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)