Court decision favors Hutama Karya against CIBC

Court decision favors Hutama Karya against CIBC

JAKARTA (JP): The Jakarta Commercial Court again saved PT
Hutama Karya from closure when it rejected on Tuesday the
bankruptcy petition filed by a foreign bank against the state
construction company.

Presiding Judge I. Gusti Nyoman Putra said the Toronto-based
Canadian Imperial Bank of Commerce (CIBC) lacked evidence to
support its claim that the bank was a holder of Hutama Karya's
promissory notes.

"After going through all the evidence we have found that CIBC
is not the buyer of the promissory notes because the notes do not
bear the Canadian bank's endorsement," Judge Nyoman told the
court.

The judge added that the legal buyer, as indicated on the
promissory notes, was local securities firm PT Bahana Securities.

The plaintiff's lawyer Rahmat Bastian, of Dermawan & Co. law
firm, said his client would appeal or refile the case with more
evidence.

"The court should not have required my client's endorsement
because the promissory notes are bearer notes," he said,
explaining that a bearer note gives full collection rights
unconditionally to the bearer.

According to Rahmat, the court admitted the existence of
Hutama Karya's debt on the promissory note but it did not find
adequate evidence showing that his client was an eligible holder
of the note.

CIBC filed a bankruptcy claim against Hutama Karya early this
month after Hutama Karya failed to repay its debt of US$1 million
in promissory notes, which matured in May 1998.

Hutama Karya was previously brought to the Jakarta Commercial
Court early this year over a similar offense. PT Jaya Readymix
and PT Primacoat Lestary jointly filed the bankruptcy petition
against the state construction company for not paying Rp 2.3
billion (about $338,000) in construction fees.

Hutama Karya won the case in the commercial court but then was
declared bankrupt at the appeal level at the Supreme Court.

However, in the final civil review decision in early April,
the Supreme Court annulled its earlier decision on the grounds
that Hutama Karya had only one creditor.

The 1998 Bankruptcy Law requires that for a party to be
declared bankrupt it must have at least two creditors.

Hutama Karya reportedly settled its debt with one of the above
claimants prior to the civil review decision.

Hutama Karya is a state construction firm under the
supervision of the Ministry of Public Works. (udi)