Bankruptcy Insolvency Regime in Indonesia 169
INSOL International
Seoul One-Day Seminar
The Bankruptcy/Insolvency
Regime in Indonesia
Michael S. Carl
[email protected]
SSEK Legal Consultants
February 23, 2017
Seoul, South Korea
INSOLVENCY/BANKRUPTCY
REGIME IN INDONESIA
• Law No. 37 of 2004 regarding Bankruptcy and
Suspension of Debt Payment Obligation (the
“Indonesian Bankruptcy Law”) – regulates
bankruptcy and suspension of debt payment
obligations (“PKPU”)
• No insolvency test that must be satisfied to file a
bankruptcy petition seeking liquidation or PKPU
petition of a debtor in Indonesia
INSOLVENCY PROCEEDINGS
• PKPU and Bankruptcy proceedings take place in
a Commercial Court
• PKPU gives creditors and debtors an option to
restructure indebtedness in a court process as an
alternative to a liquidation bankruptcy
• Bankruptcy proceedings are liquidation
INSOLVENCY PRACTITIONERS
IN INDONESIA
• Receiver
–party-proposed and court-appointed
–performs management and/or settlement
bankruptcy assets
–has full control over bankruptcy assets
• Administrator
– party-proposed and court-appointed
– together with the debtor manage the debtor’s assets
of
INSOLVENCY PRACTITIONERS IN
INDONESIA
• Qualifications - Receiver / Administrator
-
Indonesian citizen
complete a course and be certified by a professional
organization
accountant or lawyer
registered with the Ministry of Law and Human Rights
INSOLVENCY PRACTITIONERS
• Supervisory Judge
– court-appointed
– selected from Commercial Court judges
– monitor management and settlement of bankruptcy assets
– court is obliged to hear Supervisory Judge’s opinion before
making a decision with regard to the management or
settlement of bankruptcy assets
• Bankruptcy Lawyer
– appointed respectively by either debtor and creditors
– provide advice on the bankruptcy case
– protect the interests of his/her client
• Financial Advisor
– not mandatory
– usually appointed in bankruptcy or PKPU proceedings
involving large companies
– provide financial forecast on debtor’s business
ISSUES IN RESOLVING BANKRUPTCY
• Rotation of judges in commercial court can result in
change of Supervisory Judge in PKPU/bankruptcy
case, leaving a Supervisory Judge without a deep
understanding of the case
• The non-appointment of an Independent Financial
Advisor due to fees
• Questions on the independence of Receiver or
Administrator
• Criminalization of Receiver and Administrator
profession
• Need to revise the Bankruptcy Law
• PKPU or bankruptcy as a “way out” from a debtor’s
obligation to pay back large debts
THANK YOU
Seoul One-Day Seminar
The Bankruptcy/Insolvency
Regime in Indonesia
Michael S. Carl
[email protected]
SSEK Legal Consultants
February 23, 2017
Seoul, South Korea
INSOLVENCY/BANKRUPTCY
REGIME IN INDONESIA
• Law No. 37 of 2004 regarding Bankruptcy and
Suspension of Debt Payment Obligation (the
“Indonesian Bankruptcy Law”) – regulates
bankruptcy and suspension of debt payment
obligations (“PKPU”)
• No insolvency test that must be satisfied to file a
bankruptcy petition seeking liquidation or PKPU
petition of a debtor in Indonesia
INSOLVENCY PROCEEDINGS
• PKPU and Bankruptcy proceedings take place in
a Commercial Court
• PKPU gives creditors and debtors an option to
restructure indebtedness in a court process as an
alternative to a liquidation bankruptcy
• Bankruptcy proceedings are liquidation
INSOLVENCY PRACTITIONERS
IN INDONESIA
• Receiver
–party-proposed and court-appointed
–performs management and/or settlement
bankruptcy assets
–has full control over bankruptcy assets
• Administrator
– party-proposed and court-appointed
– together with the debtor manage the debtor’s assets
of
INSOLVENCY PRACTITIONERS IN
INDONESIA
• Qualifications - Receiver / Administrator
-
Indonesian citizen
complete a course and be certified by a professional
organization
accountant or lawyer
registered with the Ministry of Law and Human Rights
INSOLVENCY PRACTITIONERS
• Supervisory Judge
– court-appointed
– selected from Commercial Court judges
– monitor management and settlement of bankruptcy assets
– court is obliged to hear Supervisory Judge’s opinion before
making a decision with regard to the management or
settlement of bankruptcy assets
• Bankruptcy Lawyer
– appointed respectively by either debtor and creditors
– provide advice on the bankruptcy case
– protect the interests of his/her client
• Financial Advisor
– not mandatory
– usually appointed in bankruptcy or PKPU proceedings
involving large companies
– provide financial forecast on debtor’s business
ISSUES IN RESOLVING BANKRUPTCY
• Rotation of judges in commercial court can result in
change of Supervisory Judge in PKPU/bankruptcy
case, leaving a Supervisory Judge without a deep
understanding of the case
• The non-appointment of an Independent Financial
Advisor due to fees
• Questions on the independence of Receiver or
Administrator
• Criminalization of Receiver and Administrator
profession
• Need to revise the Bankruptcy Law
• PKPU or bankruptcy as a “way out” from a debtor’s
obligation to pay back large debts
THANK YOU