In Thailand, the main rehabilitation procedure is a business reorganization (Section 90 of the Bankruptcy Act). A business reorganization is a form of bankruptcy that involves a rehabilitation of a company’s business affairs, debts, and assets, and for that reason is known as a “reorganization” bankruptcy. This version of bankruptcy gives the company a fresh start.
However, this new start is subject to the company fulfilling its obligations under the plan of rehabilitation. The aim is always to resolve the financial difficulties of a company by allowing the company to continue engaging in business and thereby preserve greater value for creditors and investors.
Part of this process, under court supervision, may involve reviewing existing contracts for overly burdensome obligations as well as adjusting repayments on obligations and the “clawback” of preferential payments.
The steps outlined below are a summary of the usual steps for a business rehabilitation under the Thai Bankruptcy Act for restructuring as “Debtor in Possession”.