Commercial court declares Korean joint venture bankrupt

Commercial court declares Korean joint venture bankrupt

JAKARTA (JP): The Jakarta Commercial Court has declared
Banjarmasin-based plywoodmaker PT Duree Timber Indonesia bankrupt
over its unpaid debt of US$1.5 million to PT Hanil Tamara Bank,
the plaintiff's lawyer said.

Jonson Hutajulu of Fuady, Tommy and Aji Wijaya law firm, who
was representing the plaintiff, said the bankruptcy verdict was
handed down last Tuesday.

"We have managed to prove, as stipulated in the Bankruptcy
Law, that the defendant has at least one matured debt and two
creditors before being declared bankrupt," Jonson told The
Jakarta Post over the phone on Monday.

The plaintiff and bankrupt defendant are South Korean joint
ventures operating in Indonesia.

Jonson said his client advised the defendant, prior to the
bankruptcy filing, to avoid legal action by working out a debt
restructuring proposal.

But the plywoodmaker did not respond to the call, Jonson said.

The debt, which matured between September 1998 and October
1998, were loan facilities used by the defendant for its export
and import activities and other operations, Jonson said.

As much as $830,000 was for the defendant's export and import
activities through Letter of Credit (L/C) facilities, $500,000
was for other operating activities and some $170,000 was for
overdue interest payments.

Jonson acknowledged his client purposely did not include the
penalty charge on its overdue interest payments so as not to
confuse the court with a questionable figure.

"The penalty charge could cancel the status that the loan had
matured," he said.

There was at least one previous case where a bankruptcy file
was rejected by the court because there was a penalty charge
included in the unpaid debt claim, Jonson said.

Besides, the 1998 Bankruptcy Law only specifically recognized
the existence of a debt principal and its overdue interest
payment, Jonson added.

PT Duree Timber Indonesia is a foreign affiliate of Duree
Lumber Industrial Co. Ltd. of South Korea, which has a stake of
more than 90 percent in the company concerned. (udi)