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)