With no more flights to the US, THAI may not need to seek protection under Chapter 11

[webfact]

With no more flights to the US, THAI may not need to seek protection under Chapter 11

By The Nation

 

 

Thai Airways International (THAI) may not need to seek protection under Chapter 11 of the Bankruptcy Code in the United States, a senior official said after a meeting led by Deputy PM Wissanu Krea-ngam on Monday (June 1) with senior THAI officials and the airline’s board.

 

The meeting was held to discuss the airline’s rehab plan after the Central Bankruptcy Court accepted its bankruptcy protection case on May 27. 

 

Prapas Kong-led, director general of the State Enterprise Policy Office, said the airline will send copies of the rehabilitation petition to its creditors, passengers who seek refunds on their tickets and members of the Royal Orchid Plus frequent flyer programme. 

 

As of last year, THAI’s total debts were worth Bt147.4 billion, with the largest chunk or Bt74.1 billion owed to investors holding its debentures, followed by Bt46.5 billion owed for the leasing of planes and euro-denominated loans worth about Bt11.9 billion. 

 

If creditors allow the rehab process to go via Thai courts, then THAI will not need to seek bankruptcy protection in the US, he said. 

 

According to its legal adviser, THAI may not need to file bankruptcy in the US as it does not have any assets in the United States and it is not scheduling any flights to the US either. Hence, there is no risk of its airplanes being seized by creditors there. 

 

However, the legal advisers said, the airline may need to file legal cases in other countries where it has assets and operates flights, so it can protect its planes from being confiscated by creditors.

 

Airplanes operated by THAI are divided into two groups – those owned by the airline, and those leased from other companies. 

 

The creditors of the leased planes may exercise their right to seize the aircraft if they do not agree with the rehab plan. Other creditors, however, cannot take the planes unless they file and win a lawsuit.

 

“Our priority is to convince foreign creditors that they should accept the airline’s rehabilitation under Thailand’s Bankruptcy Court,” Prapas added.

 

Source: https://www.nationthailand.com/business/30388897

 

-- © Copyright The Nation Thailand 2020-06-02

 

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[rkidlad]

32 minutes ago, webfact said:

“Our priority is to convince foreign creditors that they should accept the airline’s rehabilitation under Thailand’s Bankruptcy Court,” Prapas added.

Why on earth would any foreign creditors look at any of this and think, "oh, yea. I should have faith in these people". Your reputation precedes you in the outside world. 

[Misterwhisper]

1 hour ago, rkidlad said:

Why on earth would any foreign creditors look at any of this and think, "oh, yea. I should have faith in these people". Your reputation precedes you in the outside world. 

Looks like those foreign creditors just got Thai'd.

[smedly]

3 hours ago, webfact said:

The creditors of the leased planes may exercise their right to seize the aircraft if they do not agree with the rehab plan. Other creditors, however, cannot take the planes unless they file and win a lawsuit.

 

“Our priority is to convince foreign creditors that they should accept the airline’s rehabilitation under Thailand’s Bankruptcy Court,” Prapas added.

so they can't seize them in Thailand or demand the return of leased planes 

 

sounds like Thailand is doing its best to get out of paying what they owe and not returning what doesn't belong to them

 

what a mess

 

how about a lawsuit against the directors and those responsible for creating the mess in the first place and also CV-19 did not create this debacle, Thai was going down the tubes for a long time 

[Laza 45]

3 hours ago, rkidlad said:

Why on earth would any foreign creditors look at any of this and think, "oh, yea. I should have faith in these people". Your reputation precedes you in the outside world. 

..because if they push for bankruptcy they will definitely lose everything.. if they allow Thai to keep trading there is a possibility that they may get some or all money back.. in time.. what would you choose?    

[Rimmer]

A post has been removed, please be very careful what you post....

[rkidlad]

2 minutes ago, Laza 45 said:

..because if they push for bankruptcy they will definitely lose everything.. if they allow Thai to keep trading there is a possibility that they may get some or all money back.. in time.. what would you choose?    

Well, if wishful thinking means there’s a possibility I could get all that I’m owed back, I choose wishful thinking. 
 

Will my odds increase if I ignore reality and cross my fingers? 

[RtotheC]

So basically they aren't flying to the US so they can't seize their planes. Smart choice. Not the moral one. But smart none the less.

[JCP108]

This also seems to indicate they aren't going to fly to the U.S. in the future, too. 

[Bender Rodriguez]

4 hours ago, webfact said:

As of last year, THAI’s total debts were worth Bt147.4 billion, with the largest chunk or Bt74.1 billion owed to investors holding its debentures, followed by Bt46.5 billion owed for the leasing of planes and euro-denominated loans worth about Bt11.9 billion. 

now that is good management

 

they only need to ask for more BILLIONS tax payer each year

 

and the elite & their families could fly for free all over the world

 

and maybe stay for free in THAI owned properties 

[robblok]

49 minutes ago, smedly said:

so they can't seize them in Thailand or demand the return of leased planes 

 

sounds like Thailand is doing its best to get out of paying what they owe and not returning what doesn't belong to them

 

what a mess

 

how about a lawsuit against the directors and those responsible for creating the mess in the first place and also CV-19 did not create this debacle, Thai was going down the tubes for a long time 

You act like its a Thai thing.. its how all companies work when they get bankrupt and file for it. They try to negotiate a settlement with the creditors. This is the norm. i guess you have no idea how it works with large businesses and bankruptcy. 

