By Piyawannee Watanasakolpunt and Sudthapa Thanathanya
This is our third and final installment highlighting efforts of the National Council for Peace and Order (“NCPO”) to facilitate business operations in Thailand. The NCPO issued order no. 21/2560 on 4 April 2017 with immediate effect to amend provisions of the Civil and Commercial Code (as discussed in our first installment), the Labour Protection Act, Public Limited Company Act, and Social Security Act (as mentioned in our second installment) and the Bankruptcy Act. A summary of some of the more significant amendments to the Bankruptcy Act are as follows:
- Tighter time limits for secured creditors to enforce rights against secured assets
Secured creditors are now required to enforce their rights against their secured assets of debtor undergoing a reorganization within one year from the date the bankruptcy court issues an order requiring them to take such enforcement action. Secured creditors may request up to two extensions of the enforcement period each no longer than six months, thus giving the secured creditors a maximum of two years to take enforcement action.
- Flexibility for secured creditors to dispose perishable assets
Secured creditors can now dispose of the debtor’s perishable assets that are part of the security and retain the proceeds from such disposal in the event that otherwise maintaining such perishable assets would cause them damage or result in additional expenses in excess of the value of the perishable assets.
- Change to approval of reorganization plan
Approval of a reorganization plan now requires one of the two following resolutions of creditors:
- resolutions of each creditor group (excluding the creditor group under Section 90/46 bis of the Bankruptcy Act) that are approved by (i) a majority of the creditors in such group and (ii) creditors holding at least two-thirds of the debt owed to the creditors in such group who attend the meeting of creditors in person or by proxy and vote on such resolution; or
- resolutions of at least one creditor group (excluding the creditor group under Section 90/46 bis of the Bankruptcy Act) that are approved by (i) a majority of the creditors in such group, (ii) creditors holding at least two-thirds of the debt owed to the creditors in that group who attend the meeting of creditors in person or by proxy and vote on such resolution and (iii) creditors approving the plan must hold at least fifty percent of the debt owed to all creditors across all groups.
- Orders and judgments relating to bankruptcy and reorganization can now be published electronically
The publication by electronic means is subject to regulations prescribed by the Director-General. However, there is no such regulation at the moment.