Modernland Realty rejects commercial court decision

Modernland Realty rejects commercial court decision

JAKARTA (JP): Property firm PT Modernland Realty rejected on
Tuesday the commercial court's decision to declare it bankrupt,
saying it would appeal to the Supreme Court to nullify the
insolvency decision.

The property firm's lawyer, Amir Syamsudin of Amir Syamsudin
and Partners, said that the court decision was hasty because the
defendant and plaintiffs had already expressed willingness to
renegotiate the debt.

"Actually we asked the panel of judges to give us seven days
to renegotiate the debt payment but the judge turned it down," he
told The Jakarta Post on Tuesday. "The judge should have been
wiser in his decision," he said.

"We will do our best to win the case in the Supreme Court," he
said.

Amir said that both the debtor and the creditors had been
working on debt payment reorganization after the creditors filed
the bankruptcy petition late last month.

"Both the creditors and debtor have almost agreed to settle
the debt payment after working on several issues," he said.

But in a surprise hearing on Monday, presiding judge Haryono
approved the insolvency petition filed by Hussein Sani and Johan
Subekti against property firm PT Modernland Realty for the
latter's failure to pay for a Rp 94.13 million debt.

Bankruptcy litigation lawyers said that the property firm
should not have been declared insolvent yet if it had proposed
submitting a suspension of payment petition to the commercial
court.

A court official said on Tuesday that the plaintiff had failed
to abide by the legal procedures, such as proposing a suspension
of payments to the commercial court, if it wanted to renegotiate
its debts.

"It is just a pity that Modernland did not propose a
suspension of payments to the court," the court official who
asked for anonymity said.

The country's ambitious bankruptcy law, which came into effect
on August 20, allows troubled Indonesian debtors to file for a
suspension of payments in the commercial court. Under this
procedure, the court issues a temporary suspension of payments
order to allow the debtor and its creditors to work out a debt
restructuring plan.

The debtor is then given up to 270 days to negotiate a
restructuring plan. Failure to do so could result in the
initiation of bankruptcy proceedings.

Amir admitted on Tuesday that his client did not propose a
suspension of payment because his client could pay the Rp 94
million debt.

The bankruptcy law allows either party involved in the dispute
to appeal to the Supreme Court. The appeal must be heard within
30 days.

But Amir said that the Jakarta Commercial Court's decision to
declare Modernland bankrupt had already damaged its client's
image.

"Though the debt is relatively small, the impact of the
bankruptcy decision is bad for my client," he said. (aly)