H&P law firm in Thailand have been advising in several well-known cases of bankruptcy and restructuring, especially after the beginning of the Covid-19 pandemic in early 2020. Some of the key aspects to consider in Bankruptcy Law in Thailand are:
WHO CAN FILE BANKRUPTCY PETITION?
In case where the debtor is a corporation, registered partnership or limited partnership, the creditor and company’s liquidator are entitled to submit a bankruptcy petition against the debtor under the Bankruptcy Act, B.E. 2483(1940) (“BRA”). However, the conditions will vary depending on the type of petitioner. If the petitioner is the creditor, regardless of whether the creditor is secured or ordinary creditor, it must appear to the court that the debtor becomes insolvent and indebts over 2 million THB. For liquidator, the petitioner must demonstrate that the company’s assets, including full payment of contributions and paid-up shares, are insufficient to repay the debts.
In order to avoid insolvency, the debtor may file a plan of reorganization, seeking the adjustment of debt such as to extend the repayment period or to reduce the debts. By this legal method, the debtor can continue normal operation of its business while undergoing a reorganization plan, leaving a period for the debtor to resolve the difficulties of its financial situation. However, the debtor is prohibited to perform any actions creating more debts or any encumbrance over its property. Apart from the voluntary petition by the debtor, the reorganize process may begin by other interested person who meets the certain requirement under section 90/4 of the BRA, such as the creditor or creditors whose debtor is indebted over 10 million THB.
If the requirement for reorganization petition is satisfied and the court accepts the petition, the debtor will be provided an automatic stay period under section 90/12 of the BRA. Upon the stay, the claims affecting to the debtor’s assets or business must be suspended. For example, the claims or actions seeking a winding up order, bankruptcy order, the execution order against the debtor’s assets. During the reorganize process, the secured creditor will, however, has less power to get repayment as the secured creditor is not allowed to process any execution upon the secured assets unless the court approval
If you need to consult a law firm in Thailand in restructuring, reorganization and bankruptcy, please contact us at [email protected]