Commercial and Residential Property, Lease and Mortgages.
The amendments to the Bankruptcy Act of Thailand
On 26th August 2015, the amendments to the Bankruptcy Act of Thailand were published in the Royal Thai Government Gazette as codified in the Bankruptcy Act (No. 8) B.E. 2558 (A.D.2015) (“Amendments”). The Amendments were effective on 27th August 2015. However, the New Bankruptcy Act shall not apply to cases submitted to the Court before the effective date of the New Bankruptcy Act (26th August 2015) as well as those cases which are already proceeding in Court or are in the process of being executed.
We can summarise the Amendments as follows:
- Amending the procedure of claims for repayment of debts
- One of the key purposes of the Amendments is to speed up the procedure of claims of the creditor for repayment of debts by debtors under bankruptcy.
- Under the Amendments, the Receiver is authorised to consider and examine the creditors’ claims for debt repayment and then issue its order on such claims (previously, the Receiver only had authority to review the claims for debt repayment submitted by the creditors and give its opinion on such claims to the Court for further adjudication).
- The Amendments also provide a mechanism for interested persons who disagree with the aforementioned order of the Receiver by submitting an objection to the Court within 14 days after becoming aware of the Receiver’s order for the Court’s further adjudication.
- Allowing the creditor the ability to submit claims for debt repayment after the prescribed period
- Generally, the law requires a creditor to file a claim for debt repayment with the Receiver within 2 months from the date that order of absolute receivership is published. This can only be extended for an additional 2 months if the creditor resides overseas.
- However, in addition to the aforementioned period, the Amendments also gives flexibility to the creditor facing force majeure events. Now, a creditor who is facing delay attributable to a force majeure event, is granted the opportunity to submit the claim at a later time. In this case, the creditor will be entitled to be repaid from the remaining assets of the debtor after the distribution of debtor’s assets to the creditor(s) who submitted the claims within the prescribed period and this claim shall not impact any action previously taken by the Court, the Receiver and the creditors’ meeting.
- Increase of penalties
- As the penalties stated in the previous Bankruptcy Act were not consistent and inappropriate for the current economic conditions , the Amendments provide a revision of the penalties in several sections of the Bankruptcy Act