New Nordic Development – Creditor Update #2
Dear New Nordic Development client,
Client Update No. 2
First and foremost, we continue to extend our heartfelt wishes for your health and safety during these difficult times. Since our last update, Thailand is now in the middle of a third wave of Covid-19 with restrictions on travel between provinces and very limited possibilities to enter or leave Thailand, mostly with long quarantines. The same applies to the other Asian countries we have business in, and for most of the world.
Thailand has slowly started vaccination but out of a population of 70 million, it still has a long way to go. A similar situation exists in Cambodia, Indonesia, and the Philippines.
Since our last update, we have been working on possibilities to restructure our business including models focussing away from tourism and rental. We are working to present a preliminary proposal to the court at the end of May.
Many have also asked us to update with photos from completed projects, and we would invite you to look at the construction update page here: https://newnordicgroup.com/constructionupdates.
As mentioned previously, we continue to protect and maintain our projects around the clock. While most buildings are closed due to a lack of tourists, we stand ready to receive guests again once the situation improves.
In response to the various emails, we have received through the New Nordic Helpdesk (https://nng-restructuring.com/contact-us/), I have also included the most common questions and answers to help you understand the Thai Restructuring process.
Q. Why wasn’t my name on the creditors’ list?
The amount and the inclusion of your debt is not a matter that New Nordic can decide. The court document is posted here: https://nng-restructuring.com/filings/Order-and-Petition-NND.pdf. which has a list of creditors and claimed amounts. Please check the court documents to confirm whether you are included on this initial list of creditors.
This initial list of creditors is based upon the Thai accounting standards. This may not include all people who have legitimate claims against the company due to the way debt is defined and how rental guarantees and cash backs are treated. For example, you will notice the incomplete projects are considered debt and this debt is based upon the percentage of completion. This is not calculated by New Nordic but rather by the Thai accounting standards.
Whether you are on this list or not, you will be required to file documents confirming your debt with the court within 30 days of the appointment of the planner. At this stage, the court has set aside May 31 to appoint the Planner.
Even if you are not on this initial list, it does not extinguish your rights against the company.
You should closely monitor the court announcements as well as our website to determine when you can file a claim against the company for your debt.
Q. What can I claim against the company?
In the Thai Restructuring process, you are classified as an “unsecured creditor”. The only means available for unsecured creditors to obtain the repayment is through the restructuring plan or a forced sale of the company’s assets. Any forced sale normally returns only a small portion of the original value of the assets and this money must be distributed equally amongst all creditors, no matter the NND project they purchased.
All applications for repayment must be made within one month after the Court’s appointment of the plan preparer is published. All creditors must file according to the same procedures. If a creditor does not apply within this period, he or she forfeits their right to receive payment, unless the plan provides otherwise, or the Court cancels the business reorganization order. There is no special procedure for foreign creditors as the law does not differentiate between Thai and foreign creditors.
Creditors must prepare information about the debt claimed, which is calculated until the date that the Court issued the order for business reorganization and appointment of the Planner. Please note that all documents must be both notarized and legalized and verify the claim and the claimant’s identity. The claim must be in Thai and the translation officiated.
The Court or the Planner may ask creditors to submit additional evidence in support of their claim, particularly if there is an objection. This review may take considerable time and will rule on whether to accept, partially accept or reject a creditor’s claim.
Your inclusion (or not) and the amount of your claim will be determined by the court at a later stage. We cannot provide specific information on individual claims and creditors are advised to seek legal advice from an experienced Thai legal practitioner.
Q. Can I object to the appointment of the company as a restructuring “planner” / Can I act to recover my debt?
New Nordic Development Co. Ltd has applied for restructuring under the Thai code and this application has been accepted. NND has shown the court that restructuring is a better outcome for all creditors than a forced sale of assets.
There are measures provided under the Thai law that prevent the company’s transfer of assets.
Similarly, if you lodge a civil claim then there is an automatic stay as stipulated in section 90/12 of the Act. Once the automatic stay commences, basically a creditor cannot file an action in a civil case against a debtor in respect of the debtor’s assets without the Court’s approval.
