Abstract:
Unlike all other assets of the insolvency estate, eontracts usually are tied to the debtor's claims and liabilities; therefore, the estate must perform in order to enjoy the rights. As a result, the bankruptcy law provides the special measures to treat those contracts by authorize by authorize the insolvency representative to assume or reject the debtor's contracts so as to achieve the objectives of maximizing the value of the estate and reducing liabilities and, in organization, enabling the debtor to survive and continue its affaire under the plan. Moreover, such treatment will ensure that similarly situated creditors are treated equitably by entitles the counterparty to claim its damages arising form rejection as an unsecured creditor which will be paid pro rata. The purpose of this research is to study the objectives of the bankruptcy law; the concep0ts, the principles, and the procedures of the treatment of contracts in bankruptcy proceeding under the Thai and foreign laws. According to the study, it was found that the provisions of the Bankruptcy Act B.E. 2483 as regards the treatment of contracts was broadly prescribed and had insufficient and improper procedures to enforce efficiently and effectively. Thus, the value of the estate was impaired and could not reduce its liabilities, therefore lessen the creditors' payout rate. Additionally, it was unfair and prejudiced the parties in interest. Consequently, this research has suggested the solution as follow: 1. Specify the type of contract which may assume or reject, that is, the contract under which both the debtor and its counterparty have not yet fully performed their respective obligations; 2. Specify that the ipso facto clauses are unenforceable; 3. Specify the general duties of the official receiver, including an obligation to maximize the value of the estate and authorize the court to withhold the rejection in the interest of justice; 4. Specify a certain time period to assume or reject a contract, which time period may be extended by the court. In the organization; authorize the plan preparer, the temporary administrator, or the official receiver to assume or reject a contract at any time before the confirmation of the plan; and should permit a counterparty to request the plan preparer, the temporary administrator or the official receiver to make a prompt decision. Failure to act within the specified time period, then such contract should be deemed reject; 5. Provide the special treatment of certain contracts in order to protect the counterparty; 6. Identify the types of contracts that cannot assume; and 7. Entitle the counterparty, who continues its performance for the benefit of the estate during the gap period, to claim the compensation arising from using its assets.