Thailand Law Journal 2010 Spring Issue 1 Volume 13

4.2 Qualifications

The private bankruptcy administrator should have a Bachelor of Law or Accountancy or a business administration degree. He/she should be of Thai  nationality, be over twenty five years of age at the time of application filing, have at least three-year working experience in a field related to bankruptcy law, corporate law, accountancy, business administration or finance, have never been put under the receivership order, have a good credit record and have no criminal record except for those committed negligently or petty crimes. The juristic person can also file an application for a bankruptcy administrator license as well. Such juristic person must clearly state its purpose to give financial, accountant or legal counseling: be in the asset management business; must have at least three full-time personnel, all of them must have at least the same qualifications as required if the applicant is a natural person. Furthermore, the executives of such juristic person must never perform his/her duties in an illegal and dishonest manner. The juristic person must have reliable and efficient business practices as well.

However, there is some concern that there could be a conflict of interest if we allow lawyers and accountants as a private trustee at the same time because lawyers and accountants working in this area are limited in number and their previous work might have been related to that of the creditors in one way or other. Nevertheless, with the current manpower shortage, lawyers and accountants should be able to perform their jobs while working as the private bankruptcy administrator simultaneously. There is no need to set a private bankruptcy administrator as an independent profession; a regulation just needs to be set up concerning conflicts of interest between the private administrator and the debtor or other interested parties. The administrator must withdraw from administering the case or face removal from the case with sanction.

4.3 Admission to the profession and terms of working

The intended private bankruptcy administrator must submit his/her application with supporting documents to the Legal Execution Department (LED) for consideration. The LED should set up a Selection Committee ("The Committee") to review an application. The Committee should include the Director-General of the LED as the President of the Committee, a representative from the Certified Accountants and Auditors of Thailand, a representative from the Office of the Securities and Exchange Commission, a representative from the Law Society of Thailand, a representative from the Ministry of Commerce, a representative from the Ministry of Finance, a representative from the Thai Chamber of Commerce, a representative from the Thai Bankers @ Association, a representative from the Federation of Thai Industries, and five other committees appointed by the Minister of Justice who have specialty in the areas of accountancy, business, finance or law as well as one Director of the Bankruptcy Division at the LED as a committee member who would also serve as secretary of the committee.

The Committee should look into the applicant's general knowledge, expertise in business or asset management, personality and other general requirements. Within 60 days of the interview, the Committee will decide whether or not to register an applicant as a bankruptcy administrator and provide reasons for its decision. If the applicant is not satisfied with the Committee's decision, they may appeal to the Minister of Justice. The Minister of Justices decision is final. For a successful applicant, the LED will issue a certificate of registration for a period of three years. This term is renewable upon satisfaction of all the designated qualifications. The administrator's name, preferred contact details or firm details are registered on the LED website for public use. The bankruptcy administrator must also pay an annual fee to the LED. Such amount will be stipulated in the Ministry of Justice Ministerial Rules.

In considering the extension of the license, the Committee will assess all the past performance of the administrator. If the administrator has performed his/her duties according to the Bankruptcy Act as well as related regulations, the Committee will extend the terms of working for another three years. On the other hand, if the administrator fails to obey the rules or does not comply with any LED orders, the Committee can terminate the license or extend such terms by less than a period of three years.

4.4 Training

There should be training provided by the LED for the new private bankruptcy administrator. The program should include knowledge on civil procedure and bankruptcy and reorganization laws as well as related commercial and business laws, LED regulations on the execution of civil-case judgment procedure and bankruptcy and reorganization case administration, the management of debtor’s assets and debtor’s business, verification of the creditor's repayment claims and making a periodic report to the LED. The LED can require all the private bankruptcy, administrators to have additional training whenever there is a law or regulation proposed or enacted as it deems fit.

4.5 Work assignment

In the US, bankruptcy cases are randomly distributed to the private bankruptcy trustee by the US Trustee. The trustee gets both the asset and no-asset cases. However, in the Commonwealth of Australia, for no-asset cases, an Official Trustee from the Insolvency and Trustee Service Australia (ITSA). which is a government body, administers such case. For Thailand, the private bankruptcy administrator should only be in charge of asset cases only and all no-asset cases should be handled by the official receivers of the LED. The assignment of asset cases amongst the private administrators would be in a random manner. By having asset cases, the private bankruptcy administrator should be motivated to search for additional properties of the debtors and maximize their value so that they would get more realization percentage from the assets found and sold. The creditors, in turn, would certainly be happy because they would receive more dividends.

As regards no-asset cases, the current amount of official receivers should be able to cope with the number of no-asset cases. In addition, the procedure for the no-asset case is far less complicated than the asset one and does not concern many parties. The official receiver processes the case according to the Bankruptcy Act by examining the debtor, asking the court for a bankruptcy judgment, a closure of the case order and the termination of bankruptcy judgment or discharge order. With this division of cases, job security can be provided for some of the present official receivers. Not all of them will have to transfer to work in the private sector or to other government agencies because there are fewer positions at the LED.