Davomas wants debt payment halted
Davomas wants debt payment halted
JAKARTA (JP): Publicly listed cocoa producer PT Davomas Abadi
is to ask Central Jakarta Commercial Court to suspend the payment
of its US$3 million debt to American Express Bank.
Lawyers representing the company, Hotman Paris Hutapea of
Makarim and Taira and Denny Kailimang of Kailimang, said on
Tuesday that their clients would file for a suspension of payment
within the next two days.
"We will submit the proposal for the suspension of the payment
to the commercial court either on Wednesday or Thursday," Hotman
said after the second hearing on the bankruptcy case pitting
American Express Bank against Davomas Abadi.
He acknowledged that his client owed a total US$3 million in
promissory notes to the American Express Bank (Amex).
Amex, a unit of the American Express Co., filed a bankruptcy
claim against the cocoa producer at Jakarta's commercial court on
Sept. 3 after the latter failed to redeem the US$3 million
promissory notes which matured on Jan. 7 this year.
In the court proceedings, lawyers for the plaintiffs, J. Cemby
Hutapea of Kemalsjah of Cemby & Avriline demanded the court
declare PT Davomas bankrupt and sell its assets if it failed to
pay its debts.
The new bankruptcy law allows troubled Indonesian companies to
file a suspension of payments. Under the procedure, the court can
issue a temporary payment suspension order during which time the
debtors and creditors will work out a reorganization plan.
The debtor is then given up to 270 days to renegotiate the
debts. Failure to do so will result in the initiation of
bankruptcy proceedings.
If it does not issue a payment suspension order, the court
must hand down its decision within 30 days of the suit being
filed and any appeal must also be heard within 30 days.
Indonesia enacted ambitious new bankruptcy legislation on Aug.
21, replacing an antiquated law which had been in place since
1906 and had proved to be insufficient in settling bankruptcy
cases.
Presiding judge Kristi did not make any decision on Tuesday
but adjourned the hearing until next Monday to allow the
commercial court to verify the documents for suspension of
payment. (aly)