Thailand Legal Basics: Bankruptcy and Restructuring

Tilleke & Gibbins

December 14, 2011

In 1998, Parliament approved the first amendment to the 1940 Bankruptcy Act in 15 years, and further amendments were made in both 1999 and 2000. These amendments reduce the bankruptcy period from ten years to three years and allow for the restructuring or reorganization of a company, similar to Chapter 11 provisions in the United States. The law sets forth the process of maintaining the viability of a distressed company by setting up a legal structure to maintain the debtors’ assets and to rehabilitate its business on the one hand, while protecting the interests of the creditors, old and new alike, on the other. It had long been of concern that Thai courts may not have had the capacity or expertise to take on the immense volume of work and had no specialized branch to deal with business restructuring until 1999. As has been shown in the relatively swift resolution of complicated bankruptcy cases, however, this concern was largely unfounded.