For once this author is the bearer of good news. Great news in fact: seasoned APAC turnaround professionals Kurt Metzger & Michael Nacson are finally home and recovering from their unnecessary stints in a Thai prison.

As we reported back in April, Metzger and Nacson were incarcerated without bail in late 2024 in connection with customs offences allegedly committed 15 years earlier by Continental Petrochemical Thailand (CPT). The men had no knowledge of the alleged transgressions (or of the customs investigations); they were arrested simply because they had been acting as directors of CPT around the time the offences were committed as part of secured lenders’ efforts to restructure and/or sell the business of CPT’s parent Continental Chemical Corp (CCC) post-default.

This was no white-collar health retreat. Metzger (aged 65) and Nacson (aged 74) were stuck in a crowded, concrete-floored Thai prison cell with hardened criminals for 172 and 298 days (respectively). Thankfully, they’re now recovering from the ordeal – Metzger having been released in mid-May before returning to Singapore in early June (after prosecutors belatedly acknowledged he had resigned prior to the commission of the alleged offences); Nacson and fellow former directors Dr Kyu Joon Chai and Sureet Singh having been released in mid-September.

Now that the men are safe, the inquest can begin. How did it come to this? Who’s to blame? And could anything have been done to prevent it, or to better protect the men?

The short answer is that under Thai law, all directors of CPT at the time it committed the offences were strictly liable for the transgressions, irrespective of their level of knowledge or involvement. Nacson (but not Metzger), therefore, was always going to be found liable for CPT’s customs offences no matter what happened, highlighting the inherent risks restructuring professionals take on whenever they accept creditor-nominated director appointments in a bid to take control of underlying assets, or provide lenders with better financial or operational visibility. Put simply, such directors often go in blind, unaware of any skeletons in the closet and unlikely to be alerted to them by a debtor’s promoters or their loyal employees. As Metzger puts it, they are essentially swimming with sharks; and the only (limited) way they can protect themselves is to carefully document everything about their role, responsibilities, and dates of appointment and resignation.

But while there’s not much Nacson could have done to prevent being found liable for CPT’s offences, a lot more could have been done to keep he and Metzger out of prison.

Accountability for that rests with CPT, its ultimate promoter Hadiran Sridjaja (otherwise known as MY Ling, the promoter of the Singapore-based ChemOne Group), and Hadiran/Ling’s right-hand man Hendro Waskito (who was a director, president and CEO of CPT, but managed to escape the clutches of the Thai police).

Metzger and Nacson received little assistance from the ChemOne team. Not only had CPT refused to settle the dispute prior to the men’s arrest (despite up to 20 peer importers doing so), it also refused to provide any documentation which might have helped exonerate the men, or at least clarify their precise roles and dates of appointment (those dates being critically important in Metzger’s case). And while ChemOne did provide Chai and Singh with legal representation (from CPT’s own solicitors), to the extent those solicitors were coordinating the men’s joint bail applications and defences, Metzger questions whether the advice received was actually in their best interests (as opposed to those of CPT).

CPT, Hadiran, and ChemOne were of course entitled to act in their own interests. Nobody can condemn them for that. Metzger and Nacson weren’t their appointees; morally ChemOne owed Singh and Chai more than the receiver’s men. And CPT did, eventually, accept responsibility and plead guilty (albeit after Metzger was released), even paying the directors’ fines.

It’s just a pity they waited so long to do so. No restructuring professionals (or innocent directors for that matter) deserve to be sitting in prison while those truly responsible for the transgressions simply go on with business, happily announcing they’ve raised another USD 3.5bn from export credit agencies to fund their next project – the Pengerang Energy Complex in Malaysia. Maybe lenders looking to fill that project’s need for an additional USD 600m subordinated loan might be wise to take a closer look at the backers’ self-proclaimed history of success – and their history of defaults across CCC and then Jurong Aromatics, not to mention the more recent cases of Eterindo Wahanatama and Tianrong Chemicals Industry (formerly Tridomain Performance Materials) – before offering overly generous terms, and before any other restructuring professionals are caught in the cross-fire.

An all-too-familiar emerging markets restructuring

CCC’s restructuring wasn’t a great one for its secured lenders — Spinnaker Capital, Deutsche Bank, Barclays Capital, CLSA Mezzanine Management, Credit Suisse, Income Partners, Nordkap Bank, and Plexus Fund.

