You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

August 30, 2016

Business Reorganization in Thailand: Steps and Procedures

Informed Counsel

In order to repay debts, many flailing companies allocate additional resources to uncover new sources of income. In turn, these companies incur more debt, and this can lead to a vicious downward spiral ending in bankruptcy.

Despite this bleak outlook, these companies still have the potential to recover and become profitable. One way is through reorganization, which provides relief to debtors that allows them to survive a crisis while ensuring that their creditors receive fair repayment.

To initiate the reorganization process, debtors, creditors, or government agencies can submit a reorganization petition to the Bankruptcy Court.

Once the Bankruptcy Court accepts a reorganization petition, all of the debtor’s outstanding debts are automatically stayed or “frozen.” The automatic stay ensures that the debtor will be protected by the Bankruptcy Act, which shields the debtor from creditors’ debt collection efforts.

During an automatic stay, a debtor is obligated not to dispose of, distribute, transfer, pay debt, create debt, or act in any way which may encumber its property, except those necessary for conducting its ordinary business or as otherwise provided by court order.

In the trial phase, the Bankruptcy Court will review all documentary evidence and hear all witnesses. If the Court agrees with the petitioner, it will allow the debtor to reorganize. If it disagrees with the petitioner, the Court will dismiss the case. The petitioner can submit an appeal to the Supreme Court and request a review of the Court’s decision.

Once the Court approves the debtor’s petition to reorganize, it will appoint a planner with the duty to prepare and submit a business reorganization plan for the debtor and operate the debtor’s business. This is usually someone nominated by the petitioner. If there are objections from any creditor or debtor as to the identity of the planner, the official receiver—by court order—will hold a creditors’ meeting to elect a suitable planner.

At the creditors’ meeting, the planner will be approved by the creditors that are owed no less than two-thirds of the total debts, failing which the person proposed by the debtor will be chosen as the planner. Once the planner is appointed, the rights and duties of the debtor will immediately transfer to the planner. In addition, all legal rights of the debtor’s shareholders, with the exception of the right to receive dividends, will be vested in the planner.

After the planner is appointed, the official receiver will publish the Bankruptcy Court’s reorganization order in the Government Gazette and in two widely circulated daily newspapers. All creditors must submit a repayment application with a copy to the official receiver within one month from the publication date. Creditors that are owed debts incurred prior to the Court’s issuance of the reorganization order are entitled to submit an application.

Once all applications have been submitted, the debtor, all creditors, and the planner will have the right to review and object to applications which they deem as invalid. The official receiver will evaluate the matter and render a decision as to voting rights in approving the reorganization plan. During this process, the planner is tasked with drafting the reorganization plan, which must include details such as the reasons why the debtor requires reorganization, principles and methods of business reorganization, redemption of collateral if there are secured creditors or liabilities of a guarantor, ways to resolve problems if there is a temporary lack of liquidity during implementation of the plan, and the time period for the plan which must not exceed five years, among other details. In addition, the planner is empowered to refinance, restructure, and hair-cut the debts as he or she deems necessary.

The planner must submit the plan to the official receiver within three months from the publication date of the Court’s order appointing the planner. After receiving the plan, the official receiver will hold a creditors’ meeting to discuss whether the plan should be accepted in its current form or revised. If a decision is rendered to approve the reorganization plan, a special resolution to that effect must be passed, either: (1) by a majority of the creditors owed three-fourths of the total debts of creditors present at the creditors’ meeting; or (2) by at least one group of creditors who are not already presumed to have approved the plan, provided that the total debt owed to the creditor group represents at least 50 percent of the total debt owed to the creditors present at the creditors’ meeting.

Regardless of whether a resolution accepting the plan is passed, the official receiver will report the outcome of the creditors’ meeting to the Court. If a resolution accepting the plan is passed and the Court determines that the resolution is not illegal and agrees with the outcome, it will issue an order approving the plan. Once the Court approves the plan, the rights and duties of the planner will immediately transfer to the plan administrator. Not only will the plan administrator have the right to manage the debtor’s business under the plan, but in some cases, it will have additional rights not previously available to the planner.

Once the reorganization plan has been operational for some time and proves to be successful, the debtor’s executives, plan administrator, or the official receiver are entitled to report the successful outcome to the Bankruptcy Court and request for termination of the business reorganization. If the Court agrees, it may cancel the business reorganization order, at which point the debtor’s directors and authorized director will regain their full rights to manage the business operations and assets of the debtor, unless the plan had altered these rights. Shareholders of the business will also regain their legal rights. This is the point which flailing companies in reorganization hope to attain, and this is the main reason to engage in the reorganization process.

