Bakrie Finance survives claim for bankruptcy

Bakrie Finance survives claim for bankruptcy

JAKARTA (JP): The Supreme Court has overruled its earlier
decision that declared PT Bakrie Finance Corporation bankrupt,
according to Bakrie's lawyer.

Jonson Hutajulu said on Tuesday that the verdict was issued by
the Supreme Court's review panel of three judges on July 13. The
judges were Ketut Suraputra, Mariana Sutadi and Soeharto.

The Supreme Court Civil Review panel said in the verdict that
the four Hong Kong-based creditors could not file bankruptcy
against Bakrie Finance as they had loaned the money to Bakrie
through Asian Banking Corp. as an agent of the syndicated loans.

The four foreign creditors are AB Capital Markets Ltd., Cho
Hung Leasing & Finance Ltd., Hanmi Leasing & Finance Ltd. and KEB
Leasing and Finance Ltd.

The four creditors filed a bankruptcy suit for the second time
in mid-February against Bakrie Finance at the Jakarta Commercial
Court for the company's failure to pay US$13.5 million in debts.

Jonson said that based on the agreement between Bakrie Finance
and Asian Banking Corp., as the arranger of the loans, it could
only be Asian Banking Corp. that could take legal action against
Bakrie after the bank received a mandate from the majority of the
creditors.

"We hope this decision can be used as a legal ground for other
similar cases that might appear in the future," Jonson said.

A Supreme Court Civil Review is the final level of the
Indonesian Bankruptcy Court after the appeal level, also at the
Supreme Court.

The Supreme Court, previously at the appeal level, declared
Bakrie Finance bankrupt in mid-May, overruling a previous verdict
by the Jakarta Commercial Court which initially saved the company
from bankruptcy.

The Supreme Court in its appeal verdict accepted the
creditors' plain and simple arguments that the defendant had a
matured debt and owed money to at least two creditors.

According to the 1998 Bankruptcy Law, a party to be declared
bankrupt must have at least one matured debt and owe to two
creditors or more.

Besides Bakrie Finance, PT Bakrie Investindo, the majority
owner of publicly-listed PT Bakrie & Brothers is also facing a
bankruptcy suit from an individual named Atas Rifara.

Atas' lawyer Dwi Ria Latifa from Rialatifa & Partners law firm
said Bakrie Investindo allegedly failed to repay a Rp 1 billion
(US$106,000) promissory note that matured in January 1998.
(udi/rid)