CCC defaulted in early 2009 owing lenders approx. USD 266m. To protect their rights while a restructuring was considered, the lenders appointed Timothy Reid of Ferrier Hodgson (now Baker Tilly) as receiver and manager in Singapore. But it quickly became clear that a forced sale of CCC’s assets in Indonesia and Thailand (including CPT) wasn’t really an option. So in late 2010, lenders agreed to take a 10.47% stake in newly-incorporated Royal Chemie International (created by merging CCC with other chemical companies indirectly controlled by Ling) in exchange for the discharge of USD 125m of their principal claims, with Royal Chemie assuming responsibility for the remaining USD 125m owed. That deal (to be implemented via a scheme of arrangement) was approved by the Singapore court in November 2010.

CCC, however, never implemented the scheme. Instead, as the scheme’s longstop date approached, Ling asked lenders to provide him with more time to arrange financing to acquire the lenders’ 10.47% Royal Chemie stake and repay their USD 125m (yet to be novated) loan. Lenders weren’t convinced by the offer – they saw it as a stalling tactic and allowed the scheme to lapse. But Ling then returned with a revised offer which honoured the original scheme terms, while providing him with an option to take out the remaining USD 125m debt for 90m. That second scheme was approved by creditors and sanctioned by the court in late 2011, eventually becoming effective in February 2012.

That, of course, wasn’t the end of the matter. By early 2014, Royal Chemie had defaulted on the USD 125m loan, raising the prospect of a second haircut – and more delay — for lenders. Not surprisingly, many rushed for the door, selling at around 20-30 cents to a previously unknown fund — Phoenix Castle – which emerged holding nearly 40% of the novated facility. That enticed Sinar Mas Group investment vehicle Avalon Hills, funded by Argyle Street Management, to offer to purchase the entire USD 125m loan at a price of 40 cents. But after Spinnaker Capital agreed to roll its loan holding into a new facility with Sinar Mas, Avalon returned with a lower offer of 15 cents for all those who remained. Haircut complete.

Protecting lender interests

Metzger and Nacson became involved in CCC’s restructuring in late 2009.

CCC’s lenders needed a better understanding of CPT’s business and cashflows if they were to value the business and pursue a restructuring. The best way to obtain that was to have CCC’s receiver appoint new directors at CPT level. In that role, Metzger and Nacson could standardize financial reporting between the group’s subsidiaries, facilitate better communication between existing management and the receiver, and foster the lenders’ broader understanding of the business so that any disruption could be minimized if the receiver ultimately needed to take a more active role in management (given concerns over potential management wrongdoing).

Ling didn’t oppose their involvement; Metzger was a biofuel specialist – his insight might be useful (even if he wouldn’t be involved in day-to-day operations, which would remain under the control of Ling and Waskito). But Metzger wasn’t around for long. Metzger quickly formed a view that CCC’s biofuel strategy had failed thanks to palm oil prices having risen dramatically, rendering the economics of producing bio-fuels no longer viable. That meant lenders had few options. Not only was the business likely to be worth only around USD 75m, but any forced-sale was likely to be problematic because management remained loyal to Ling and critical plant infrastructure was separately owned by Ling. So, on 5 October 2009, Metzger resigned.

Prison for all – except those responsible

Fast forward to September 2024 and Metzger and Nacson’s director appointments came back to bite.

Metzger was arrested at Bangkok airport as he arrived for a conference. According to prosecutors, CPT had arranged 239 shipments of various products without the correct import license between 2006 and 2010 — a time when Metzger was apparently acting as a director. Under Thai customs law, that made Metzger strictly responsible for any offences committed by CPT, irrespective of whether he authorized or played a part in the commission of the offences. The fact that he and Nacson were receiver-appointees who had no knowledge of the impugned shipments was therefore irrelevant, and both were charged alongside Singh and Chai.

Initially, Metzger was confident the charges would be dropped, even returning to Thailand voluntarily to answer further questions after the police had allowed him to leave. On multiple occasions the prosecution intimated that he was unlikely to be charged, but all that changed in November 2024 when he returned a second time — he was unexpectedly taken to prison alongside Nacson, Singh and Chai.

Piecing it all together with a little help from friends

Metzger spent 172 days on a cement floor, in a cage with 44 other inmates, under bright lights 24 hours-a-day. He lost over 24 kilograms.

