Business Reorganization in Bankruptcy

The proceeding for Business Reorganization is a court process by which a petitioner may file a case to the Central Bankruptcy Court, for the reorganization of the debtor’s business in accordance with the provisions in the Thailand Bankruptcy Act.

Business Reorganization can take place in the following situations:

1. The debtor is a Limited Company, a Public Company Limited or any other Juristic Person, as prescribed in the Ministerial Regulations.

2. The debtor is insolvent.

3. The debtor, is indebted, to a single or multiple creditors, for a fixed amount not less than 10 Million Baht.

4. There are reasonable grounds and prospects to rehabilitate the business.

5. The debtor is not adjudicated by a Court Order for absolute ownership.

6. The debtor has not received an order from the Court or the Registrar for dissolution of the Juristic Person, or the debtor has not dissolved for any reason whether or not the liquidation of the Juristic Person is completed.

Who may file a petition for a Business Reorganization?

1. A single creditor or multiple creditors owed a fixed amount of not less than 10 Million Baht.

2. The debtor who is insolvent and indebted to a single or multiple creditors for a fixed amount not less than 10 Million Baht.

3. The Bank of Thailand when the debtors are the following:

• Commercial Bank

• Finance Company

• Finance and Securities Company

• Credit Foncier Company

4. The Securities Exchange Commission and the Stock Exchange of Thailand when the debtors are securities companies.

5. The Insurance Department when the debtor is a Life Insurance Company or Insurance against loss Company.

6. Government Offices with the authority to supervise debtor’s business operations as prescribed by the Ministerial Regulations.

Requirements in filing a petition for Business Reorganization

A petition for Business Reorganization must clearly indicate:

1. The insolvency of the debtor;

2. List and contact details of all creditors to whom the debtor is indebted for an amount of at least 10 Million Baht;

3. Reasonable grounds and prospects rehabilitate the business;

4. Name and qualifications of the Plan Preparer; and

5. A letter of consent from the Plan Preparer.

If a creditor is the petitioner, the data of other known creditors must be provided. In case a debtor is the petitioner, the list of all existing assets and debts, including the names and addresses of all creditors must be attached.

Reference: Business Reorganization Office, Legal Execution Department, Ministry of Justice

By: Magna Carta Law Office