THAILAND Law and Practice Contributed by: Nathee Silacharoen, Tawatchai Boonmayapan and Norrapat Werajong, Chandler Mori Hamada
Retention of Title Under Thai law, it is possible for a creditor to take pos - session of the debtor’s assets (currently held by the creditor) or to retain legal ownership of an asset (which is set to be transferred to the debtor) until specific conditions (usually full payment) are satisfied. Set-Off Set-off is permissible for mutual debts between par - ties under certain conditions. It can be invoked by notifying the other party once the obligations are of the same kind, enforceable and due. 3. Out-of-Court Restructuring 3.1 Out-of-Court Restructuring Process An out-of-court restructuring does not require any specific formalities or a formal process, as it is based entirely on commercial discussions between the credi - tors and the debtor. Unlike in an in-court restructuring, the parties can formulate their own restructuring plan that offers some flexibility in terms of the conditions and timeline of the restructuring process. Thai law does not require that debtors and creditors pursue an out-of-court restructuring prior to initiating statu - There is no specific law or regulation governing out- of-court restructurings, as these are carried out by mutual agreement between debtors, creditors and other relevant stakeholders, subject to the applica - tion of general laws. 4. Statutory Restructuring, Rehabilitation and Reorganisation Proceedings 4.1 Opening of Statutory Restructuring, Rehabilitation and Reorganisation Basis for Commencing the Proceedings Under the Bankruptcy Act, traditional business reha - bilitation proceedings can be initiated by either the debtor or the creditor. These proceedings can be commenced if it appears that the debtor owes a defi - nite amount of not less than THB10 million to one or tory proceedings. 3.2 Legal Status
more creditors, regardless of whether such debt is due immediately, and if there are reasonable grounds and the potential for successfully rehabilitating the busi - ness of the debtor. The objectives of business rehabilitation proceedings are to ensure the continued operation of the debtor’s business and to allow creditors to receive a repay - ment amount that is not less than the amount they would receive if the debtor were subject to bankruptcy proceedings. Subject of the Proceedings Only certain types of corporate debtors are eligible for traditional business rehabilitation proceedings as defined by law. Under Thai law, the debtor and other parties, even within a corporate group, are treated as separate entities. As a result, if different entities within a corporate group seek business rehabilitation, each must initiate separate proceedings; otherwise, the Bankruptcy Act protection would not apply. Overview of the Proceedings Business rehabilitation proceedings are led by the official receiver, the planner and the plan administra - tor, under the supervision of the Bankruptcy Court. Once the creditor(s) or debtor lodges a petition with the Bankruptcy Court, the court will schedule a hear - ing to consider the petition. The court will grant such petition and appoint the planner (who is responsible for formulating and preparing the Plan for the debtor) if the court finds that: • the debtor is insolvent and owes not less than THB10 million; • there are reasonable grounds; • there are prospects for successfully rehabilitating the debtor’s business; and • the petition is lodged in good faith. The Plan has to be approved by the creditors’ meet - ing and the court before it can be implemented. Once approved, the Plan will be implemented and executed by the plan administrator. An expedited process is currently available only for business rehabilitation proceedings involving small and medium-sized enterprises (SMEs). This mecha -
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