Answer ... (a) Debtor
Once the court has issued a receivership order against the debtor, the debtor’s power to undertake any act in relation to its property or business will cease and will be transferred to the receiver. The debtor will also be required to take the following actions:
- deliver all property, seals, account books and documents relating to its property and business which are in its possession to the receiver upon becoming aware of the receivership order;
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appear and take an oath before the receiver to confirm:
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- whether it has entered into any partnerships;
- its business and property;
- the reason for its insolvency;
- its assets and liabilities;
- the names, addresses and occupations of creditors;
- property given to creditors as security;
- details of property which will vest in the debtor at a future date;
- where the debtor is an individual, property of the spouse; and
- property of other persons in the debtor’s possession;
- attend every creditors’ meeting and answer questions posed by the receiver;
- assist in the disposal and distribution of property among all creditors as and when required by the receiver;
- declare the revenue and expenses account to the receiver every six months; and
- not leave Thailand without written permission from the court or the receiver.
(b) Directors of the debtor
The liability of directors is separate from that of the company. However, if the receivership order is made against a registered ordinary partnership or a limited partnership, the creditor or receiver may file a petition to adjudge bankrupt any partners with unlimited liability in the partnership without instituting a new action.
Once the court has issued a receivership order, the powers of the director relating to the debtor’s property and business will cease and will be transferred to the receiver.
(c) Shareholders of the debtor
The shareholders’ liabilities are strictly limited to the full payment of subscribed shares in the company.
(d) Secured creditors
A secured creditor has rights over property given as security by the debtor prior to the receivership without any need to file an application for repayment of debt, but must allow such property to be examined by the receiver.
However, a secured creditor may file an application for repayment of debt under the following conditions:
- When agreeing to relinquish the property given as security for the benefit of all creditors, it may file an application for repayment of debt in full;
- Where enforcement has been made against the property given as security, it may file an application for repayment of debt in respect of the outstanding amount;
- Where a request has been made to the receiver for the sale by auction of the property given as security, it may file an application for repayment of debt in respect of the outstanding amount; and
- Where a valuation of the property given as security has been made, it may file an application for repayment of debt in respect of the outstanding amount. In such case, the receiver has the power to redeem the property at such price.
(e) Unsecured creditors
An unsecured creditor – whether the plaintiff creditor or not – may file an application for repayment of debt within two months of publication of the court order appointing the receiver, if the cause thereof arose prior to the date of the receivership order, even if such debt has not yet fallen due or is subject to conditions. However, if the creditor is outside Thailand, the receiver may grant an extension for up to two months.
(f) Administrator
The administrator is the receiver, who is a government official.
(g) Employees
Employees whose employment is terminated may claim for severance pay and payment in lieu of notice. Employees must file an application for repayment of debt in the bankruptcy proceedings.
(h) Pension creditors
Under Thai law, there is no specific remedy for pension claims against employers in bankruptcy proceedings. Pension creditors must file an application for repayment of debt in the bankruptcy proceedings.
(i) Insolvency officeholder
Once the court has issued a receivership order, the debtor’s powers to undertake any act in relation to its property or business will cease and will be transferred to the receiver, who will manage the debtor’s property for distribution among all creditors (see question 4.4).
The receiver’s duties include the following:
- to convene the creditors’ meetings;
- to collect applications for repayment of debt;
- to give notice to related parties in proceedings; and
- to report to the court for further proceedings.
(j) Court
Bankruptcy proceedings are court-supervised proceedings aimed at realising the assets of the debtor in order to distribute the proceeds among its creditors.
The court will schedule one or more hearings to conduct an inquiry on the bankruptcy petition, a public examination of the debtor, composition, cancellation of bankruptcy and others at the request of the receiver or the debtor, as the case may be.
The court generally assumes a supervisory role and the receiver has a duty to report to the court, which may provide directions to the receiver upon request.