Over that time, Metzger’s wife Gill visited him on 84 occasions, each time for the maximum permitted 20 minutes. Gill knew little about the CCC restructuring or the people involved. To understand why Metzger had been arrested and what could be done to secure his release, she needed to start from scratch by contacting people Metzger mentioned during their visits. Thankfully, some of the people involved in the transaction jumped to her aid – Jon Gresham (formerly of Barclays Capital) and Chris Teague (Spinnaker Capital) in particular. Contacts from the broader restructuring community also came forward to assist both Metzger and Nacson, including Mark Chadwick (formerly of FTI Consulting), Iain Melville (formerly of Mayer Brown JSM and now Axis Legal) and Edward Cairns (Fiera Capital Asia).

Eventually, it became clear that Metzger had a valid defence – he had in fact resigned prior to CPT arranging or receiving any of the 14 non-time-barred shipments which formed the basis of the alleged offences. The only problem was that CPT had failed to record his 5 October 2009 resignation with the Department of Business Development as required within 14 days. In fact, CPT had never even registered his appointment as a director until one month after he’d resigned. As a result, Metzger appeared as a director of CPT on the Thai corporate registry from December 2009 to August 2010, despite having actually been appointed to that role in May 2009 and having resigned by October 2009.

The upshot was that Metzger hadn’t been a director when the relevant offences had been committed. In turn, that meant he wasn’t strictly liable for CPT’s transgressions and should be released immediately. Now they just needed the prosecutor to acknowledge that.

No bail and no real help from the culprits

Nacson, Singh and Chai, however, weren’t as lucky — they had each been a director at the relevant time and were therefore strictly liable for CPT’s offences, even if they had played no part in them. The question for each of them was whether to accept liability and hope for a lenient sentence or await a formal trial in prison.

That decision might have been an easier one to make if CPT had taken responsibility for the transgressions, something it steadfastly refused to do until July 2025.

According to the directors, CPT and ChemOne had been provided an opportunity to settle the charges in 2015, well before the men were arrested. But while up to 20 other importers had accepted settlement terms proposed by the authorities, CPT and ChemOne refused to budge. Instead, they took their chances, hoping the prosecutors wouldn’t take things further. And in some respects, it worked – the prosecutors for some reason fell asleep at the wheel, allowing 225 of the 239 charges to become time-barred before they commenced proceedings.

For Metzger, Nacson, Chai and Singh, however, CPT’s refusal to accept responsibility had real consequences. To put it bluntly, the men were caught in the crossfire. So incensed were the Thai authorities with CPT’s behaviour (and Waskito’s luck in evading the Thai police) that they pushed ahead with prosecuting the offences on the basis that they represented a serious or important case for the Kingdom of Thailand even though only 14 charges remained. And for some reason, CPT didn’t attempt to convince the prosecutors otherwise – much to the annoyance of the directors, who watched bail application after bail application be denied.

But CPT and ChemOne’s failure to assist the directors didn’t stop there. After the men were arrested, ChemOne advised Metzger’s team that there was nothing it could do; this was a Thai issue, not a Singaporean one. The group didn’t even provide Metzger with documentation to assist his case — no appointment or resignation documents, no board minutes, and no shipping records or other documents demonstrating that the incarcerated directors played no role in the transactions. Luckily for Metzger, CCC’s former receiver Timothy Reid managed to locate just the evidence the team needed — contemporaneous documents evidencing his dates of appointment and resignation.

In fact, the only real support CPT and ChemOne provided was to arrange legal counsel for Singh and Chai – CPT’s own Thai legal counsel, Bangkok Legal. Initially, that firm coordinated joint bail applications on the part of all the directors. But as it became clear that the bail applications weren’t being considered by the courts, the directors wanted a change. That resulted in ChemOne retaining Metzger’s suggested counsel — Rajah & Tann Thailand — in late December to assist. But Rajah & Tann weren’t around for long. Why isn’t exactly clear.

But the directors and their teams believe it might have something to do with the fact that Rajah & Tann had advised the directors to plead guilty with the aim of ensuring their release on 24 February 2025 at a pre-trial hearing. Shortly after that advice was received, Rajah & Tann were gone; replaced by Bangkok Legal two days before the pre-trial hearing. Bangkok Legal then advised the men to plead not guilty, condemning them to further time behind bars pending trial in October 2025.

The tide turns 

Metzger’s team applied for bail for a sixth time on 27 January (the first time they did so separately from the other directors), armed with the appointment and resignation documents received from Tim Reid. But that application and two others filed in March were once again dismissed, along with an appeal on 28 March.

