Fee for commercial court administrator 'too high'
JAKARTA (JP): Golf course and clubhouse developer PT Karabha Digdaya said on Thursday that the commercial court's decision to impose a five percent fee for the appointed administrator to take charge of its assets would be a further blow to its weak financial condition.
Edino Girsang from the Yan Apul law firm, who represented PT Karabha in the hearing, said that the fee -- five percent of the company's total assets -- was too high given the size of the disputed debt.
"With total assets of Rp 1.3 trillion, this means that the administrator will receive Rp 75 billion in commission fees from Karabha. It means the fee will be four times higher than the Rp 15.3 billion owed by Karabha to the plaintiffs," he said.
Besides being too high, the fee for the administrator was not stipulated in the bankruptcy law, he told reporters following the court's third bankruptcy proceeding pitting Karabha against PT Jaya Obayashi and PT Nusa Raya Cipta.
On Thursday, the Jakarta Commercial Court approved the request by golf course and clubhouse developer PT Karabha Digdaya to temporarily suspend payment of an Rp 15.3 billion (about US$1.4 million) construction fee to PT Jaya Obayashi and PT Nusa Raya Cipta.
The presiding judge, Haryono, who chaired the court hearing, said the court had accepted the request and appointed a supervisory judge and an administrator to take charge of the debtor's assets.
"We appoint Suryanto as the supervisory judge and Marjan Pane as the administrator to manage Karabha's assets," he told the hearing.
Suryanto is a judge appointed by the Jakarta Commercial Court while Marjan Pane is a trained administrator from Tumbuan and Pane law firm appointed by the plaintiffs.
According to the newly introduced bankruptcy law, the court must appoint a supervisory judge and an administrator if it accepts the request for a suspension of payments to protect the assets of debtors.
Hotman Paris Hutapea of Makarim and Taira S. law firm, the plaintiff's lawyer, said he was also surprised at the high administration fee imposed by the court.
"It's a lot of money ... I'd better become an administrator instead of a lawyer then," he joked.
However, Haryono did not respond to concerns voiced by the lawyers.
The new bankruptcy law allows debt-ridden Indonesian firms to file for a suspension of debt repayments. Under this procedure the court issues a temporary suspension of payment order during which time debtors and creditors must work out a reorganization plan.
Debtors are given up to 270 days to negotiate a reorganization of payments, and failure to do so could result in the initiation of bankruptcy proceedings.
When a company is declared bankrupt, the court will appoint a receiver or curator to administer the assets of the debtor.
There have been five bankruptcy claims brought to the Jakarta Commercial Court so far. Most debtors have sought a suspension of payment order.
Cocoa producer Davomas Abadi, which was unable to repay US$3 million in promissory notes to the American Express Bank when they matured on Jan. 7 this year, has submitted a request for a suspension of payment order.
The commercial court will have to decide whether or not to accept the request today (Friday).
Ometraco Multi Artha, a subsidiary of the public-listed PT Ometraco Corporation has submitted a request to suspend repayment of a US$140 million syndication loan to a consortium led by the American Express Bank.
Lawyers who have been following the bankruptcy hearings over the past two weeks voiced concerns over the commission fee charged by the Jakarta Commercial Court on Thursday.
"The commission fee is just too much ... our bankruptcy law is still new and now we don't know the prospects for commercial proceedings in the future," one lawyer who asked for anonymity said. (aly)