INDONESIA Law and Practice Contributed by: Emir Nurmansyah, Ulyarta Naibaho and Bilal Anwari, ABNR Counsellors at Law
After a bankruptcy declaration is rendered, the bank - rupt debtor is entitled to submit a composition plan. In bankruptcy proceedings, the decision to approve the composition plan requires approval from more than half the unsecured creditors who are present or represented at the meeting, whose rights are acknowl - edged or provisionally acknowledged, and who rep - resent at least two-thirds of the total amount of the unsecured claims of the unsecured creditors present or represented at the meeting (whose rights are also acknowledged or provisionally acknowledged). In the scheduled judge’s deliberation hearing, the commercial court must decide whether or not to con - firm the approved composition plan, together with the grounds for doing so. The commercial court may only refuse to confirm the approved composition plan if: • the estate of the debtor, including goods for which a right of retention is exercised, is much larger than the amount agreed in the composition; • implementation of the plan is not adequately assured; or • the plan was concluded fraudulently or under the undue influence of certain creditors. If a composition plan is approved and confirmed, and becomes final and binding, it will bind all unsecured creditors. The bankruptcy estate will be in a state of insolvency if: • no composition plan is offered; • the composition plan offered is rejected by the creditors; or • the commercial court refuses to confirm the approved composition plan. Pre-Existing Agreement In bankruptcy proceedings Pursuant to Article 28 of the IBL, claims initiated by a debtor against any party, including shareholders, affiliates and agents as defendant, prior to or during the course of the bankruptcy proceedings, must be suspended at the defendant’s request, to allow the defendant to summon the receiver and request that they take over the case. This must be done within a time period determined by the judges. If the receiver
fails to appear in response to the summons, or refuses to take over the case, the defendant may submit a petition for the claim to be dismissed. If the defend - ant does not request dismissal of the claim, the case between the debtor and defendant may be continued beyond the scope of the debtor’s estate. The receiver is authorised to take over the case, at any time, and request that the debtor be expelled from the case. In PKPU proceedings Pursuant to Article 213 of the IBL, commencement of a petition for bankruptcy or PKPU proceedings would not prevent the continuation of an existing ongoing claim, nor the commencement of a new claim, pro - vided that the debtor did not become an applicant or defendant in a (new) claim regarding a right or obliga - tion that relates to its assets without the administra- tor’s approval. The elements to succeed are the same as those that would have been applicable had the debtor brought the claims before the insolvency. 5.3 The End of the Liquidation Procedure(s) If the assets of the bankruptcy estate are insufficient to cover the costs of the bankruptcy, the commercial court may decide to terminate the bankruptcy imme - diately, upon the recommendation of the supervisory judge and after consulting with the temporary com - mittee of creditors (if any) and the bankrupt debtor. Consequently, the bankrupt entity’s debt is dissolved once the termination is confirmed by a final and bind - ing decision of the commercial court due to the insuf - ficiency of the bankruptcy estate. Conversely, if the bankruptcy estate is sufficient to fully satisfy all creditors’ claims, the bankruptcy will be concluded. The receiver will announce this termina - tion in the state gazette and a newspaper. In this sce - nario, the debtor has the right to request rehabilitation, allowing the court to restore the debtor to their original status before the bankruptcy by officially acknowledg - ing that the debtor has fulfilled all its obligations.
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