JKN Global Group Public Company Limited, a Thai company in the midst of bankruptcy proceedings, announced the sale of 50% of the shares of JKN Legacy Inc, owner of the Miss Universe Organization (MUO), to Legacy Holding Group USA Inc (LHG) for a total of US$16 million. Legacy Holding Group is owned by Mexican businessman Raúl Rocha Cantú.
The sale of assets by a bankrupt company is subject to specific regulations in Thailand. The Bankruptcy Act of 1940 requires bankruptcy court approval for such transactions. If the sale of 50% of JKN Global Group legacy was made without court approval, it could be considered a fraud on creditors.
This is because the sale could reduce the value of the company’s assets, making it difficult for creditors to recover money. Some financial experts question the sale price, considering that 50% of the MUO could be worth more than the USD 16 million paid by LHG.
“It could be a scheme known as Fraudulent Transfer when a company and its Board takes assets from its creditors, in small words, it’s a fraudulent business practice” said an expert in the matter.
According to JKN Group’s official statement, the sale seeks to “enhance and strengthen the capabilities of the Miss Universe organization, including financial readiness thanks to the capital resources received from LHG“.
In addition, LHG is highlighted as “an important global strategic partner that can leverage its collective expertise to drive the Miss Universe business towards premium products and services of excellence“.
The transaction was made through a share purchase agreement signed on October 20, 2023, and is expected to be fully completed by September 2024, although both parties may agree to a modification of the date.
It should be noted that this sale comes in the midst of a bankruptcy process initiated by JKN Group in May 2023. The Thai company is facing various debts and has been looking for ways to restructure its finances.
