Pandemic workout: How to master the corporate crisis in Thailand

Out-of-court debt relief as a better alternative to bankruptcy, composition and business reorganization

CoronaAlliance: The (at least temporary) closure of many lines of business leaves many business owners with currently no or almost no income. Government aid will only be paid out hesitantly if it comes at all. If the measures are in fact only temporary, their removal will not restore the status quo ante. High pressure to adapt to the post-pandemic situation remains unavoidable. Restructuring requires financial means that were not accumulated but eaten up during the crisis period. Many companies will therefore not be able to continue to meet their current obligations, even though there is actually a positive forecast for their continuation. #CoronaAlliance

PUGNATORIUS Ltd. assists in the immediate examination of the need for legal action, the selection of the available options, as well as in the preparation or implementation of unavoidable measures. This includes the utilization of governmental support and aid measures as well as the tax-efficient structuring of the current and future business activities.


The insolvency of a Thai Co., Ltd. is governed by Thailand’s Bankruptcy Act and the provisions of the Civil & Commercial Code. They cover bankruptcy, composition, and formal business reorganization. The Central Bankruptcy Court in Bangkok is the competent body for such proceedings. The entry barriers are pretty high, for example by a THB 2 million threshold debt amount and the impossibility for the debtor to file bankruptcy by himself.

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A consensual restructuring can be accomplished outside of the Bankruptcy Act and without a full judicial intervention. It can include measures that restructure the debtor’s business (operational restructuring), and measures that restructure the debtor’s finances (financial restructuring). An out-of-court restructuring (“Workout”) has the objective to minimize the costs, reputations loss and collateral damages of a company in difficulties, including illiquidity or insolvency.

Hybrid solutions: Although the workout generally constitutes an alternative to a formal insolvency procedure, as the case may be, informal restructures can operate as a complementary element to formal insolvency procedures in a hybrid strategy. The advantages and disadvantages of informal workouts compared to formal insolvency proceedings, have to be considered in each particular case to identify the best exit strategy to the situation of financial difficulty.

Seven professional services to master a corporate crisis in Thailand

PUGNATORIUS Ltd. is the Bangkok-based specialist provider of transactional legal and tax advice on foreign investments in Thailand’s manufacturing and service industries as well as property transactions and developments. The law firm offers to directors and shareholders of Thai corporations especially these professional services:

#1. Confidential analysis of the corporate strategy to chose between formal bankruptcy, compositions and business reorganization in comparison to informal steps for a corporate workout and debt relief.

#2. Preparation of a settlement proposal for the consensual debt composition of failing Thai Co., Ltd. where appropriate with fresh share-holder money, offshore funds, trustee, middle man, mediator

#3. Even confrontational and multi-party out-of-court negotiations and procedural steps with creditors and employees. Avoidance of (co-) liability risks based on fraud, tort, and undue preference, as well as the director’s liability.

#4. Drafting of compromise and settlement agreement under the particular observation of validness and effectiveness regarding worker’s compensations and customer protection rules. If appropriate, hybrid procedures consisting of private restructurings complemented by minor judicial or public interventions.

#5. Professional legal project management of the whole workout procedure for foreign clients resident abroad. With the main focus and priority on a short and much more private process, less reputational damages and stigma by a continuation of the client’s business.

#6. Comprehensive legal advice and transaction support for the liquidation of the Thai Co., Ltd. without the need for the foreign investor to show-up at Thai government offices or courts.

#7. Representation of (groups of) creditors and employees in bankruptcy cases, composition procedures, business reorganizations, and informal restructurings.

In Thailand, informal workouts are procedures that are not fully disconnected from any kind of judiciary intervention. The superior flexibility and velocity in dealing with the debtor’s financial difficulties should not be overestimated. Sophisticated legal advice is of cardinal importance.


Disclaimer: A little knowledge is a dangerous thing. This low-resolution high-level outlook constitutes neither legal advice, nor an attorney-client relationship, nor equips with the insights, tools or skills to do this without the CoronaAlliance. Don’t wait for the storm to pass, learn to dance in the rain.

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