Bangkok Legal Service

Subsequently, the court ordered the rehabilitation of the debtor s business and appointed the debtor as the rehabilitation plan maker. In this role, the debtor was authorized to prepare a rehabilitation plan for the debts of Company . The rehabilitation plan, known as Plan , was created by a creditor under the purchase agreement where the debtor acquired raw materials for eight million baht, with a bank acting as guarantor for the debt. The plan stipulated that the debtor would pay three and a half million baht for the raw materials, without interest, and would be released from the guarantee agreement under Section 44. At the meeting of creditors to consider the plan, Company . disagreed with these conditions and formally objected. However, the majority of creditors voted to approve the plan, which was then submitted to the Receiver for review. During the court s consideration of the plan s approval, Company . s objection was rejected. The respondent argued that the rehabilitation plan maker had the authority to set such conditions, as outlined in Section 2483 of the Bankruptcy Act. This section allows the plan maker to establish the principles and methods for business rehabilitation, including debt payment terms, debt collection schedules, debt reduction, and creditor rights. Specifically, the court found that the debtor s stipulation that Company . would receive three and a half million baht, without accrued interest, was permissible under the Bankruptcy Act, Sections 9 and 90/42. Regarding the objection concerning the release of the bank, the guarantor, from liability under the guarantee agreement, the court determined that this stipulation was a required element of the rehabilitation plan, as stipulated in Section 90/42. The court issued an order under Section 90/58 (1) of the Bankruptcy Act, approving the plan and modifying the guarantor s liability, consistent with Section 90/60, paragraph two. Therefore, the rehabilitation plan stipulated the release of the guarantor from liability under the guarantee agreement. This stipulation was deemed contrary to Section 90/42 (5 points) and void, as it conflicted with the good morals and principles of the Civil and Commercial Code, Section 150. Despite the void stipulation regarding the guarantor s liability, the guarantor remained liable to the creditor under the guarantee agreement for the outstanding debt, as supported by Section 90/58, paragraph two of the Bankruptcy Act. The court approved the plan, and consequently, dismissed Company . s objection. This decision aligned with the terms of the rehabilitation plan.