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

January 8, 2016

Reorganization: Business Survival During a Crisis

Subscribe to Updates
Bangkok Post, Corporate Counsellor Column

Thailand is no stranger to tumultuous events, be it unrest in the Deep South, widespread flooding, economic slowdowns in trading partners, domestic protests, exchange rate instability, global economic crises, or flailing tourism.

Inevitably, businesses and often entire sectors are directly affected by these events. Businesses do not exist in isolation, so one or more companies facing cash-flow problems can begin a chain reaction of accounts receivable and accounts payable rippling outward. With short-term credit increasingly difficult to come by, companies become trapped in a vicious circle, losing the ability to invest in developing new sources of revenue and using any cash generated to repay old debts.

One possible way to address this problem is reorganization—a process that sounds the death knell for some, but to debtors, a potential solution. This process, authorized under Thailand’s Bankruptcy Act, provides a means for a company to protect itself from creditors while being allowed to operate.

Under the reorganization process, once the Bankruptcy Court accepts a company’s petition—the company being the debtor—all its outstanding debts are frozen. This “automatic stay” ensures the debtor will be protected under bankruptcy law from debt collection efforts by creditors.

During an automatic stay, the debtor may continue to operate, subject to certain restrictions—for example, it may not dispose of, distribute, transfer, pay debt, create debt, or act in any way that may encumber its assets except as necessary in the ordinary course of business or as permitted by the court.

Creditors also receive a measure of protection. Debtors are not allowed to treat any creditors preferentially by paying off specific debts to one creditor and leaving fewer assets for others. Creditors or government agencies can also submit a reorganization petition on behalf of a debtor in order to obtain this protection.

The following is a summary of the criteria a company seeking protection during reorganization must meet as well as the process involved.

Persons Entitled to Submit Reorganization Petitions

The following persons or parties are entitled to submit reorganization petitions:

  • A single creditor or group of creditors owed not less than THB 10 million; and
  • Government agencies such as the Bank of Thailand, the Insurance Department, and the Securities and Exchange Commission.

Principles of Reorganization Petitions

The following criteria need to be met:

  • The debtor is insolvent and indebted to one or more creditors for an amount not less than THB 10 million regardless of whether such debt is already due;
  • There are sufficient grounds to believe the debtor’s business can be successfully reorganized; and
  • The petitioner is honest in submitting the petition.

Court Hearing

Once the Bankruptcy Court determines the petition meets the basic legal requirements, it will schedule a hearing and take evidence to determine whether to approve reorganization. If the court does not accept the petition, it will dismiss the case, and the company will not be granted protection from its creditors.

Appointing the Planner

Once the court approves a reorganization, it will appoint a planner to prepare and submit a business reorganization plan. After the planner is appointed, the official receiver will publish the court’s reorganization order in the Royal Gazette and in two widely circulated daily newspapers. All creditors must submit debt repayment applications to the official receiver, which will evaluate them and render an order as to voting rights in approving the reorganization plan.

Planner’s Duty and Rights

The planner has a duty to draft the reorganization plan and is empowered to refinance, restructure and reduce debts as it deems necessary. It must submit the plan to the official receiver.

Creditors’ Meeting

After receiving the reorganization plan, the official receiver will hold a creditors’ meeting to discuss and approve the plan by a special resolution. The official receiver will report the outcome to the court. If a resolution accepting the plan is passed and the court agrees and finds the resolution is not illegal, it will issue an order approving the plan.

Plan Approval

Once the court approves the plan, the rights and duties of the planner will immediately transfer to the plan administrator, who has the right to manage the debtor’s business under the plan.

Successful Plan Administration

If the plan is successful in rehabilitating the debtor, the court may order a cancellation of the business reorganization order, at which point the debtor, its directors, and shareholders will regain control over the business. A successful reorganization benefits all stakeholders.

Reorganization can be a lifeline for a business struggling due to factors beyond its control, providing it with protection and, most importantly, time to get back on its feet. But reorganization is not always the right solution, as it may have far-reaching effects beyond the immediate protection. Each business facing difficulties must carefully evaluate its options on an ad hoc basis.

