwan?

Taiwanese law does not adopt international cross-border insolvency conventions, but courts may recognize foreign insolvency judgments and cooperate in asset distribution under certain conditions. Legal advice is essential for cross-border cases.

How can a lawyer assist in the restructuring or insolvency process?

A lawyer provides strategic advice, assists with documentation and filings, represents clients in court and negotiations, protects rights and interests, ensures compliance with legal requirements, and guides clients through each stage of the process.

Additional Resources

If you are seeking support or more information about restructuring and insolvency in Taipei, you may find these organizations and governmental bodies helpful:

• Taipei District Court - Bankruptcy and Reorganization Divisions
• Financial Ombudsman Institution
• Ministry of Economic Affairs - Department of Commerce
• Judicial Yuan
• Consumer Protection Committee
• Legal Aid Foundation in Taiwan
• Certified Public Accountants Associations (for financial advice in insolvency cases)

These institutions provide procedural information, legal aid, public guidance, and may offer free consultation services to qualifying individuals.

Next Steps

If you believe you require legal assistance for restructuring or insolvency matters in Taipei, consider the following actions:

• Consult a qualified restructuring and insolvency lawyer with experience in Taiwanese law
• Gather all relevant financial documents, contracts, and correspondence related to your situation
• Request a legal consultation to assess your options, rights, and obligations
• Determine whether bankruptcy, restructuring, or out-of-court settlements may best fit your needs
• If urgent action is required, prioritize meeting legal deadlines and court requirements
• Contact local legal aid resources if you have difficulty affording legal representation

Acting early and accessing professional legal guidance is the best way to manage financial distress and protect your interests under Taipei’s restructuring and insolvency laws.