Initially, NND has the right to appoint the plan preparer. If there are no objections the Court, if it believes that the person is suitable, will appoint the person nominated by the company.
However, if there are objections, NND then gets the right to nominate another plan preparer. If there are still objections, then a meeting of the creditors will be called. This process can take several weeks but with Covid, it may be delayed further. In the interim NND can only pay normal expenses and cannot incur any substantial new expenses including re-commencing projects otherwise suspended.
If the creditors vote to appoint another licensed Planner, then the costs of this would likely exceed THB20,000,000 including a bond usually required by the court. This would normally be paid by the creditor or group of creditors making such a request.
The longer the delay in appointing a planner, the greater the chance the liquidation of all assets may be the only possible outcome. Historically this has resulted in much less value for creditors than under a planned restructuring.
Regardless of the planner, any restructuring plans must be submitted to the Court and approved by creditors. At a minimum, the approved plan will contain:
1. the reasons for reorganizing the business.
2. details concerning the assets, liabilities, and other binding obligations of the debtor at the time the Court orders business reorganization.
3. principles and methods of business reorganization.
4. ways to solve problems stemming from a temporary lack of liquidity during plan implementation.
5. action to be taken in cases where a claim or debt is assigned.
6. the name, qualifications, and letter of consent of the plan administrator as well as information about compensation.
7. time in which the plan will be implemented, which must not exceed five years; and
8. the refusal of certain contractual rights when these obligations exceed the benefits to be derived therefrom them
To approve the plan, all creditors enjoy equal rights, and the plan must be approved by a majority.
Once the Court accepts a restructuring plan, it becomes binding on all creditors. The “plan administrator” is then appointed who then will manage the business according to this plan.
Q. How can I take possession of my apartment?
If your apartment has been transferred to you before New Nordic Development Co., Ltd filed for restructuring (on 28 January 2021), you will be entitled to receive a land title deed (Chanot) and keys to your apartment. Likewise, if your lease has been registered on the land title deed (Chanot) you may collect your keys.
If your lease has not been registered or your land title has not been transferred, you will rank with other unsecured creditors whatever the reason for this situation. As NND has filed for restructuring, we are unable to make any exceptions.
To collect your keys, you will need to make an appointment (https://nng-restructuring.com/contact-us/) to attend in person or have a signed power of attorney for a representative to attend on your behalf. We can send you a standard form to use as a Power of Attorney if needed. This form must be signed by you and your agent with attached appropriate identification.
You are also advised that taking possession of your apartment may cancel all obligations for “rental guarantee” and “buy-back”. You should seek advice on what it will mean to take possession of your apartment.
To obtain your apartment keys all outstanding invoices and bills need to be settled. When you make an appointment, you need to provide all details of your purchase (such as the purchase agreement), let us know if you are using an agent (and send the agent’s details) and the dates you want to collect the keys. We will send you details of any outstanding water, power, and maintenance fees for the remainder of the year.
The cost of (amongst other items) will be your expense.
1. Utilities (water, electricity, internet, and cable TV).
2. Condominium common area security and maintenance (juristic fees).
3. Upkeep and cleaning (of your property).
4. Insurance (of your property).
5. Repairs (to your property).
These providers require their accounts fully paid before providing future service with some paid in advance. These costs will not be paid or reimbursed by the company.
Upon collecting the keys, you will be taken to the apartment, complete the inventory list and sign for possession. At that point, you should consider insurance for your property as you are then responsible for all losses or damage.
Finally, even if you take possession of your apartment, you may still be a creditor of the company. You should carefully monitor our site and the court posting for future developments.
Due to the ongoing COVID crisis in Thailand, we regret that we cannot accommodate face-to-face meetings until further notice. The Helpdesk (https://nng-restructuring.com/contact-us/) can, however, schedule virtual meetings via Zoom if you would like to speak with us in that way.
We will send out a further update to creditors of NND shortly. This will include any court filings and an update of the planned court hearing at the end of May.
In the meantime, stay safe and please let us know through the Help Desk if there are any further questions we can answer.
CEO, New Nordic Development Co., Ltd
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