THAILAND Trends and Developments Contributed by: Nathee Silacharoen, Tawatchai Boonmayapan and Norrapat Werajong, Chandler Mori Hamada
Chandler Mori Hamada 31st and 36th Floors Sathorn Square Office Tower 98 North Sathorn Road Silom Bangrak Bangkok 10500 Thailand
Tel: +662 009 5000 Fax: +662 009 5080 Email: business-development@morihamada.com Web: chandler.morihamada.com/en
Insolvency Trends/Market Dynamics Insolvency filings with the Central Bankruptcy Court (the “Bankruptcy Court”) surged to 14,622 cases in 2024, up from 9,484 cases in 2023. This surge reflects both a catch-up effect from previously delayed filings and ongoing economic challenges. Conversely, busi - ness rehabilitation proceedings dropped to 20 cases (down from 34 cases in the previous year), indicating that fewer distressed businesses are pursuing formal restructuring, possibly due to stricter court scrutiny and higher eligibility thresholds. Persistent political uncertainty, deflation and weak inbound investment continue to pressure key sec - tors. As a result, more major companies are turning to business rehabilitation, with about 70% of 2024 cases coming from construction, real estate and manufac - turing. Moreover, despite government stimulus efforts, tour - ism remains below expectations, which intensifies financial strain on businesses that are still recovering. Real estate continues to struggle, as prices outpace incomes and oversupply issues persist. In addition, the ongoing real property crisis has further reduced investment and demand from foreign buyers, with delays in construction resulting from the earthquake crisis. Furthermore, manufacturing faces ongoing challenges from inflation and global economic uncer - tainty, driving more businesses towards seeking court-led rehabilitation.
Legislative Updates Efforts are ongoing to reform the framework govern - ing rehabilitation proceedings under the Bankruptcy Act. The principal proposed amendments (which were recently approved by the House of Representa - tives and have been referred to the Senate for further approval) are summarised below. Debt threshold for business rehabilitation Recent legislative updates will raise the debt thresh - old for business rehabilitation filings from THB10 mil - lion to at least THB50 million for ordinary businesses, and from under THB10 million to under THB50 million for small to medium-sized enterprises (SMEs). This change is expected to impact the eligibility of busi - nesses seeking rehabilitation, and reflects the govern - ment’s response to evolving market conditions. SME business rehabilitation Despite SME-specific provisions in the Bankruptcy Act, few SME cases have been filed. To address this, lawmakers are moving to streamline the process by removing the pre-packaged plan requirement, allow - ing automatic appointment of planners, and updating voting and timeline rules. These proposed amend - ments aim to make rehabilitation more accessible and efficient for SMEs. Pre-packaged proceedings In addition, new draft legislation will introduce a formal expedited process for pre-packaged proceedings, modelled after US Chapter 11. This initiative aims to streamline restructuring, reduce uncertainty and
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