INDONESIA Law and Practice Contributed by: Emir Nurmansyah, Ulyarta Naibaho and Bilal Anwari, ABNR Counsellors at Law
a creditor due to the debtor’s subsequent default in performing its obligations, as cited in the composi - tion plan. The debtor must show that the allegation has no ground. Under the IBL, the commercial court may grant the debtor a 30-day grace period to fulfil its obligation. If the debtor fails, the commercial court will nullify the plan and declare the debtor bankrupt.
providing the debtor an opportunity to restructure its debts and sustain business operations. 4.6 The Position of Shareholders and Creditors in Restructuring, Rehabilitation and Reorganisation Shareholders’ Position Shareholders maintain their statutory voting and other rights as long as the exercise of such rights does not affect the powers of the administrator or the proce - dures prescribed by the IBL. Secured Creditors’ Rights and Remedies The secured creditors’ right to enforce their security is subject to a stay for the entire period of the PKPU proceedings, which can be up to a maximum of 270 days from the PKPU decision being granted. None - theless, the IBL provides that secured creditors have the right to seek relief from an automatic stay under both bankruptcy and PKPU, by filing for a lifting of the stay petition. If a composition plan has been confirmed in the PKPU proceedings, such plan will bind all creditors (secured and unsecured) except dissenting secured creditors, who will be compensated by the debtor at the low - est of the value of the collateral (the collateral value as determined either by the collateral documents or by an appraiser appointed by the supervisory judge) or the actual claim directly secured by in rem rights (relating to property, not a person). Unsecured Creditors’ Rights and Remedies Under the IBL, unsecured creditors are entitled to vote on the composition plan being offered by the debtor in both bankruptcy and PKPU proceedings. A composi - tion plan will be deemed approved by the creditors if it fulfils PKPU voting requirements (as mentioned in 4.2 Statutory Restructuring, Rehabilitation and Reorganisation Procedure ) and bankruptcy voting requirements (as mentioned in 5.2 Course of the Liq- uidation Procedure ). Failure to secure majority approval from the unsecured creditors may either:
4.4 The Position of the Debtor in Restructuring, Rehabilitation and Reorganisation
Upon the PKPU, the debtor will still be entitled to manage and dispose of its business and assets, but only jointly with the administrator; the debtor cannot conduct any management or ownership actions over all or part of its assets without the approval of the administrator. Any violation of this provision will entitle the administrator to take any action required to ensure that the debtor’s assets are not jeopardised. Perfor - mance by the debtor of an obligation arising after the commencement of the PKPU proceedings without the administrator’s consent can only be imposed on the debtor’s assets to the extent that the debtor’s assets gain advantage/benefits from this performance. The IBL provisions allow the debtor and the adminis - trator in PKPU proceedings, or the receiver in bank - ruptcy proceedings, to obtain new financing from a third party after obtaining the supervisory judge’s approval. If this new financing requires security from the debtor’s assets, however, the security can only be provided from the debtor’s assets that are free from any encumbrances or existing security right. There - fore, the claims under the new financing do not consti - tute priority claims, other than the privilege right under the security interest being provided (if any). The administrator plays a crucial role in managing the debtor’s assets and facilitating a restructuring plan (see 1.3 Statutory Officers regarding the roles, rights and responsibilities of the administrator). The admin - istrator collaborates with the debtor, who maintains control of their business under the administrator’s guidance. The primary objective of the administrator is to balance the protection of creditors’ interests with 4.5 The Position of Office Holders in Restructuring, Rehabilitation and Reorganisation
• disrupt or block a restructuring plan; or • fail to achieve deferral of a liquidation.
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