Golf course developer faces first bankruptcy
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)