creditors object to thais rehabilitation plan administrator appointment - Creditors object to THAI’s rehabilitation plan administrator appointment

A Thai-Airway Boeing 747 taxies on the tamac of the freed Suvarnabhumi international airport after making the first arrival flight at the protest-hit airport in Bangkok on December 3, 2008. Airlines gradually resumed international and domistic flights to and from the airport after protesters ended a blockade, with full operations expected on December 4, 2008. AFP PHOTO/HOANG DINH Nam (Photo by HOANG DINH NAM / AFP)

A lawyer for some of Thai Airways International’s creditors has voiced reservations over the national flag carrier’s appointment of a company to administer its rehabilitation plan.

The objection was raised against EY Corporate and Advisory Services, the proposed plan administrator, by an unnamed lawyer during the first hearing on THAI’s rehabilitation plan at the Central Bankruptcy Court.

It is reported that the lawyer cited the administrator’s lack of experience in managing the rehabilitation plan of an airline and its questionable track record in administering the rehabilitation of Saha Farm agro-company, which had also filed for bankruptcy protection.

The lawyer also argued that the service fees charged by EY Corporate and Advisory Services are unreasonable, with a 22 million baht initial payment required, followed by 15 million baht per month until the court approves the plan.

In his testimony to the court today, THAI Acting President Charnsin Treenuchagron defended the appointment of the administrator, claiming that it is a world-class company with a Thai partner.

The lack of prior experience in the rehabilitation of an ailing Thai airline is because airlines in Thailand have never filed for bankruptcy before, Mr. Charnsin reportedly told the court, adding that the majority of creditors, representing more than 100 billion baht of THAI’s debts, support the rehabilitation plan and its choice of administrator.

The court has not yet approved THAI’s rehabilitation plan or its administrator. It has scheduled more witnesses to testify this Thursday.

Mr. Charnsin later told the media that the company would accept any decision of the Central Bankruptcy Court.

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