Bankruptcy of Limited Liability Company in Indonesia
When a limited liability company (foreign owned PMA or local owned PT) no longer can pay off its debts it can file a bankruptcy. A bankruptcy can also be requested by two or more creditors of a company which debts have been matured. A bankruptcy petition needs to be filed to the commercial court. A decision on a bankruptcy request, shall be executed by the court having jurisdiction over the region where the company is domiciled. When accepting the bankruptcy petition, the court shall appoint a curator and a supervisory judge, who shall be authorized to manage and settle the bankruptcy of the company.
PNB Law Firm is specialized in bankruptcy cases and our firm is fully authorized and licensed to act as curator in bankruptcy cases. When acting as curator, we understand that time is of the essence, and guarantee the efficient and optimized case settlement to ensure optimized return of outstanding credits to creditors.
Decision to File for a Bankruptcy
A bankruptcy of a limited liability company can be either filed by the company itself, or by two or more creditors.
Bankruptcy filed by the company itself
A company can file a bankruptcy by itself if such bankruptcy decision is approved by 75% of the shareholders with voting rights of the company in a General Meeting of Shareholders. Upon the request from the Board of Directors, Board of Commissioners or one or more shareholders of the company which hold more than 10% of the shares with voting rights of the company, the shareholders will convene a General Meeting of Shareholders to decide on the bankruptcy of the company.
Bankruptcy filed by creditors of the company
Creditors of the company can file a bankruptcy request at the commercial court, if the following conditions are met:
- there are at least two creditors that will request the bankruptcy of the company; and
- the debts of the creditors are already matured (overdue).
Appointment of Curator
The commercial court will appoint a curator who at minimum will meet with the following requirements:
- the curator must be independent and have no conflict of interest with either the the company or any of the creditors;
- the appointed curator is not allowed to handle more than three on-going bankruptcy or suspension of payment of debts cases at the same time;
- the curator must have a valid curator license.
Once the curator is appointed, he shall be authorized to perform the management and the settlement of the bankruptcy assets since the date on which the bankruptcy decision is rendered. The curator shall therefore handle all outstanding transactions with creditors, including the renegotiation of transactions and agreements and the proceeding of the sale of assets of the company.
Any commitments made by a company after the bankruptcy declaration may not be paid from the bankruptcy assets, unless the commitment will be a benefit to the bankruptcy estate or has been authorized by the curator.