Pro­posed law seek­ing to en­sure pay­roll comes first

The China Post - - LOCAL -

A pro­posed law seeks to de­mand that fi­nan­cially trou­bled em­ploy­ers pri­or­i­tize salary pay­ments be­fore they pay out to other cred­i­tors.

The Ju­di­cial Yuan ( ) said yes­ter­day it has drafted amend­ments to the Con­sumer Debt Clear­ance Act (

), for­merly the Bank­ruptcy Code ( ). The pro­pos­als come into ef­fect if ap­proved by the Leg­isla­tive Yuan.

One draft amend­ment stip­u­lates that em­ploy­ers pay out to their em­ploy­ees first, be­fore all other cred­i­tors, dur­ing the six months be­fore en­ter­ing in­sol­vency pro­ceed­ings.

A sec­ond pro­posal al­lows up to a seven-year pri­son sen­tence if bank­ruptcy fil­ers con­ceal or de­stroy ev­i­dence of as­sets.

The Ju­di­cial Yuan ap­proved a clause that re­quires debtors to re­strict daily ex­penses to the stan­dard cost of living, and an­other that al­lows courts to limit debtors’ right to leave the coun­try dur­ing bank­ruptcy pro­ceed­ings.

An­other pro­posal en­ables Tai­wan courts to rec­og­nize the bank­ruptcy pro­ceed­ings of courts in main­land China, Hong Kong and Ma­cau.

If the draft is ap­proved, Tai­wanese busi­ness own­ers that file for bank­ruptcy in China can ap­ply for sta­tus recog­ni­tion back home, which would al­low them to liq­ui­date Tai­wan as­sets.

The draft amend­ments will be sub­mit­ted to the Ex­ec­u­tive Yuan for ap­proval and then to the Leg­isla­tive Yuan for re­view.

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