Thai company defaults on a repayment contract. Advise needed.

[curious297]

My apologies if have posted this in the wrong forum.

 

A Thai developer and his company owe me a substantial amount of money. I have a signed contract including the company name, Thai owners name, his thai ID etc. on it with a Thai developer company that outlines a repayment schedule of money owed. This money was to be paid back over a period of 12 month with the final payment in September 2020. The first 3 instalments are paid but paid late and never on time. I accepted this as he paid something with a promise to pay the rest on time. 

 

Now we have this Covid virus issue the thai company owner states that he can’t pay as per the schedule agreed in the contract because money he was supposed to receive he didn’t get. Currently he is 6 payments late and now wants to make another payment schedule over and beyond what is outlined in the contract. He has paid some interest on the outstanding balance but still not enough to cover the agreed terms of the contract.

 

2 weeks ago, I had a Thai lawyer write to the company owner with a deadline of the 15th of this month (June which has now passed) to catch up on all outstanding money including interest as outlined in the contract and to continue with the outlines repayment schedule until completion. So far, the developer has informed that he can pay a few hundred thousand next month, same again for August and then restart payment of the scheduled load starting in September. It sounds like delaying tactics to me.

 

My lawyer says I have 90 days to take him to court and make a criminal case from the date of the letter. He wants to base the court case on the failure of the developer to notify me in writing that he is in the process of liquidating the company listed on the repayment contract which is deemed illegal. I personally don’t see how this would return the outstanding money

 

I have two issues:

 

1. The company that he listed in the contract that holds the debt, I found out he is in the process of liquidating it. As far as I am aware, any thai company that is going through liquidation, you are legally supposed to notify any one that is owed money by said company which he never did. It seems he is trying to remove all assets from said company.

 

2. What would be the best way to proceed legally to recover the outstanding  money. If we go the CIVIL ROUTE, my lawyer is asking for :

 

*   Alternative 1.  500k for his fees plus 2% court fees. No performance even if we win.

 

*   Alternative 2. 100k retainer and bill by the hour, plus 2% court fees and no performance even if we win.

 

If we choose to file CRIMINAL CHARGES, he is asking for 200k upfront plus 10% if we win.

 

I find these costs outrageous to pay a retainer and a win fee which would be in the region of 1.6 million THB not including the retainer.

 

If anyone or lawyers out there can offer some solid advice how to proceed, it would be appreciated.

[worgeordie]

What was the collateral given for the loan ?

regards worgeordie

[bwpage3]

Well if he liquidates, legal or not, what will he have for you to sue for?

 

Lawyers fee's seem ridiculously high, when there is NO guarantee of their performance, or he might take a retainer and tell you the same thing I just told you.

 

 

[curious297]

14 minutes ago, worgeordie said:

What was the collateral given for the loan ?

regards worgeordie

I have insisted on some form of collateral. He is a developer and has many condo's, land etc however, he says he has nothing to give. He says If I do not agree to his delayed repayment terms then I should take him to court.

[curious297]

11 minutes ago, bwpage3 said:

Well if he liquidates, legal or not, what will he have for you to sue for?

 

Lawyers fee's seem ridiculously high, when there is NO guarantee of their performance, or he might take a retainer and tell you the same thing I just told you.

 

 

My point exactly. I remember the case of the young thai girl driver that killed mini bus passengers by crashing into their bus and forcing it over the bridge in Bangkok some 10 years ago. She finally paid the court awarded compensation 10 years late and only due to embarrassment by social media. It seems to me that even if the courts agree and I win, there is nothing forcing him to pay or am I wrong?

[DaRoadrunner]

1 hour ago, curious297 said:

A Thai developer and his company owe me a substantial amount of money.

Who owes the money, the company or the person? If it is the company and he is about to declare bankruptcy you will find it hard to reclaim anything. In which case sue the man and you may get somewhere. There appears to be other collateral you could claim on.

 

Lawyers fees look extortionate. Try a different lawyer.

 

 

 

[Psimbo]

Basically bend over and kiss your ass(ets) good bye. There's a reason so many people advise against buying property in Phuket and this personifies it. The Lawyer will milk this for all its worth and even if it gets to court it will drag out for years, milking you even more.

 

Personally I  know of only one farang who has won in the courts and he was meticulously prepared- even then it took about six years and nearly wiped him out. I've lost count of the people who I know who have been done over.

 

In the short term take it on the chin and hold out to see what happens in Sept. Worst case you will end up having to walk away from it. 

 

I know this seems harsh comment but its the reality of the situation. I really hope to be proven wrong and read of a successful outcome but I won't hold my breath.

