Best Restructuring & Insolvency Lawyers in Taiwan

About Restructuring & Insolvency Law in Taiwan, Taiwan

Restructuring and insolvency law in Taiwan addresses how financially distressed companies or individuals can resolve debts, protect their rights, and potentially recover their financial standing. The legal framework in Taiwan is structured to handle both voluntary and court-mandated solutions, offering tools for negotiation, reorganization, liquidation, and creditor protection. These laws are intended to balance the interests of debtors and creditors, maintain market stability, and maximize asset value during challenging financial times.

Why You May Need a Lawyer

Navigating restructuring and insolvency can be complex, with significant legal and financial consequences for all parties involved. Here are some common situations where legal assistance is crucial:

• When your business is facing financial distress and you need to assess available restructuring or insolvency options.
• If creditors are threatening legal action or asset seizure due to unpaid debts.
• When you wish to negotiate debt settlements or repayment plans with multiple creditors.
• If your business is considering filing for bankruptcy or wants to pursue court-supervised reorganization.
• When dealing with cross-border insolvency issues involving foreign creditors or assets.
• If you are a creditor seeking to recover debts from an insolvent entity or individual.
• During investigations of potential fraudulent transfers or preferential payments.
• If you are appointed as a trustee, administrator, or creditor representative in insolvency proceedings.

Local Laws Overview

Restructuring and insolvency in Taiwan are mainly governed by three legal frameworks: the Bankruptcy Act, the Company Act, and the Consumer Debt Clearance Act.

• Bankruptcy Act: This covers both personal and business bankruptcies. It sets out procedures for adjudication, asset liquidation, creditor meetings, and discharge of debts.
• Company Act: This establishes rules for company reorganization, which can be initiated by debtors or creditors when a company shows signs of financial distress. The act allows for corporate restructuring under court supervision, with the goal of restoring solvency and preserving jobs.
• Consumer Debt Clearance Act: This act addresses non-business debt issues for individuals, offering rehabilitation, liquidation, and negotiation options similar to bankruptcy protection for personal debts.

Recent reforms have improved transparency and access to court-supervised reorganization and cross-border insolvency coordination. The process typically involves the appointment of administrators or trustees, court oversight, creditor meetings, and structured plans for debt resolution. The Taiwanese court system plays a central role in overseeing proceedings and protecting the rights of all parties.

Frequently Asked Questions

What are the main types of insolvency procedures in Taiwan?

Taiwan provides for bankruptcy, liquidation, and reorganization procedures. For individuals, the Consumer Debt Clearance Act offers rehabilitation and liquidation options. For companies, court-supervised reorganization and bankruptcy liquidation are available.

Who can file for bankruptcy or restructuring in Taiwan?

Both individuals and companies can file for insolvency protection in Taiwan. In some cases, creditors can also apply to initiate insolvency proceedings against a debtor.

What is the difference between liquidation and reorganization?

Liquidation involves selling a debtor's assets to pay creditors, resulting in the closure of the business or complete discharge of personal debts. Reorganization aims to restructure debts and business operations, allowing the company to continue while paying creditors under a new plan.

What is the role of the court in insolvency cases?

Taiwanese courts oversee the process, approve or reject restructuring and liquidation applications, appoint administrators or trustees, and resolve disputes between parties.

Are directors or business owners personally liable for company debts?

Generally, company debts are separate from personal assets, but directors may be liable if there is evidence of fraud, misconduct, or breach of fiduciary duties.

How are creditors' rights protected during insolvency?

Creditors have the right to be notified of proceedings, attend creditor meetings, vote on restructuring plans, and receive distributions according to legal priority.

Can foreign creditors participate in Taiwanese insolvency proceedings?

Yes, foreign creditors can participate and file claims, but must comply with Taiwan’s legal procedures and provide necessary documentation.

How long do insolvency proceedings usually take in Taiwan?

Timelines can vary widely, from several months to several years, depending on the complexity of the case, number of creditors, and nature of assets involved.

Will bankruptcy affect my ability to start a new business?

Individuals discharged from bankruptcy can legally start new businesses, but there may be reputational or credit-related challenges to consider.

Is court approval always required in restructuring cases?

Yes, most restructuring and insolvency plans must be approved by the court to ensure fairness and legal compliance.

Additional Resources

If you need further information or assistance about restructuring and insolvency in Taiwan, consider reaching out to the following organizations:

• Judicial Yuan: The central body for court administration in Taiwan, offering guidance and resources on legal proceedings, including insolvency cases.
• Ministry of Justice: Responsible for implementing and overseeing bankruptcy and restructuring regulations.
• The Taiwan Bar Association: Provides directories of licensed insolvency and restructuring lawyers.
• Legal Aid Foundation: Offers assistance to individuals facing insolvency who may not afford private legal representation.
• Court-appointed administrators and trustees: Often listed by local district courts handling insolvency cases.

Next Steps

If you believe you need legal assistance with a restructuring or insolvency matter in Taiwan, here are practical steps to take:

• Gather all relevant financial documents, including asset lists, debt statements, contracts, and correspondence from creditors.
• Assess your financial status and goals, whether aiming for debt negotiation, reorganization, or liquidation.
• Consult with a qualified lawyer specializing in restructuring and insolvency to evaluate your options and rights. The Taiwan Bar Association can help you find reputable professionals.
• If you are a creditor, consider seeking legal counsel early to protect your interests in ongoing proceedings.
• Stay informed about deadlines and court notices, and actively participate in meetings or discussions related to your case.
• Make sure to follow all court instructions and legal requirements to avoid unnecessary delays or complications.
• If cost is a concern, inquire about legal aid services or court-appointed administrators who can provide guidance.

Addressing restructuring or insolvency can be challenging, but with professional legal advice and a clear understanding of local law, you can protect your interests and work towards financial recovery.