INDONESIA Law and Practice Contributed by: Emir Nurmansyah, Ulyarta Naibaho and Bilal Anwari, ABNR Counsellors at Law
claimed does not make it impossible to summarily prove the debt’s existence). Aside from this substantive test, an additional test for deciding whether a PKPU can be granted relates to whether the debtor cannot, or foresees (or its creditors foresees) that it will be unable to, pay its debts as they become due and payable. The Supreme Court Manual provides that the PKPU and bankruptcy petition can be initiated on individu - als, legal entities (ie, limited liability companies, foun - dations and co-operations) and civil partnerships (ie, unlimited liability partnerships, limited liability partner - ships and other forms of civil partnership). 4.2 Statutory Restructuring, Rehabilitation and Reorganisation Procedure During PKPU proceedings, the appointed adminis - trator is required to announce the PKPU decision as soon as possible in the state gazette, and in at least two daily newspapers determined by the supervisory judge. The announcement will contain the supervisory judge’s determination on: • the deadline for the claim submission; • the schedule for the claim-verification meeting; • the date and time the proposed composition plan will be discussed and decided in the creditors’ meeting led by the supervisory judge; and • the date of the judge’s deliberation meeting. All claims submitted by the creditors to the admin - istrator must be verified against the debtor’s record/ book and report, based on the rules of verification set out in the IBL. Furthermore, the administrator/receiver will issue a permanent list of creditors containing the recognised amount of claims of creditors. The PKPU may be terminated at the request of the supervisory judge or one or more creditors, or upon the recommendation of the commercial court, if cer - tain conditions are fulfilled – eg, the debtor is acting in bad faith in managing its assets during the PKPU, or has inflicted loss to the creditor and others. This may result in the debtor being declared bankrupt.
The debtor may, at any time, request that the commer - cial court lifts the PKPU, on the basis that the debtor is now able to start repaying its debts. In this situation, the commercial court will summon the administrator and the creditors before making a decision. The IBL provides the opportunity for a debtor to offer a composition plan that restructures the rights of creditors, parties to an agreement, shareholders and relevant parties, subject to negotiation between the debtors and such relevant parties. Under the IBL, shareholders have limited rights in bankruptcy proceedings, and are typically last in line to receive any distributions from the liquidation of assets after all secured and unsecured creditors have been paid. While creditors have more representation during bankruptcy and PKPU proceedings, creditors can negotiate and vote upon the composition plan proposed by the debtor. A meeting of creditors must be called within 45 days of granting the provisional PKPU. At this meeting, the secured and unsecured creditors must: • approve the composition plan, if a plan has been submitted to the commercial court and is ready to be voted on; • agree to convert the provisional suspension of pay - ments into a permanent PKPU for a certain period (up to 270 days from the date of granting the provi - sional PKPU) if the debtor requests an extension of the PKPU period; or • reject the composition plan or the request to extend the PKPU period, in which case the debtor will subsequently be declared bankrupt (the bankruptcy estate will immediately be in a state of insolvency). In PKPU proceedings, the decision to approve the composition plan, extend the PKPU period or grant a permanent PKPU requires approval from: • more than half of the unsecured creditors who are present or represented at the meeting, whose rights are acknowledged or provisionally acknowl - edged and who represent at least two-thirds of the total amount of the unsecured claims of the
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