[stevenl]

42 minutes ago, curious297 said:

I have insisted on some form of collateral. He is a developer and has many condo's, land etc however, he says he has nothing to give. He says If I do not agree to his delayed repayment terms then I should take him to court.

You'll probably win in court, but getting money will require more court.

 

On top of that, in the present situation people not repaying is quite common and can be quite reasonable as well.

[jadee]

How much are you owed? The criminal case route seems to make the most sense - he failed to notify you that he is liquidating the company - that's easy to prove. I'd take that option. 

[rumak]

"don't invest any more than you can afford to lose".     often heard when referring to situations in

Thailand.      Unfortunately the saying is also true.  

 

I am with the "don't lose even more to the lawyers"  bunch here .   

 

sorry for your situation

[dddave]

1 hour ago, curious297 said:

He is a developer and has many condo's, land etc

These almost certainly are incorporated as separate entities and hard to touch.

[Puchaiyank]

Thais know that the courts and public opinion favor Thais in disputes with foreigners.

 

Good luck!

[steven100]

2 hours ago, curious297 said:

plus 10% if we win.

this is a standard fee that all Lawyers charge. 

[steven100]

5 minutes ago, Puchaiyank said:

Thais know that the courts and public opinion favor Thais in disputes with foreigners.

 

Good luck!

disagree .....  it's the law that's the problem,  there doesn't seem to be a clear path or mechanism to recover funds even when the court issues a judgement in your favour. 

[curious297]

1 hour ago, DaRoadrunner said:

Who owes the money, the company or the person? If it is the company and he is about to declare bankruptcy you will find it hard to reclaim anything. In which case sue the man and you may get somewhere. There appears to be other collateral you could claim on.

 

Lawyers fees look extortionate. Try a different lawyer.

 

 

 

Both the company in the process of liquidation and the owner are both listed on the contract. It seems as soon as put the company on the contract, he started liquidation process without informing me which I have read is a criminal offence. At no time has he informed me. I informed him that I got hold of the latest DBD and it shows currently but not yet complete liquidation in progress.

 

[worgeordie]

2 hours ago, curious297 said:

I have insisted on some form of collateral. He is a developer and has many condo's, land etc however, he says he has nothing to give. He says If I do not agree to his delayed repayment terms then I should take him to court.

The way to do it is to get collateral BEFORE,lending the money

regards worgeordie

[Gulfsailor]

I don’t understand how the company can be liquidated without settling outstanding balances. The auditor won’t approve it. The only (illegal) option for the owner(s) is to take out all assets from the company by selling these off to a person or different company on the cheap, and then filing for bankruptcy.

If the company somehow removed your claim from the books, my suggestion is to get a DBD registration copy from the company which includes the latest filed budget. Then have a lawyer call the auditor who signed off on it to notify you are a creditor and said company can’t be liquidated. That will at least buy you time. 

[farang51]

1 hour ago, curious297 said:

Both the company in the process of liquidation and the owner are both listed on the contract. It seems as soon as put the company on the contract, he started liquidation process without informing me which I have read is a criminal offence. At no time has he informed me. I informed him that I got hold of the latest DBD and it shows currently but not yet complete liquidation in progress.

 

How are the company and the owner listed? It is very important to know if he is personally liable or if he is only mentioned as the owner/CEO/whatever on the contract.

 

It is not the owner that has to inform you about the liquidation, he has to tell the liquidator, and the liquidator will then inform the creditors. Be aware that the process of liquidation can take time - maybe the liquidator has not yet begun to inform you and the other creditors?

 

If the DBD says who the liquidator is, you can contact the liquidator and ask of the process, and if he knows about you.

 

I know nothing about Thai law, the above is from the way things work in most other countries.

[DaRoadrunner]

21 minutes ago, farang51 said:

How are the company and the owner listed? It is very important to know if he is personally liable or if he is only mentioned as the owner/CEO/whatever on the contract.

 

It is not the owner that has to inform you about the liquidation, he has to tell the liquidator, and the liquidator will then inform the creditors. Be aware that the process of liquidation can take time - maybe the liquidator has not yet begun to inform you and the other creditors?

 

If the DBD says who the liquidator is, you can contact the liquidator and ask of the process, and if he knows about you.

 

I know nothing about Thai law, the above is from the way things work in most other countries.

This is Thailand.... he is gonna do a runner.

[beechbum]

14 hours ago, curious297 said:

I have insisted on some form of collateral. He is a developer and has many condo's, land etc however, he says he has nothing to give. He says If I do not agree to his delayed repayment terms then I should take him to court.

I'm no business guru but..isn't the whole point of "collateral" that you get it worked out upfront (like banks do) before any money changes hands to cover whats happening to you now?