[PETERTHEEATER]

Judging from the numbers of Thai flagged aircraft parked at Suwanabhumi they flew all their assets back here before filing for bankruptcy.

[Thaidaddy]

Thai do not fly into the US because they are banned, and have been for a couple of years because they cant meet US safety regulations. The fact that government officials even thought they needed to file under Chapter 11 shows how poor there understanding of the Thai rehab laws are. The reality is that any (leased) Thai plane landing anywhere in the world can be impounded as they dont have to follow Thai law.  Lease creditors therefore have a strong bargaining position in the Plan which means other (unsecured) creditors will suffer. If that means the credit union members then the government is going to have major problems at the next election. 

[phkauf]

THAI hasn't flown to the US in maybe 10 years so that excuse is nonsense. THAI debt held by some of the leasing companies most likely is under US Law so they would ABSOLUTELY need to file in the US or just hand back the planes to avoid that. Also if THAI entered into any aircraft lease securitization that would also be under US Law, but I doubt they did that.

They want to avoid filing BK in the US at all costs since the US Bankruptcy Court will have zero tolerance for the type of shenanigans they can pull off in Thailand.

If THAI were to play games with the leasing companies, those aircraft could never leave Thailand at risk of being impounded. Imagine getting stuck at an airport in Europe with no plane to take you home is not good for business.

This will be fun to watch.

[Captain Monday]

1 hour ago, Thaidaddy said:

Thai do not fly into the US because they are banned, and have been for a couple of years because they cant meet US safety regulations. The fact that government officials even thought they needed to file under Chapter 11 shows how poor there understanding of the Thai rehab laws are. The reality is that any (leased) Thai plane landing anywhere in the world can be impounded as they dont have to follow Thai law.  Lease creditors therefore have a strong bargaining position in the Plan which means other (unsecured) creditors will suffer. If that means the credit union members then the government is going to have major problems at the next election. 

They failed safety audits a few years ago but to even participate in codes shares/ Star Alliance

they had to get their act together. The reason TG does not fly top the US anymore is they can't 

can't money on it, and the fleet. Thai-US is a mostly leisure market that is saturated.

The US carriers stopped BKK flights also.

On the other hand until covid-19 there were several nonstop flights per day from tiny Singapore to the US well 

subscribed by business class passengers paying very high fares 

[herfiehandbag]

I am a bear of very little brain in such matters, but: let us assume "Herfiehandbag leasing inc." leases some aeroplanes to Thai International. Although based in the USA, "Herfiehandbag leasing inc." has offices all over the world. What is to stop their, let us say. Ankara office sticking a writ on an aircraft when it arrives?

[bwpage3]

5 hours ago, RtotheC said:

So basically they aren't flying to the US so they can't seize their planes. Smart choice. Not the moral one. But smart none the less.

No not a smart choice because the USA won't be the only country.

 

I seem to remember a Thai plane getting confiscated in Germany?

 

Airbus is not going to let their planes fly around Europe with no payment. No Way.

 

Fly Thai! Get your plane confiscated and find your own way home.

 

No thanks.

[bwpage3]

4 hours ago, robblok said:

You act like its a Thai thing.. its how all companies work when they get bankrupt and file for it. They try to negotiate a settlement with the creditors. This is the norm. i guess you have no idea how it works with large businesses and bankruptcy. 

They can TRY to negotiate a settlement, if the creditors do not accept the settlement, they can repossess their aircraft.

 

Thai knows they cannot mess around with a US court and that is why they won't risk flying to the US any more.

 

 

 

 

Edited June 2, 2020 by bwpage3

[Susco]

9 hours ago, webfact said:

With no more flights to the US, THAI may not need to seek protection under Chapter 11

 

Read : With no flights to the US, Thai doesn't worry that their planes get confiscated by investors that never see their money back

[robblok]

26 minutes ago, bwpage3 said:

They can TRY to negotiate a settlement, if the creditors do not accept the settlement, they can repossess their aircraft.

 

Thai knows they cannot mess around with a US court and that is why they won't risk flying to the US any more.

 

Of course they can TRY and only the leasing creditors can try to reposes the aircraft.  But this is a normal process. Nothing typical Thai or anything.

 

You are a bit uninformed about Thai is not flying to the US because of the courts. As other posters made clear Thai was already not flying to the US. 

[bwpage3]

25 minutes ago, robblok said:

Of course they can TRY and only the leasing creditors can try to reposes the aircraft.  But this is a normal process. Nothing typical Thai or anything.

