THAILAND Law and Practice Contributed by: Nathee Silacharoen, Tawatchai Boonmayapan and Norrapat Werajong, Chandler Mori Hamada
nism permits the debtor to submit a pre-packaged plan directly to the court (without the need for the official receiver to formally hold a creditors’ meeting), effectively streamlining the process and reducing the time typically required for court approval. 4.2 Statutory Restructuring, Rehabilitation and Reorganisation Procedure Binding Effects on Creditors Once the court approves the rehabilitation plan, the procedures under the Plan will be binding on all credi - tors, regardless of whether they voted for or against the Plan or abstained. Unknown creditors or creditors with contingent claims, or those who have not filed an application for debt repayment, will lose their rights to repayment unless otherwise stated in the rehabilita - tion plan, or unless the court cancels the order for business rehabilitation. Determining the Value of Claims and Creditors During business rehabilitation proceedings, credi - tors must provide the grounds supporting their debt repayment application and present evidence to the official receiver to determine the value of the claims. However, they may be subject to objections by the debtor, the planner or other creditors. In the event of a dispute, the official receiver or the Bankruptcy Court, as the case may be, will decide the value of the claims that the creditors are entitled to receive under the business rehabilitation proceedings. These claim values as admitted by the official receiver are essential, since they will represent the voting rights of the creditors at creditors’ meetings. In addition, the claims of creditors may be crammed down (resulting in a haircut) without their consent, under the proposed business rehabilitation plan pre - pared by the planner. A dissenting creditor may file a petition to appeal the decision of the official receiver or object to the accept - ed Plan in court. The court will then consider whether any amendments are necessary. Roles of Creditors in Business Rehabilitation Proceedings Creditors who file an application for debt repayment within the prescribed period will be put into separate
classes, typically secured and unsecured creditors. However, each class of creditors can be further divid - ed into several subgroups, depending on the nature of claims they have against the debtor. A creditors’ meeting may adopt a resolution to appoint a creditors’ committee empowered to monitor the implementation of the Plan. Members of the credi - tors’ committee are selected from the creditors or representatives of the creditors, and the committee must consist of no fewer than three and no more than seven members. No Effect on Third Parties’ Liabilities The fact that a debtor has entered into business reha - bilitation proceedings will not affect the liabilities of non-debtor parties – eg, guarantors, security provid - ers or other entities within the corporate group. Effects on Shareholders Business rehabilitation proceedings will limit share - holders’ rights to access certain information for the purpose of business operational oversight (exclud - ing the right to receive dividends), as these rights are transferred to the planner or the plan administrator, as the case may be. Furthermore, if the Plan involves issuing new shares or restructuring the debtor’s capi - tal, existing shareholders may experience a dilution of their ownership percentage. Automatic Stay In business rehabilitation proceedings, when the court officially issues an order accepting the business rehabilitation petition for consideration, a moratorium (automatic stay) takes effect. Any ongoing actions or litigation against the debtor are suspended, no new actions or civil lawsuits can be initiated against the debtor, and secured creditors are prevented from enforcing their security outside the business rehabili - New money may be injected for use in ordinary busi - ness operations, and creditors providing the financing should be entitled to a particular priority/ranking over other creditors. However, a debtor may not take any action that causes encumbrances to be created over its assets in response to obtaining priority new money, tation proceedings. Priority New Money
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