In Indonesia, insolvency is governed by the Bankruptcy and Suspension of Debt Payment Obligations Law (Law No. 37 of 2004). This allows creditors to initiate bankruptcy or restructuring (PKPU) proceedings when a debtor is unable to pay due and payable debts. At Farida Law Office, we advise and represent both debtors and creditors throughout these complex legal processes. We offer strategic legal solutions that align with both legal compliance and commercial viability, helping clients protect their rights, manage risks, and pursue recovery with confidence.

The legal processes of restructuring and insolvency in Indonesia are intricate and require a deep understanding of procedural and substantive law. Common issues clients face include:

• Understanding the Proceedings: The procedural differences and implications of a Suspension of Debt Payment Obligations (PKPU) versus full Bankruptcy can be confusing, yet choosing the right path is critical.

• Strict Timeframes: Both PKPU and bankruptcy proceedings operate under very tight, legally mandated deadlines, leaving little room for error in preparing and submitting documents.

• Protection of Assets: For a debtor, the primary challenge is to protect assets from being seized and distributed while attempting to negotiate a viable restructuring plan with creditors.

• Cross-Border Insolvency: For foreign creditors or debtors, the lack of an explicit law on cross-border insolvency in Indonesia adds another layer of complexity.

Our work is primarily governed by Law No. 37 of 2004 on Bankruptcy and Suspension of Debt Payment Obligations. This law is the sole legal basis for all insolvency proceedings in Indonesia. Key provisions include:

• Bankruptcy: A formal legal status declared by the Commercial Court when a debtor has two or more creditors and has failed to pay at least one due and payable debt. A curator is appointed to manage and liquidate the debtor's assets for distribution to creditors.

• PKPU (Penundaan Kewajiban Pembayaran Utang): A restructuring process initiated by the debtor or a creditor. It provides a debtor with a temporary suspension of debt payments to negotiate a court-approved peace plan with creditors.

We apply our expertise by providing strategic counsel tailored to your position as either a debtor or a creditor. For debtors, we meticulously prepare your case for PKPU, helping you secure a suspension of payments and negotiate a viable restructuring plan to avoid bankruptcy. We act as your liaison with the appointed administrator and the supervisory judge. For creditors, we provide robust representation to ensure your claims are properly registered and recognized, whether it is to pursue the liquidation of assets in bankruptcy or to maximize your recovery through a restructuring plan. Our deep understanding of the procedural rules of the Commercial Court enables us to act swiftly to protect your rights, from initiating proceedings to monitoring the administration process.

In times of financial distress, a precise and strategic legal approach is paramount. Farida Law Office provides the expertise to navigate the high-stakes world of restructuring and insolvency in Indonesia. We empower you with a clear roadmap to either restructure your business for a renewed future or to maximize your recovery, ensuring your legal and commercial interests are protected at every turn.