Business Goes Bankrupt, Rent Is Owed

[TheLaughingMan]

So a business owned by a colleague is basically bankrupt, he has moved out of his office but owes back rent. The owners want him to meet with lawyers to talk about paying the back rent. What does he need to worry about?

Thanks!

[beano2274]

Prison - big fine - problems with extensions if a foreigner.

Many things can happen, he should look at the worse case scenario, and if it is not that bad then it's a bonus.

[powderpuff]

The landlord messed up by not getting first/last month rent in the lease.

[Phil Conners]

Assuming the business is a standard limited company and the lease was made with this I don't understand why the owner/director should go to jail unless something criminal is committed. Isn't this why the company structure is called limited - as in limited responsibility?

Anyway a chat with his own lawyer first is probably in order.

[TheLaughingMan]

They had 3 months deposit from him already, but his back rent which they allowed him to stack up went far beyond that. Do they have any responsibility for letting his back rent debt get slightly out of control? They should have kicked him out when it was just slightly overdue Im thinking.

[klikster]

They had 3 months deposit from him already, but his back rent which they allowed him to stack up went far beyond that. Do they have any responsibility for letting his back rent debt get slightly out of control? They should have kicked him out when it was just slightly overdue Im thinking.

From a strictly leagle POV, I haven't a clue .. but ..

Sounds like you and the colleague feel no ethical responsibility toward a landlord who apparently tried to help said colleague out. The comment " .. letting his back rent debt get slightly out of control .." could just as easily apply to the lessee.

They should have kicked him out when it was just slightly overdue Im thinking.

Probably should have, but did lessee ask for the extension? If so, IMO, he is ethically obligated to pay every last satang.

[jackdawson]

since there's no court system here , aren't these the kinds of "disputes" that are "settled" w/ either 2 big thai guys coming by your house to collect and /or firearms ?

note to self ; continue to NOT do business in thailand

[Sing_Sling]

Do they have any responsibility for letting his back rent debt get slightly out of control? They should have kicked him out when it was just slightly overdue Im thinking.

What an amazing post.

So, they have been kind enough, and trusted your friend, by letting him stay and giving him a hand to get his business over a rocky time = they are fools who have only themselves to blame.

If they would have chucked him out as soon as he was one baht in arrears I would have liked to have heard the moral outrage coming from people like you.

I'm certainly not the biggest fan of the average Thai mentality but sometimes I do have to wonder why they let foreigners in without a leash

[powderpuff]

They had 3 months deposit from him already, but his back rent which they allowed him to stack up went far beyond that. Do they have any responsibility for letting his back rent debt get slightly out of control? They should have kicked him out when it was just slightly overdue Im thinking.

So the facts are coming out in dribbles. But unless we have all the facts it's just speculation. I agree with the above poster if he asked for an extension then he is morally obligated to pay. The high road & all.

[Beetlejuice]

The outcome of this matter depends on the situation.

Was the business legal in Thailand? Is this person a Thai or a farang?

The burden always falls on the debtor if he/she owes back payments. For example is someone owed me rent or money, it would not be regarded as my fault or loss just because I wasn’t quite enough in chasing it up.

If everything were done legally and above board, in most cases this would be considered as a civil case. But if this was some sort of scam or done with intent to deliberately avoid payments, then criminal charges could be filed by the debtee.

[TheLaughingMan]

heh well I don't have all the details, everything I know I said. I'm not concerned with "morally" because I just offered to gather some legal info for him and I'm obviously quite useless at that lol. I'll just advise him to contact a lawyer.

[Sing_Sling]

Ah, you want a legal opinion:

Yes, he is liable for the owed amount. Full stop. End of discussion. Thread can be closed

Easy

[TheLaughingMan]

Yes obviously but his biz went bankrupt and he's currently got no money, when he visits with their lawyers how are they going to react to him being penniless at this time? Immediate imprisonment? lol

[soundman]

Bottom line: It is a civil matter.

If your friend doesn't pay and doesn't negotiate a settlement, the lessor can sue him and take him to court to try and recover monies owed. If your friend was part of a limited partnership, or company, the lessor will be suing the partnership/company, not your friend.

I would check this with a lawyer, however, if the partnership/company has no funds or assets, the court will decide on the liability of the debt which will be applied to the partners of the company. It may be that un-secured (no collaterol) debts, such as outstanding rent have no recourse if the partnership/company is out of money/bankrupt.

[soundman]

Also, being a civil matter, your friend will not go to gaol unless he violates a court decision/order, and with the speed of the courts, or lack of it to more correct , that could well be years down the track.

[Soutpeel]

Ah, you want a legal opinion:

Yes, he is liable for the owed amount. Full stop. End of discussion. Thread can be closed

Easy

If the company concerned is a limited company then "he" is not liable....the company concerned is liable for payment, it is the legal "person" in this case and any civil case would be against the company not the individual who is an officer of said legal entity...therefore cannot be sued in his personal capacity.

If the company was a Sole Prop for example, then he could be sued in his personal capacity....

[Phil Conners]

A couple of flame exchanges have been removed. Come on, It should be possible to discuss this without taking shots at each others.

[jimbeam1]

They had 3 months deposit from him already, but his back rent which they allowed him to stack up went far beyond that. Do they have any responsibility for letting his back rent debt get slightly out of control? They should have kicked him out when it was just slightly overdue Im thinking.

Surely he must have signed a lease. In which case he is liable to pay until the lease expires, or he sells it on.

As for letting him continue, racking up his dept. I think they new exactly what they were doing. Does he own anything of any value?

jb1

[Ulysses G.]

From what I have seen, Thais are pretty good about letting one out of a lease when a business is not working, but staying there and accumulating back rent is a very different story.

[nocturn]

They had 3 months deposit from him already, but his back rent which they allowed him to stack up went far beyond that. Do they have any responsibility for letting his back rent debt get slightly out of control? They should have kicked him out when it was just slightly overdue Im thinking.

yes, its their fault your friend is a deadbeat.

[nocturn]

heh well I don't have all the details, everything I know I said. I'm not concerned with "morally" because I just offered to gather some legal info for him and I'm obviously quite useless at that lol. I'll just advise him to contact a lawyer.

how do you reckon he will scrape up the cash for that?

[powderpuff]

It's interesting isn't it on this board which is non stop Thai bashing that once a Thai does something nice the perp is commended for getting one over? Deadbeat is the correct term.

[Kilgore Trout]

Assuming the business is a standard limited company and the lease was made with this I don't understand why the owner/director should go to jail unless something criminal is committed. Isn't this why the company structure is called limited - as in limited responsibility?

Anyway a chat with his own lawyer first is probably in order.

From my understanding of the law, owing a debt is a criminal offense and the police can take action at their discretion. I have seen cases where people have been jailed for bouncing checks etc (not forging, bouncing).

[Phil Conners]

Assuming the business is a standard limited company and the lease was made with this I don't understand why the owner/director should go to jail unless something criminal is committed. Isn't this why the company structure is called limited - as in limited responsibility?

Anyway a chat with his own lawyer first is probably in order.

From my understanding of the law, owing a debt is a criminal offense and the police can take action at their discretion. I have seen cases where people have been jailed for bouncing checks etc (not forging, bouncing).

I am not a lawyer but I don't think you are right about that. It would void the whole point of having a limited company.

[soundman]

From my understanding of the law, owing a debt is a criminal offense and the police can take action at their discretion. I have seen cases where people have been jailed for bouncing checks etc (not forging, bouncing).

You are quite correct - people are always fronting up to court for bad cheques.

However a bad cheque does not equal being in debt to somebody.

.............................................................

Getting into debt is not a criminal offense.

Owing someone money is not a criminal offense.

Issuing a cheque with in-sufficient funds is a criminal offence.

Dis-regarding a court order on a repayment schedule is a criminal offence.

[Phil Conners]

Getting into debt is not a criminal offense.

Owing someone money is not a criminal offense.

Issuing a cheque with in-sufficient funds is a criminal offence.

Dis-regarding a court order on a repayment schedule is a criminal offence.

Ok, so he is half correct

I never meant to suggest that having a limited company would allow you to commit fraud...

[Kilgore Trout]

From my understanding of the law, owing a debt is a criminal offense and the police can take action at their discretion. I have seen cases where people have been jailed for bouncing checks etc (not forging, bouncing).

You are quite correct - people are always fronting up to court for bad cheques.

However a bad cheque does not equal being in debt to somebody.

.............................................................

Getting into debt is not a criminal offense.

Owing someone money is not a criminal offense.

Issuing a cheque with in-sufficient funds is a criminal offence.

Dis-regarding a court order on a repayment schedule is a criminal offence.

I stand corrected

[KeyserSoze01]

To the OP, I would say your "friend" has more than back rent to worry about if he is penniless in Thailand.

[KLExpat]

To the OP, first, he should not go to see “their lawyers” without “his lawyers”.

A key point is that you keep saying the firm is “Going Bankrupt”, “Is Basically Bankrupt” etc. Well, I am not a lawyer, but it seems to me that unless he files for bankruptcy and is placed under protection of the court, there is nothing that can be done avoid civil cased being filed against the company (and presumably him if he is the director). I am aware of cases where directors have gone to jail for failure to pay court ordered payments of salaries and debts.

Also, is the lease in the company’s name or his own? Maybe he does not have a company to hide behind?

I also wonder, if he has not filed for bankruptcy, has he at least wound down the company in a legalistic sense or made arrangements to pay off debts (surly this is not the only debt)? I do not believe the protections given by incorporating a business allow you to just walk away from your business obligations like nothing happened

Your friend needs a lawyer, not a forum.

[exterminator]

depends on who you are, who you know. can be serious. had a friend, owed rent, had a string of creditors, ran away back to OZ, and tried to sneak back into thailand after several months. meanwhile, the landlord ganged up with other creditors, filed a suit; friend promptly arrested at airport on arrival. and was out on bail for 200k. skipped bail (don't ask me how he got out of the country), and apparently the case will be "forgotten" after 10 years, meaning he cannot step into LOS till then.