RELATED INSIGHTS​ 

February 25, 2026
Tilleke & Gibbins has updated the Vietnam chapter in the newly released Licensing 2026 guide, published by Lexology Panoramic. The comparative guide provides companies and other interested readers with information on licensing law and practice in various countries around the world. Licensing 2026 provides detailed information on the following topics: Restrictions, laws and licensing arrangements Intellectual property issues: Paris Convention for the Protection of Industrial Property, contesting the validity of licensor’s IP rights, invalidity and expiry of IP rights, security interests, proceedings against third parties, sublicensing, jointly owned IP, first to file, scope of patent protection, trade secrets, copyright Software licensing: Perpetual licensing, legal requirements, user restrictions Royalties and payments, currency conversion, and taxes: Relevant legislation, restrictions, taxation of foreign licensors Competition law issues: Restrictions on trade, legal restrictions, and IP-related court rulings Indemnification, disclaimers, and damages: Prevalence and enforceability of indemnity provisions and contractual waivers of damages Termination: Right to terminate, impact of termination Bankruptcy: Impact of licensee or licensor bankruptcy Dispute resolution: Governing law, arbitration, enforceability, injunctive relief, contractual waivers The Vietnam chapter is available below as a PDF. Readers can gain 30 days of complementary access to the full Licensing 2026 guide and the rest of Lexology Panoramic’s varied offerings through this link.
February 20, 2026
Thailand’s Supreme Administrative Court has issued a decisive ruling annulling the Ministry of Labor’s notification that had granted an exemption for foreign pilots to fly domestic routes under wet‑lease arrangements. A wet lease is a leasing arrangement in which the aircraft is provided together with its foreign flight crew, including pilots, and related operational support, rather than the airline supplying its own pilots. The judgment, delivered on November 17, 2025, and published in the Government Gazette on January 30, 2026, follows a legal challenge brought by the Thai Pilots Association, which argued that the exemption unlawfully enabled foreign workers to assume a role traditionally reserved for Thai nationals. The notification in question, dated December 13, 2024, authorized foreign pilots who came as part of wet‑leased aircraft to fly domestic routes. The Thai Pilots Association disputed the legality of this rationale, asserting that the exemption was triggered by a private airline’s request rather than by any statutory necessity. The Ministry of Labor justified this measure by relying on aircraft‑specific approvals issued by the Ministry of Transport and by enabling the Department of Employment to issue corresponding work permits. Arguments Presented in the Case The Thai Pilots Association argued that the exemption undermined the interests of domestic pilots and conflicted with the policy intent of Thailand’s foreign‑worker regulatory framework. The lawsuit emphasized that the notification arose directly from a private airline company’s request to operate two A320 aircraft under a wet lease and that the measure had the practical effect of displacing Thai pilots who remained unemployed. Meanwhile, the Ministry of Labor defended the exemption as a temporary and necessary response to industry shortages and part of national efforts to support tourism and restore aviation capacity. Legal Framework Thai law establishes a general prohibition against foreign nationals piloting domestic aircraft. Section
February 19, 2026
Thailand’s Securities and Exchange Commission (SEC) has overhauled its approach to related-party transactions (RPTs) by issuing new rules that simplify approval processes while expanding oversight. Capital Market Supervisory Board Notification No. TorJor. 46/2568 will replace the longstanding Notification No. TorJor. 21/2551, which has governed RPT compliance for over a decade. The new regulation takes effect on July 1, 2026. Any RPT matters approved by a company’s board of directors or approved for shareholders’ approval before that date remain subject to Notification No. TorJor. 21/2551. The new RPT rules will introduce significant changes that market participants should carefully consider. Consolidated Definitions Under the previous framework, key definitions relevant to RPT compliance were dispersed across multiple sources, including SEC notifications, Stock Exchange of Thailand (SET) regulations, and provisions of the Securities and Exchange Act (before amendments). The new regulation consolidates these definitions into a single notification. Concepts such as “related party” and “connected person,” as well as relevant transaction categories, are now more systematically organized and written in greater detail. The SET has yet to issue corresponding regulations, which should include more detailed related disclosure requirements. Unified Threshold and Mandatory Board Approval The most significant change under the new regulation is the elimination of the multitiered approval framework based on transaction type. Instead of various categories, transactions are now classified as either (1) financial assistance provided to related persons, or (2) other RPTs in order to determine the level of corporate approvals and disclosures for each transaction size in these categories, but the concept remains the same. Under the previous regulation, RPTs were divided into small, medium, and large transactions, with differing approval requirements. The new regulation effectively merges the small and medium categories. As a result, all RPTs must now be approved by the board of directors as a baseline
February 19, 2026
Thailand’s Securities and Exchange Commission (SEC) has issued a new regulation on material transactions (MTs) to govern asset acquisitions and disposals by listed companies and their subsidiaries. The new notification on MT criteria (No. TorJor. 45/2568) from the Capital Market Supervisory Board replaces the long-standing notification (No. TorJor. 20/2551) that has governed such matters. The SEC has also introduced parallel amendments to the country’s related-party transaction rules. The new regulation will take effect on July 1, 2026. Any MT matters approved by a company’s board of directors for shareholders’ approval before that date remain subject to Notification No. TorJor. 20/2551. Following that date, the new MT rules will introduce several significant changes that market participants should carefully consider. Expanded Scope of Material Transactions One of the key changes under the new regulation is the expansion of the definition of MTs, which now expressly covers financial assistance and certain lease and business lease arrangements that are not in the ordinary course of business of the listed company or its subsidiaries. For financial assistance, this includes lending, granting credit, providing guarantees, or entering into any arrangement that increases the company’s financial obligations, particularly where the recipient is facing liquidity issues or unable to repay debts. Other forms of financial support also fall within scope. However, whether the provision of collateral for others qualifies as an MT remains somewhat unclear, since no disposal of assets occurs for the provider of collateral. This issue remains to be carefully considered. For lease-related transactions, the MT rules now specifically include the lease or hire-purchase of all or part of a business or assets operated by or belonging to a listed company or its subsidiaries. New Exemptions The new regulation introduces clearer exemptions for transactions between a listed company and its subsidiaries or among subsidiaries, which