BII Finance Center fights bankruptcy claim
JAKARTA (JP): Local financing company BII Finance Center challenged on Monday the bankruptcy petition filed by three foreign creditors.
The defendant's lawyer Hotman Paris Hutapea said the bankruptcy claim against his client was immature because the creditors signed an agreement in April to support BII Finance's debt rescheduling proposal.
"My client has no mature debts so the bankruptcy claim cannot be filed," Hotman said.
The 1998 Bankruptcy Law stipulates a defendant can only be named in a bankruptcy case if it has at least one mature debt and a minimum of two creditors.
Bahrain-based Arab Banking Corporation, Credit Agricole Indosuez of France and Seoul-based Asian Banking Corporation filed a bankruptcy petition against BII Finance at the Jakarta Commercial Court in early July.
The three banks were the agent banks for three syndicated loans totaling US$65.3 million extended to BII Finance.
The loans matured between October 1998 and January 1999.
The plaintiff's lawyer Luhut MP. Pangaribuan of Pangaribuan, Pondaag & Santoso law firm said a debt restructuring agreement never existed.
"My client never signed a debt restructuring agreement with BII Finance Center," he said.
Luhut said the media only had a draft of a debt restructuring agreement which was never agreed upon by both the creditors and the borrower.
"Pretending there was a debt restructuring agreement is a way to avoid paying its debts to us," he said.
The court will hand down its verdict on the case on Aug. 2.
BII Finance Center is an affiliate of publicly listed Bank Internasional Indonesia.
Separately, the Jakarta Commercial Court declared businessman Leo Andyanto bankrupt at the request of PT Astria Raya Bank. Leo failed to repay a principal loan of Rp 2 billion (about $290,000) which matured in December 1997.
Astria Raya is one of 16 banks closed by the government in November 1997, but it has not yet been liquidated.
The bank's bankruptcy claim against one of its borrowers was supported by Bank Indonesia, which is liquidating the 16 closed banks. (udi)