Landasan Terus slams bankruptcy ruling

Landasan Terus slams bankruptcy ruling

JAKARTA (JP): PT Landasan Terus Sentosa of the Ongko Group
challenged on Friday the bankruptcy ruling issued by the Jakarta
Commercial Court.

John K. Azis, a lawyer representing Landasan Terus, said the
court's bankruptcy ruling not only breached the spirit of the
Bankruptcy Law but also directly interfered with the company's
good-faith efforts to reach a debt settlement with creditors.

"The commercial court cannot declare a debtor bankrupt while
the debtor is requesting time for debt restructuring negotiations
with its creditors," John said quoting the 1998 Bankruptcy Law.

Time for further negotiations must be granted by the court,
and only if such negotiations prove futile can the court declare
the debtor bankrupt, according to John.

Landasan Terus, along with its three sister companies under
the Ongko Group, was taken to the commercial court by the
Indonesian Bank Restructuring Agency (IBRA) in early July for
failing to repay Rp 270 billion in matured debts.

The commercial court declared Landasan Terus bankrupt early
this week after rejecting the company's Rp 270 billion debt
restructuring proposal. This is the first bankruptcy case won by
IBRA after a series of defeats.

The presiding Judge said the company failed to prove to the
commercial court it was acting in good faith and being
cooperative and consistent in its efforts to settle its debts.

He also claimed the company -- in what the court saw as a sign
of bad faith -- submitted its debt restructuring proposal to the
commercial court at the last minute after denying the existence
of bad debts in earlier court hearings.

John denied Landasan Terus submitted the debt restructuring
proposal at the last minute, claiming there were 10 days between
the date the proposal was submitted to the court and the date the
court declared the company bankrupt.

"We really regret the presiding judge's negative comments that
our debt restructuring proposal was not based on good faith," he
said.

Again referring to the Bankruptcy Law, John also said the
commercial court was not in a position to judge whether its debt
restructuring proposal was reasonable.

"In fact, we have shown good faith because we still want to
negotiate a debt restructuring deal through our submitted debt
restructuring proposal," he said.

Any item which the creditors may find unacceptable in our debt
restructuring proposal will be left for further negotiations,
according to John. (udi)