Download Full Article
Related Professionals

Practices

Corporate/M&A

Dispute Resolution and Litigation

Location

RELATED INSIGHTS​ 

August 18, 2026
The Bank of Thailand (BOT) is seeking public comment on proposed amendments that would significantly expand know-your-customer (KYC) and customer due diligence (CDD) requirements for cash-related transactions at financial institutions (FIs) and specialized financial institutions (SFIs). Released on August 5, 2026, the proposed regulation would supersede BOT Notification No. 16/2569, which focused primarily on cash withdrawal transactions. The public comment period is open through September 3, 2026. The amendments reflect concerns that FIs and SFIs may be used to facilitate the movement, concealment, and conversion of criminal proceeds, potentially damaging institutional operations and public confidence in the financial system. Expanded Scope of Covered Transactions The most significant change is the broadening of the definition of “cash-related transactions.” Previously, the regulation covered only cash withdrawals and uncrossed check withdrawals. The amended regulation extends coverage to include: Cash deposits, check deposits, or receipt of funds from the public not in the form of deposit accounts; Thai baht (THB) banknote exchange (different denominations); Receipt of cash for issuing checks and drafts; and Purchase, sale, or exchange of foreign banknotes. Mandatory Identity Verification and Risk Management For all cash-related transactions, FIs and SFIs must require customers, or authorized or delegated persons, to present identification or verify their identity before every transaction, including one-time (walk-in) transactions. Specific identification requirements vary by transaction type, customer nationality, and channel (branch vs. electronic). FIs and SFIs must also establish comprehensive risk management processes and procedures for cash-related transactions. These requirements include identifying customers or authorized representatives in accordance with transaction-specific verification standards, analyzing customer behavior, implementing risk-management measures proportionate to the customer’s risk profile, and recording abnormal behavior in relevant systems. The BOT also encourages institutions to proactively guide customers toward transaction channels that offer greater traceability than cash. For corporate customers in high-risk business sectors—including foreign
Read More
August 18, 2026
Securing a favorable judgment is often only the midpoint of a dispute. For businesses and investors, the more important commercial question is whether that judgment can be converted into actual recovery. In Thailand, this typically requires the judgment creditor to enforce the judgment through the Legal Execution Department by seizing, attaching, auctioning, or otherwise executing against the judgment debtor’s assets. Thailand’s schedule of these enforcement fees was last revised by an amendment to the Civil Procedure Code that took effect in September 2025. The Civil Procedure Code Amendment Act (No. 33) B.E. 2568 (2025) updated the schedule of execution officer fees listed in table 5 of the Civil Procedure Code. While the amendment did not eliminate the costs associated with enforcement, it lowered several key execution officer fees and abolished certain fees that previously applied even where enforcement did not ultimately result in the sale or disposition of assets. The reform is intended to reduce the financial burden associated with judgment enforcement and remove unnecessary obstacles to settlement once enforcement proceedings have commenced. As a result, it has practical implications not only for judgment creditors seeking to maximize recovery, but also for debtors considering settlement after enforcement has begun and for businesses and investors assessing litigation and credit risk in Thailand. Key Changes The amendment introduced several changes to the execution officer fee structure. First, where seized or attached assets are sold by public auction or otherwise disposed of, the execution officer fee has been reduced from 3% to 2% of the sale or disposition proceeds. This fee remains separate from announcement costs and other out-of-pocket expenses incurred during the enforcement process. Second, where seized or attached funds are paid to a judgment creditor, the execution officer fee has been reduced from 2% to 1% of the amount recovered.
Read More
August 11, 2026
Cambodia’s Ministry of Justice has launched a new platform on its official website to publish notices of forced sales issued by each municipal and provincial court of first instance. The platform’s stated purpose is to inform the public and facilitate greater participation in forced-sale auctions conducted in connection with court-ordered enforcement proceedings. How the Platform Works The platform publishes forced-sale notices from courts of first instance across Cambodia’s municipalities and provinces and includes a link where the public can view properties currently subject to forced sale. To participate in a forced-sale auction, individuals can download Khmer-language bidding application forms through links provided on the platform. The form typically requires the applicant’s name, sex, year of birth, identity card number and issue date, and address, together with details identifying the immovable property (including its ownership certificate number), the relevant enforcement case number and date, and the reference to the public auction or tender announcement issued by the court. Completed application forms must be submitted directly to the specific municipal or provincial court that issued the forced sale. For further inquiries about a particular forced sale, interested parties should likewise contact the relevant municipal or provincial court. Forced Sale of Immovable Property in Cambodia The publication of these notices relates to the forced sale procedure for immovable property under Cambodia’s Code of Civil Procedure (CPC). Unlike property seizure by a court, a forced sale is a compulsory execution proceeding—a subsequent enforcement step that arises only after an underlying dispute has been adjudicated and a debtor fails to pay the debt or outstanding amount due under a final and binding judgment or other enforceable title of execution. For the purposes of this procedure, the term “immovable property” under the CPC refers to land, registered buildings, jointly held shares of such property, registered
Read More
August 6, 2026
Every month, VAT-registered businesses in Thailand calculate their output and input VAT and file a return to pay the net amount due or claim a refund. Yet a common and costly dispute arises when a business that has paid input VAT to its supplier—and done everything asked of it—later finds that input VAT rejected on the grounds that the tax invoice was issued by “a person not entitled to issue tax invoices.” In these cases, a buyer may have confirmed the supplier’s VAT registration on the Revenue Department’s website, paid through the banking system, received a complete tax invoice, and kept full payment and inventory records. Even so, if the Revenue Department later determines that the supplier did not genuinely make the sale or collected the VAT without remitting it, the department can disallow the input VAT and assess additional tax, surcharge, and penalty—often more than a year after the transaction. A new article from tax and dispute resolution specialists at Tilleke & Gibbins in Bangkok examines how the Revenue Department and the courts approach these disputes, including two recent Supreme Court (Tax Division) decisions confirming that the taxpayer bears the burden of proving a supplier genuinely sold and delivered the goods and received payment. It considers why the VAT registration system offers no legal safe harbor, why the evidentiary burden falls hardest on online and cross-border transactions where buyers and sellers never meet, and how the Revenue Department’s own digital infrastructure could detect non-remitting suppliers at the source rather than shifting the loss to good-faith buyers. The article also sets out practical guidance: how to build a comprehensive “know-your-supplier” file at the time of a transaction, the procedural steps and strict deadlines for challenging a VAT assessment, and why dispute readiness belongs alongside tax planning at the center
Read More