THAILAND Law and Practice Contributed by: Nathee Silacharoen, Tawatchai Boonmayapan and Norrapat Werajong, Chandler Mori Hamada
except where such action is essential for the debtor to continue normal business operations, or as otherwise ordered by the court. 4.3 The End of the Restructuring, Rehabilitation and Reorganisation Procedure Disapproval of the Business Rehabilitation Plan by the Creditors’ Meeting If the Plan is disapproved by the creditors’ meeting, it will lead to the termination of the rehabilitation pro - ceedings. Once the Plan is disapproved, the official receiver will have to notify the court of this matter. In this regard, the court may issue an order annulling the rehabilitation proceedings or dismissing the rehabilita - tion petition, and may proceed with the bankruptcy proceedings if they had already been initiated prior to rehabilitation. Key Considerations for the Court to Endorse a Business Rehabilitation Plan The Plan is prepared by the planner and proposed to the creditors’ meeting for approval, after which the Bankruptcy Court will assess whether the proposed Plan is in line with the Bankruptcy Act. If the debtor cannot satisfy the requirements, the court will either issue an order annulling the rehabilitation proceed - ings or dismissing the rehabilitation petition, and may proceed with the bankruptcy proceedings if they had already been initiated prior to rehabilitation. The key factors considered by the court in endorsing the Plan include: • ensuring equal treatment among creditors within each class; • demonstrating that creditors will receive more under the Plan than they would if the debtor were adjudicated bankrupt; and • the overall fairness. Successful Implementation of the Plan The executives of the debtor, the plan administrator or the official receiver may submit to the court a petition to terminate the business rehabilitation proceedings. If the court determines that the business rehabilita - tion has been successfully carried out and completed in accordance with the terms and conditions of the business rehabilitation plan, the court will terminate the business rehabilitation proceedings. Upon termi -
nation, the debtor will be discharged from all debts unless otherwise stipulated in the Plan. Moreover: • the authority to manage the debtor’s business will return to the debtor’s executives without court or official receiver oversight; • the rights of the debtor’s stakeholders will be rein - stated; and • the automatic stay will no longer be in effect. Failure to Observe the Terms of the Business Rehabilitation Plan If the business rehabilitation has not been successfully implemented within the timeframe specified under the Plan, the executives of the debtor, the plan adminis - trator or the official receiver must submit a report to the court within 14 days after the expiry of the Plan’s implementation period. Following a proper investi - gation of the evidence and statements from the offi - cial receiver and the creditors, as well as arguments issued by the debtor, the court may issue an order terminating the rehabilitation proceedings or issue an order for absolute receivership against the debtor if it determines that the debtor should be declared bank - rupt. This does not affect any actions previously conducted in good faith and in accordance with the Plan. In addi - tion, the rights and duties of the creditors will remain as they were prior to the issuance of the rehabilitation order. An automatic stay begins when the court accepts the petition for business rehabilitation. While the company can continue operating its business, it is prohibited from: • disposing of or transferring assets; • paying or creating debts; or • performing any actions that create unneces - sary encumbrances over its assets without court approval or outside the ordinary course of busi - ness. 4.4 The Position of the Debtor in Restructuring, Rehabilitation and Reorganisation Position of the Debtor
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