The catastrophic earthquake which rocked Bangkok that same day (and caused a building to collapse within walking distance of the prison) then caused a rethink. Having already approached the Thai prosecutors to remove one charge against Metzger on legal grounds, his team decided to approach them once more, this time to provide them with Metzger’s appointment and resignation documents and other relevant materials including the 9 April Debtwire article. The aim was to politely suggest to the prosecutor that if he’d had all that information at the time the charges were laid, he might not have charged Metzger.

From there, things snowballed. Over the ensuing two weeks, Gill met with US Ambassador Robert Godec and his team, who confirmed Metzger’s case was now a top priority (the embassy having previously been reluctant to interfere before legal channels were exhausted). Shortly thereafter, Metzger’s team reached out to a large number of family and friends, asking them to contact their US state representatives. They also began conversations with the US Special Presidential Envoy for Hostage Affairs as a backstop should diplomatic and legal channels fail.

Five weeks passed, during which Metzger’s team were advised to wait and to keep a low profile. Then, in mid-May, another bail request was submitted, and after a full day of waiting, both Metzger and Gill were cross-examined to validate the precise details of Metzger’s time as a director. Then, on 16 May, Metzger was granted bail, subject to him relinquishing his passport and paying a surety of THB 1m (USD 31,000). And finally, on 6 June, all charges against him were dropped, His passport was returned and he and Gill flew home to Singapore on 7 June.

With Metzger released, the pressure was on CPT to finally plead guilty and accept its fate. That it did on 29 July, with the court confirming it would deliver its verdict on 16 October – the original trial date. Nacson, Singh and Chai then pled guilty, and on 19 September — after 298 days in prison — the men were released after accepting seven-year prison sentences suspended for two years, and fines of up to THB 700,000 (USD 21,500); fines which CPT graciously agreed to pay.

Lessons for creditor-nominated directors

For creditor-nominated directors, there are two key lessons to be learned from the debacle.

To start with, document everything. Ensure your appointment, roles, responsibilities (including what you will not be doing) and resignation are dated, signed, acknowledged by the company and creditors, and immediately filed with all relevant authorities. Metzger documented his resignation but hadn’t followed up to ensure it had been filed. He couldn’t file the document himself and had assumed the company would comply with its obligations to do so. Alas, that wasn’t the case.

Second, if things look like they might go wrong, get independent advice. Don’t rely on a debtor to provide you with advice; its interests may be best served by acting in a way ambivalent to yours. CPT and/or ChemOne could have settled the Thai proceedings well before the directors were arrested. Instead, it was content for the men to spend months in prison while it prioritized its own interests; even as its legal counsel was acting for some of the directors.

More could have been done

Ultimately, CPT, Ling and ChemOne can’t be criticized too harshly. They were entitled to act in their own interests, upon their own legal advice, even if that meant refusing to settle, and/or refusing to provide potentially exculpatory documents to the directors. The directors (bar Metzger) were always going to be found liable as a result of having been directors at the relevant time. And neither Metzger nor Nacson were their appointees; they were the receiver’s men. Morally, CPT probably owed stronger legal support to Chai and Singh than to Metzger and Nacson.

But that’s not to say CPT, Ling and ChemOne couldn’t have done more. The directors were left to fester in prison. Not some white collar, low risk holiday camp; real prison. And while the men suffered, Ling and ChemOne turned a blind-eye and went on with business, celebrating their raising of USD 3.5bn in project finance for their next venture – the USD 5.32bn Pengerang Energy Complex.

For a company that markets itself as having a successful 40-year track record, it should have done better. Metzger certainly thinks so.

In addition to seeking compensation from the Thai government for his wrongful detention, he is also considering legal action against CPT for the suffering caused by its failure to properly register his registration as a director. And while that plays out, perhaps any private lenders out there considering the company’s request for an additional USD 600m in subordinated loans to cover increased construction costs might want to take a closer look at its self-proclaimed history of successes across CCC, Jurong Aromatics, Eterindo Wahanatama andTianrong Chemicals; before more restructuring professionals are caught in the cross-fire.

Prior to joining Debtwire, Ashley was a Partner at DLA Piper in Hong Kong with a practice focused on cross-border restructuring and insolvency matters. Ashley’s team advised lenders, funds, officeholders and debtors on a range of high-profile distressed scenarios across APAC (including in Australia, China, India, Indonesia, Malaysia, the Philippines, Singapore and Thailand) and worked closely with local counsel to coordinate related proceedings in the Caribbean, the UK, and the US. Ashley is a Fellow of INSOL International and is qualified in Australia, Hong Kong, and England & Wales.

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