LGMEC Plastic may sue bank to protect auctioned assets

On the morning of October 11, implementing the provisions of law on citizen reception, receiving and handling complaints, denunciations, and recommendations from citizens, the Standing Committee of the Hai Duong Provincial People's Council held a conference to discuss and agree on the direction to resolve the request of LGMEC Plastic Joint Stock Company to resolve the registration of changes in the name of assets purchased at auction from the bank's handling of bad debts.

Comrade Le Van Hieu, Standing Deputy Secretary of the Provincial Party Committee, Chairman of the Provincial People's Council, Head of the Provincial National Assembly Delegation chaired the meeting.

In 2011-2012, Construction and Industrial Materials Company Limited (SIMCO) mortgaged assets attached to land plot No. 8, cadastral map sheet 01/DD-BDDC (land plot No. 8) in Lai Cach town (Cam Giang) to borrow capital from Lien Viet Post Joint Stock Commercial Bank (now renamed LPBank).

By mid-2013, SIMCO began to default on its debt as agreed. In 2020, LPBank sued SIMCO at the Hai Ba Trung District People's Court (Hanoi) to request debt repayment and the handling of collateral to recover the debt.

In 2022, based on the responses and instructions of relevant provincial agencies, departments and branches, and legal regulations, LPBank publicly auctioned off assets attached to land at plot No. 8 to handle SIMCO's bad debt. LGMEC Plastic Joint Stock Company was the winning bidder for this asset.

The auction sale of the above-mentioned secured assets was completed before the Hai Ba Trung District People's Court held the first-instance trial of the credit contract dispute case filed by LPBank against SIMCO. The documents and records related to the handling of bad debts and the auction sale of assets have been provided to courts at all levels for consideration and information has been made public to the parties.

According to judgment No. 12/2023/KDTM-PT dated January 16, 2023 on credit contract disputes of the Hanoi People's Court, SIMCO only requested LPBank to publicly disclose the amount of money collected from the handling of secured assets to deduct from the debt amount.

After winning the auction, LGMEC Plastic contacted Dai Duong Company Limited (investor of Lai Cach Industrial Park), the Provincial Industrial Parks Management Board, and the Land Registration Office (Department of Natural Resources and Environment) to sign a land lease contract, carry out related procedures, and register changes in the name of the auctioned property.

However, LGMEC Plastic has not completed the registration procedure for the change of name of the auctioned asset, and has not signed a land lease contract for the remaining period of use (except for the period SIMCO has used).

At the meeting, representatives of the Provincial People's Court, the Land Registration Office, the Provincial Industrial Park Management Board and a number of delegates made statements clarifying related issues. The basic opinions stated that LGMEC Plastic had purchased assets from the bank in accordance with Resolution 42 of the National Assembly on bad debt settlement and had paid for the asset purchase.

Local state management agencies, depending on their assigned tasks, including the Land Registration Office, must comply with the correct procedures and processes.

The nature of the incident is determined to be that LGMEC Plastic won the auction, fulfilled its financial obligations but failed to exercise its rights to the auctioned property. The issue that needs to be clarified is which party caused this enterprise to fail to exercise its rights to the auctioned property.

In principle, according to civil procedure, the contract for the sale of assets through auction is a bilateral contract, meaning that both the buyer and seller must have obligations. It is possible that LGMEC Plastic cannot exercise its rights to the auctioned asset because the seller of the asset, i.e. LPBank, has not fully performed its obligations.

From there, a dispute arises regarding civil relations, LGMEC Plastic has the right to file a lawsuit to request the bank to perform. At that time, the court will invite this bank to participate in the proceedings as a party with related rights and obligations. If the court has grounds to determine that the auctioned asset sale contract is appropriate, it will issue a judgment forcing the parties to fully perform related obligations.

Concluding this content, Standing Deputy Secretary of the Provincial Party Committee Le Van Hieu requested the settlement agency to guide LGMEC Plastic to file a lawsuit in court regarding LPBank and related parties not ensuring the rights to the assets that this enterprise won the auction.