INDONESIA Law and Practice Contributed by: Emir Nurmansyah, Ulyarta Naibaho and Bilal Anwari, ABNR Counsellors at Law
Rights of Set-Off Any person that has a debt to or a claim against a debtor can set off that debt or claim in bankruptcy or PKPU proceedings, provided that the debt, claim or any legal action raising the debt or claim has occurred prior to the commencement of the PKPU or bank - ruptcy proceedings. Trading of Claims Against a Company It is possible for claims against a company under PKPU/bankruptcy proceedings to be traded, taking the following into account: • any transfer of claims against the company after the PKPU/bankruptcy proceedings have com - menced cannot be set off; • any transfer of claims against the company per - formed after the bankruptcy proceedings have commenced, by way of breaking up claims, will not create voting rights for the new creditors; and • the voting right arising from claims against the company being transferred in its entirety after the bankruptcy proceedings have commenced will transfer to the new creditor. The transfer of claim needs to be notified to the administrator in the PKPU and to the receiver team in The IBL is silent on whether equity owners can receive or retain any ownership or other property on account of their ownership interests. However, equity owners can always receive or retain ownership or other prop - erty due to their ownership interests, to the extent that this does not relate to the debtor’s assets. 5. Statutory Insolvency and Liquidation Procedures 5.1 The Different Types of Liquidation Procedure The parties eligible to file a bankruptcy petition, as well as those to whom it applies, are subject to the same rules as the PKPU, as outlined in 4.1 Opening of Statutory Restructuring, Rehabilitation and Reor- ganisation . bankruptcy proceedings. Existing Equity Owners
The debtor (individual or corporate entities) must be declared bankrupt once the satisfaction of both of the following tests for bankruptcy can be summarily proven in bankruptcy proceedings before the com - mercial court: • the debtor has at least two creditors; and • the debtor has failed to pay at least one of its debts that has become due and payable. While the IBL regulates all details of bankruptcy pro - ceedings, the ICL only regulates how the D&L pro - ceedings must be performed in general. The special features/requirements of a bankruptcy proceeding (eg, the stay period, public auction of assets, power to set aside a contract, requirements to become a liquidator and possibility for a creditors’ committee) do not exist in D&L proceedings. 5.2 Course of the Liquidation Procedure The initiation of a bankruptcy petition against the debtor does not affect the debtor’s legal status. There - fore, the debtor may continue to operate its business as usual during the adjudication of the bankruptcy proceedings. The legal consequences of bankruptcy will only take effect once a bankruptcy declaration is issued by the commercial court, where the board of directors (BOD) of the debtor loses its authority to manage the bankrupt debtor’s affairs and estate because these authorities are transferred to the receiver; see 1.2 Types of Insolvency . After the bankruptcy declaration is rendered, the receiv - er must announce the supervisory judge’s determina - tion on the following to all known creditors, in writing (in the state gazette and at least two daily newspapers): • the deadline for claim submission; • the deadline for tax verification; and • the schedule for the creditors’ meeting to conduct claim verification. All claims submitted by the creditors to the appointed receiver must be verified against the debtor’s record/ book and report, based on the rules of verification set out in the IBL.
231 CHAMBERS.COM
Powered by FlippingBook