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Thailand's bankruptcy laws allow for reorganization of still-solvent companies.

The Thailand Bankruptcy Law provides for the reorganization of companies that hope to avoid liquidation in the face of heavy debt. The modern version of the law created a specialized court for hearing bankruptcy petitions and gives debtors and creditors the opportunity to resolve financial issues while allowing the continuing operation of the debtor company.
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History

While Thailand's system of laws included bankruptcy provisions for hundreds of years, they were largely pre-industrial and did not adequately serve the needs of a modern developed economy. Early bankruptcy laws leaned heavily on debtors and did not give them much leeway in the proceedings. In 1940, Thailand passed the Bankruptcy Act which helped modernize the nation's bankruptcy laws. However, the law lacked an adequate process for a troubled entity to be reorganized and restructured. The 1940 law was amended in 1968 and 1983, but these amendments mostly just changed the amount of debt required before a bankruptcy proceeding could be initiated.

Modern Developments

Following the Asian financial crisis of 1997, the Thai government saw the need for more up-to-date bankruptcy laws and Thailand passed new amendments in 1998 and 1999 that addressed reorganization. The new amendments went a long way to furthering the purpose of corporate bankruptcy laws, which is to avoid a debtor from being liquidated if the entity still has sufficient value. The amended Bankruptcy Act permits entities to be restructured by the court in a way that would allow it to continue to operate while working to satisfy creditors. One of the most significant provisions in the amendments was the creation of the Bankruptcy Court, which specializes in bankruptcy petitions.
Petition

A creditor, government agency or the debtor itself can petition for bankruptcy protection under the law. The Bankruptcy Court will then decide if the company is solvent and qualifies for bankruptcy or if it should be liquidated because the amount of debt eliminates any potential for future operation. If the company qualifies for reorganization, the debtor will receive an automatic stay of collections activities and be allowed to continue to do business during the proceedings.

The Planner

Whoever petitions for bankruptcy--usually the creditor or the debtor--may appoint a planner. If the planner is not acceptable to the other party, they may veto that planner and nominate their own. The function of the planner is to develop a reorganization plan to be drawn up with three months of the court's decision while ensuring continued business operating. The debtor company's directors are required to provide all data and information--such as company documents and asset information--necessary for development of the plan and may be fined or even imprisoned for failing to comply to do so.

Approval and Management

After the plan is completed, the planner must present it to the court and to the creditors who then vote on it. If approved, the creditors create a committee for the purpose of overseeing implementation of the plan, and a plan administrator is also appointed to manage the company during the proceedings. The court is also greatly involved in the proceedings and can make inquiries and issue orders related to the reorganization. They are limited, however, by the 1999 amendment which restricts the degree to which they can interfere with an approved plan.


Read more: Thailand Bankruptcy Law | eHow.com http://www.ehow.com/about_6589763_thailand-bankruptcy-law.html#ixzz1mUwnSTIL