Golf course developer faces first bankruptcy
JAKARTA (JP): Construction firms PT Jaya Obayashi and PT Nusa Raya Cipta filed Tuesday the first bankruptcy claim in the newly established commercial court in Central Jakarta against a golf course and real estate developer.
Lawyer for the construction firms, Hotman Paris Hutapea of the Makarim and Taira S law firm, said PT Karabha Digdaya owed the two builders Rp 15.3 billion (about US$1.40 million) in construction fees and interest on the development and construction of its Emerald golf course and clubhouse in Cimanggis, West Java.
PT Karabha Digdaya is owned by Judith Soerjadjaja, the daughter of William Soerjadjaja, former owner of the country's largest automaker PT Astra International.
PT Jaya Obayashi, a joint venture between Japan's Obayashi Corp. and Indonesia's Jaya group, set up a joint operation with PT Nusaraya Cipta on April 23, 1993, to develop Karabha's Emerald course.
"Even though my clients have done their job, Karabha Digdaya has not paid the construction fee to my clients," Hotman said.
He said Karabha was recently sued by publicly listed Lippo Bank and Bank Internasional Indonesia for failing to pay back a Rp 200 billion loan owed to the two institutions.
Accompanied by fellow attorneys Anthony LP Hutapea and Jamaslin Purba, Hotman said his bankruptcy case was the first of its kind since the enactment of the new bankruptcy law on August 20.
Hotman filed the suit before I Gde Ketut Sukarata, the commercial court's chief judge.
Sukarata, who was appointed by Minister of Justice Muladi last month to head the country's first commercial court, said the court would soon appoint a three-judge panel, seven supervisory judges and 16 judges to settle bankruptcy cases in the commercial courts.
"We are expecting more bankruptcy cases but this is the first legal suit to be settled in the commercial court," Sukarta said.
Hotman said his clients were seeking a declaration from the commercial court that Karabha Digdaya was bankrupt, which would allow for the selling of its assets, including Emerald golf course and real estate, to repay the funds owed.
The government revised the bankruptcy law and set up the commercial court as part of the agreement with the International Monetary Fund (IMF) in exchange for a US$43 billion in bailout funs to prop up the country's teetering economy.
Under the new law, a company or any creditor can file for bankruptcy. The first trial must be held within 25 days of filing suit and the commercial court must hand down its decision within 30 days.
Once bankruptcy is declared, the court has 14 days to determine the dates for when creditor claims will be listed. Both company and creditor each has one opportunity to appeal to the Supreme Court and the appeal must be heard within 30 days.
Indonesian cash-strapped companies will be allowed to file for suspension of payments. Under this procedure, the court issues a temporary payment suspension order during which time the debtor and creditors will work out a restructuring plan. The company is given up to 270 days to negotiate reorganization and failure to do so could result in the initiation of bankruptcy proceedings.
The country's old bankruptcy law, dating back to 1905 during Dutch colonial rule, was insufficient in the wake of mounting business collapses caused by the deepening economic crisis.
Hotman said his law firm expected to file nine more bankruptcy cases in the months ahead, mostly from Singapore banks, which had provided huge lending to the country's debt-laden companies.
"But we cannot disclose any names yet because we are working on completing the documents," he said. (aly)