Lawyer criticizes bankruptcy fee

Lawyer criticizes bankruptcy fee

JAKARTA (JP): A corporate lawyer has criticized a justice
ministry decision to impose a 3 percent commission fee for
administrators and a 2 percent fee for curators in bankruptcy
cases.

Lawyer Hotman Paris Hutapea of Makarim and Taira S law firm
said on Monday that a Sept. 22 Ministry of Justice decree on
administrator and curator fees could harm the future operations
of the commercial court.

"The commission fees imposed by the ministerial decree are
just too high," he told The Jakarta Post after a court hearing
pitting American Express Bank and cocoa producer PT Davomas Abadi
on Monday.

He said the high fees would further burden financially
troubled debtors taken to court by creditors or their business
partners.

The decree requires that administrators, in charge of debtors'
assets following court suspension of payment orders, be paid a
maximum of 3 percent of debtors' assets.

Curators, or receivers who manage debtor assets after
bankruptcy is declared, are to receive a maximum of 2 percent of
debtors' total assets.

Hotman said the fees should not be based on a percentage of
debtors' assets but on their working hours, as was done in many
developed countries.

The regulation was issued last week following a controversial
decision to grant a 5 percent commission fee to the administrator
of PT Karabha Digdaya's assets in its court case.

The decision will allow the administrator of Karabha's assets
to take a Rp 65 billion commission of the company's Rp 1.3
trillion in total assets, much more than the Rp 15.3 billion the
company owed to the plaintiffs.

Davomas

In a later development, the Jakarta Commercial Court approved
on Monday a request by publicly listed cocoa producer PT Davomas
Abadi to temporarily suspend the payment of its US$3 million in
promissory notes owed to American Express Bank.

Hotman, representing American Express, said the law required
the plaintiff and the defendant to attempt a renegotiation of the
debt within 45 days.

"We expect there will a be friendly resolution to our case,"
he told reporters after the hearing.

Presiding judge Ch. Kristi Purnami Wulan also appointed Untung
Haridjadi as the supervisory judge and William Eduard Daniel as
the administrator to safeguard the debtor's assets during the
payment suspension period.

She did not, however, ruled out the commission fee for the
administrator.

The country's ambitious new bankruptcy law, which came into
effect on Aug. 20, allows a defendant to file for a payment
suspension order to the court.

The commercial court must approve a temporary suspension,
valid for 45 days, and appoint a supervisory judge and an
administrator to safeguard the debtor's assets. (aly)