INDONESIA Law and Practice Contributed by: Emir Nurmansyah, Ulyarta Naibaho and Bilal Anwari, ABNR Counsellors at Law
Unsecured Claims Unsecured claims are not secured with any in rem security rights and do not have any privilege granted by the prevailing laws and regulations. They will be paid from the assets under the bankruptcy estate that have not been encumbered by in rem security rights held by the secured claims, after the general preferred claims have been paid in full. The subordination of the creditor’s claim of any class during the bankruptcy proceedings or the PKPU pro - ceedings is not recognised under the IBL. Subordinated Claims The IBL does not recognise the concept of the sub - ordination of shareholder claims, although in practice a proposed restructuring plan may incorporate such concept. 2.2 Priority Claims in Restructuring and Insolvency Proceedings As mentioned in 2.1 Types of Creditors , the IBL rec - ognises a priority claim that is ranked higher than a secured creditor claim (ie, “preferred claims”). However, in addition to such preferred claims, the IBL also rec - ognises bankruptcy estate claims (also known as post- bankruptcy claims) as claims that would normally rank higher than any other type of claim. Bankruptcy estate claims are essentially claims against the bankruptcy estate that arise during the bankruptcy proceedings after the bankruptcy declaration is rendered, such as: • fees of the receiver/administrator; • costs incurred during the liquidation of the bank - ruptcy estate or in the PKPU process (if com - menced prior to the bankruptcy); • fees of experts engaged during the proceedings; • post-bankruptcy financing; • lease of the bankrupt’s house or office during the bankruptcy proceedings; and • wages of employees of the bankrupt debtor for their continued employment during the bankruptcy proceedings.
• Outstanding wages (excluding severance pay - ments and other rights) of the employees of the bankrupt debtor. • Specific expenses stipulated by the Tax Law, which include: (a) legal expenses arising solely from a court order to auction movable and/or immovable goods; (b) expenses incurred for securing the goods; (c) legal expenses arising solely from the auction and settlement of inheritance; and (d) tax claims, court charges that result specifically from the disposal of a movable or immovable asset, and the legal charges exclusively caused by the sale and saving of the estate. Preferred claims that rank lower than secured creditors’ claims Secured claims of specific statutorily preferred credi - tors whose preferences relate only to the debtor’s specific assets, as stipulated by Article 1139 of the ICC, will rank higher if the specific relevant assets are subject to in rem security rights of the secured claim. General preferred claims General preferred claims will need to be paid from the assets under the bankruptcy estate that have not been encumbered by in rem security rights being held by the secured claims, ahead of the unsecured claims. General statutorily preferred creditors of the debtor’s assets in general, as stipulated by Article 1149 of the ICC, include the revenue authorities and the outstand - ing rights of the employees of the bankrupt debtor, oth - er than outstanding wages (eg, severance payments). Secured Claims Secured claims are claims that are secured with in rem security rights over the debtor’s particular assets. In practice, there is some uncertainty and conflicting views as to whether a secured creditor holding col - lateral that is provided by a non-debtor third party would be considered a secured creditor in PKPU proceedings, due to the lack of clarity regarding the term “secured creditors” in the IBL, and to conflicting practice in different PKPU case precedents.
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