 

You are a bit uninformed about Thai is not flying to the US because of the courts. As other posters made clear Thai was already not flying to the US. 

Thai has had many safety issues, which in Thailand they look the other away, but found out they cannot do that in the USA. So no choice for them, they cannot get out of not following safety rules like they do in Thailand. So they cannot fly to the USA and that is probably one factor that contributes to their financial woes, since the US is the biggest flight market in the world. LA, NY, Chicago, Dallas, Miami

 

Orlando has 60+million visitors a year, many flying in from all over the world but not Thailand.

 

Thai is aware once the US courts drop the hammer on the confiscation order, there is NO way they will be getting their plans back.

 

Think back if you can, when a very important person had their commercial aircraft confiscated in Germany because Thailand did not pay the German company for the work on the Don Muang expressway.

 

When that happens at that level, it puts the fear into Thai officials.

 

Other corrupt countries like China and Ukraine, Thailand can get away with it.

 

As far as leasing creditors, they hire teams of people to go repo the planes for them.

 

And once the order is given in first world countries for confiscation, there is no scam Thailand can pull to get it back and they know this.

 

Don't be surprised in many more first world routes simply disappear

 

 

 

 

 

 

[bwpage3]

1 hour ago, Susco said:

 

Read : With no flights to the US, Thai doesn't worry that their planes get confiscated by investors that never see their money back

Believe it or not, the US has the power to get other countries to issue the confiscation orders as well.

 

Just because they don't land in the US means doesn't mean they are out of danger of confiscation.

 

I am sure Airbus would confiscate their planes in any part of Europe, not just France.

[holy cow cm]

I noticed it mentioned frequent flyer miles. I actually have a lot with them from flying. What will they try to do? I also know they owe my daughter I believe 6-8 months of salary because they fired her. Miserable people just left her high and dry and so many other fired employees. I suspect they only kept the ones who got in their from knowing someone. 

Edited June 2, 2020 by holy cow cm

[Searat7]

Airbus has also leased 20 A-320 planes used by Thai Smile. No mention of this wholly owned airline in the various threads. 

[holy cow cm]

If they default on their creditors and Boeing’s and Airbus’ aircraft, then you would think it is essentially suicide as I would think they will not be getting any  new aircraft in the future from anyone as they would become sour grapes and a bad risk. What would they do? Buy Chinese or Russian aircraft? 

[Foexie]

12 hours ago, smedly said:

sounds like Thailand is doing its best to get out of paying what they owe and not returning what doesn't belong to them

And that isn't what trump is doing these days?! WHO??? China deal ??? Any deal???

[kiwikeith]

9 hours ago, phkauf said:

THAI hasn't flown to the US in maybe 10 years so that excuse is nonsense. THAI debt held by some of the leasing companies most likely is under US Law so they would ABSOLUTELY need to file in the US or just hand back the planes to avoid that. Also if THAI entered into any aircraft lease securitization that would also be under US Law, but I doubt they did that.

They want to avoid filing BK in the US at all costs since the US Bankruptcy Court will have zero tolerance for the type of shenanigans they can pull off in Thailand.

If THAI were to play games with the leasing companies, those aircraft could never leave Thailand at risk of being impounded. Imagine getting stuck at an airport in Europe with no plane to take you home is not good for business.

This will be fun to watch.

Quick solution! Impose a three thousand bht airport tax on the 65 million Chinese tourists set to flood back in, problem solved, next problem please 

[Fex Bluse]

17 hours ago, webfact said:

If creditors allow the rehab process to go via Thai courts, then THAI will not need to seek bankruptcy protection in the US, he said. 

Would have to be some rather daft creditors to trust a Thai Court.. 

[BadBouy]

I can not wait to see them try this with CCP when the high speed train goes tits up!

[robblok]

12 hours ago, bwpage3 said:

Thai has had many safety issues, which in Thailand they look the other away, but found out they cannot do that in the USA. So no choice for them, they cannot get out of not following safety rules like they do in Thailand. So they cannot fly to the USA and that is probably one factor that contributes to their financial woes, since the US is the biggest flight market in the world. LA, NY, Chicago, Dallas, Miami

 

Orlando has 60+million visitors a year, many flying in from all over the world but not Thailand.

 

Thai is aware once the US courts drop the hammer on the confiscation order, there is NO way they will be getting their plans back.

 

Think back if you can, when a very important person had their commercial aircraft confiscated in Germany because Thailand did not pay the German company for the work on the Don Muang expressway.

 

When that happens at that level, it puts the fear into Thai officials.

 

Other corrupt countries like China and Ukraine, Thailand can get away with it.

 

As far as leasing creditors, they hire teams of people to go repo the planes for them.

 

And once the order is given in first world countries for confiscation, there is no scam Thailand can pull to get it back and they know this.

 

Don't be surprised in many more first world routes simply disappear

 

 

Of course i get this, however as you now admit Thai was already not flying to the US as they failed tests. So it had absolutely nothing to do with this bankruptcy. They are not afraid of the US court they just can't fly there anyway.