Preparation key to court battles against IBRA debtors<\/p>\n
Berni K. Moestafa, The Jakarta Post, Jakarta<\/p>\n
Sound preparation may be the only thing that will allow the
\ngovernment to recoup billions of U.S. dollars from bad debtors in
\nlegal battles looming over the next three to four months,
\nanalysts said on Friday.<\/p>\n
The advice comes as few believe the debtors will meet the
\nthree-month deadline, preferring instead to face litigation or
\nprosecution by the government.<\/p>\n
Lawyer Hotman Paris Hutapea said the government should use the
\ntime wisely to build strong cases against the uncooperative
\ndebtors.<\/p>\n
\"All the government can do is to prepare itself better,\" he
\ntold The Jakarta Post.<\/p>\n
He should know. Hotman has made a name for himself defending
\ndebtors in the commercial court, winning most of his cases.<\/p>\n
Routine cases in which he is involved include defending
\nbankruptcy petitions brought against his clients by the
\nIndonesian Bank Restructuring Agency (IBRA).<\/p>\n
IBRA is renowned for its poor track record, having lost nearly
\nall of the 230 court cases it has brought.<\/p>\n
Now the agency is expecting more court cases after the
\ngovernment gave debtors three months in which to repay their
\ndebts.<\/p>\n
At stake is some $10 billion that is still owed to IBRA under
\na four-year debt settlement program, which for many debtors ends
\nthis year.<\/p>\n
In 1998, the largest of these debtors agreed to repay some
\n$8.8 billion in state-funded emergency loans to their banks,
\nloans that they subsequently misused.<\/p>\n
But, after three years most had still not done what they had
\nagreed to do, even though they had been released from criminal
\nliability in respect of the misused funds.<\/p>\n
Now, the government has dropped an IBRA-backed plan to extend
\nthe time limit for repayment by up to six years, and instead
\nslapped a three-month deadline on the debtors in the hope that
\nthe country's legal system will do the rest.<\/p>\n
But Hotman said this could prove to be difficult.<\/p>\n
He warned that the government might fail merely because of
\nmaking the wrong decisions in respect of who to sue in the civil
\ncourts and who to prosecute in the criminal courts.<\/p>\n
The government has said that only uncooperative debtors would
\nbe earmarked for law enforcement measures, and that it would
\nappoint legal counsel within the next 30 days to identify them.<\/p>\n
\"Thirty days is just too little to single out bad debtors,\"
\nHotman said.<\/p>\n
IBRA chairman for asset disposal Dasa Sutantio, who is
\nresponsible for collecting with the debts, said there were two
\nways to identify uncooperative debtors.<\/p>\n
\"Either they have defaulted, or breached their agreements,\"
\nDasa said, adding that to his knowledge most had defaulted.<\/p>\n
But according to Hotman, the debtors could take court
\nchallenges against IBRA's very decision to label them
\nuncooperative.<\/p>\n
If IBRA claimed that the assets the debtors had surrendered in
\npayment were insufficient to cover their debts, then the debtors
\ncould always turn to the courts and question this conclusion, he
\nsaid. This could be a time-consuming process.<\/p>\n
Bankruptcy expert Rachmat Bastian said that preparation was
\nvital and suggested that IBRA select strong cases at the outset.<\/p>\n
\"They (IBRA) should be selective in picking their cases, and
\nfocus on those that they're sure they can win,\" he said.<\/p>\n
According to Rachmat, a dose of shock therapy might be enough
\nto scare the other debtors into paying up.<\/p>\n
Both legal experts' skepticism about IBRA's chances of success
\nin the courts, reflects the lack of legal certainty the country
\nis renowned for.<\/p>\n
Creditors have long bemoaned the corruption-riddled courts,
\nwhich they say provide little legal protection and in some cases
\neven validate acts of legal harassment taken against them.<\/p>\n
IBRA's Dasa said that so far the agency had made no special
\npreparations for dealing with the likely upcoming court battles.<\/p>\n
\"We have our own internal litigation unit and we'll work with
\nthe Attorney General's Office in bringing prosecutions,\" he said,
\nexplaining the procedures in IBRA.<\/p>\n
IBRA's litigation unit could not be reached for comment.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/preparation-key-to-court-battles-against-ibra-debtors-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }