You would think that living in Bangkok would offer an expatriate financier a fantastic, libertine social life. Tell that to Peter Gothard. The Australian debt workout specialist from Ferrier Hodgson rarely goes out. The problem is the armed bodyguards who never leave his side. It doesn't make for a fun night.

The histrionics of wrenching Thai Petrochemical Industries (TPI) from Thailand's most shameless debtor, Prichai Leophairatana, have passed from the headlines, but the inconveniences - an avalanche of petty lawsuits and daily security concerns - linger for TPI's new managers from Ferrier Hodgson.

Nonetheless, despite the continuing attempts by Prichai to get his company back by any means necessary, the ongoing rehabilitation of TPI has blazed a trail for the rest of the private sector and affirmed that the court system does work, if slowly.

"Prichai continues to try to create legal distractions for us," says Anthony Norman, Ferrier's director of regional business development. "We try to remain focused on rehabilitating the company."

The Leophairatana family once owned 60% of TPI and helped turn it into Thailand's biggest corporate debtor, racking up $3.7 billion of debt in the run-up to the Asian financial crisis. After a protracted and sometimes physically violent struggle, Thailand's bankruptcy courts allowed creditors to gain control through a debt-for-equity swap that saw the family share cut to 15% and Ferrier Hodgson installed as rehabilitation plan administrators.

Prichai and his allies responded with a spate of frivolous lawsuits that plumb the ridiculous in an attempt to have the entire process annulled. One is trying to subpoena Tony Norman's bank account status. Another says the business license is illegal because of a chop (stamp) placed on the wrong line. A third accuses them of being too expensive compared to domestic debt workout accountants, disregarding that many of Ferrier Hodgson's fees derive from having to fight off silly lawsuits. They have also been accused of bribing the creditor steering committee.

The winner, however, is a lawsuit suggesting that Norman and Gothard's work permits allow them only to actually conduct business on the office premises listed on the permit and nowhere else in Thailand - and therefore conducting work outside their office, such as at TPI facilities, hotel conference rooms or their lawyers' offices, is therefore illegal.

But the Ferrier Hodgson executives are confident that the Thai legal system will, in due time, throw these suits out. So far of the 29 lawsuits that Prichai has levelled against them, the courts have dismissed nine; the others are still being processed.

Moreover, although the Thai legal system is slow and labyrinthine, the courts have in the end proven effective and reasonable, thanks to a new bankruptcy law promulgated in 1999. "The bankruptcy court system in Thailand has done a good job," says Norman. "TPI was the acid test that pushed the system to its limits. If it had failed, debtors would have thumbed their noses at creditors and it would have killed any economy recovery. But it didn't fail, and as a result, after TPI you don't see any more misbehaving debtors. The tycoons that used to preach 'No talk, no pay, no run away' are now in rehabilitation."

Ferrier Hodgson's mandate is to reduce TPI's debt to $1.9 billion, at which point its 150 financial creditors are satisfied it can service the remainder. The initial debt-for-equity swap removed $700 million. Ferrier Hodgson is supposed to sell non-core assets for another $200 million and pare down the other $900 million by trading in the cyclical petrochemical industry with the company's surplus cash.

These efforts have been blunted, however. One key asset to sell is a cement company, TPI Polene, but it too faces insolvency and any sale depends on its own restructuring; but because Prichai is the plan administrator for this process, little progress has been made. Furthermore, Thailand's general economic recovery never really materialized, making trading conditions difficult. This has required getting creditors to approve an extension on Ferrier Hodgson's deadlines, which is a hugely laborious process - but one that Norman says is on track.

Norman and Gothard arrived in Thailand for the first time in late 1997, three months after the baht was un-pegged, sparking the Asian financial crisis. They didn't expect TPI's workout to extend into its sixth year. But they believe that thanks to a legal system that ultimately does work, creditors are getting a fair shake and Thai companies are being put back on their feet.