{"id":107334,"date":"2025-07-08T10:47:00","date_gmt":"2025-07-08T10:47:00","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=107334"},"modified":"2025-08-20T15:02:50","modified_gmt":"2025-08-20T15:02:50","slug":"indonesia-restructuring-insolvency","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/indonesia-restructuring-insolvency\/","title":{"rendered":"Indonesia: Restructuring &amp; Insolvency"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-107334","comparative_guide","type-comparative_guide","status-publish","hentry","guides-restructuring-insolvency","jurisdictions-indonesia"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Sandiva<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2020\/05\/sandiva.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Sandiva<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2020\/05\/sandiva.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Restructuring &amp; Insolvency laws and regulations applicable in Indonesia<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What forms of security can be granted over immovable and movable property? What formalities are required and what is the impact if such formalities are not complied with?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Security rights over immovable and movable property are covv by virtue of an agreement including <em>hak tanggungan<\/em>, pledge, and fiduciary security.av<\/p>\n<p><em>Hak tanggungan<\/em><\/p>\n<p>A <em>hak tanggungan<\/em>, a real security right over land and land-related objects and the nearest equivalent to a \u2018mortgage\u2019 as understood in other jurisdictions. The \u2018objects\u2019 or \u2018goods\u2019 referred to include buildings, plants, and produce now existing or which may exist in the future and which form an inseparable part of the land, whether or not such buildings, plants, or produce are owned by the titleholder of the land. A <em>hak tanggungan<\/em> must be in notarial deed form, must be registered at the Land Office, and will be effective upon registration in the Security Right Book maintained by the Land Office in the jurisdiction where the land is located.<\/p>\n<p>Pledge<\/p>\n<p>A pledge, like a <em>hak tanggungan<\/em>, is a security right in rem. However, unlike a <em>hak tanggungan<\/em>, it can only have as its object movable properties, whether tangible (such as machines, vehicles, inventories, etc.) or intangible. The establishment of a pledge is dependent on the nature of the goods and can thus be classified as follows:<\/p>\n<ol style=\"padding-left: 0\" type=\"i\">\n<li>A pledge of tangible movable goods and bearer instruments &#8211; by delivery of the goods or the instruments into the physical possession of the pledgee or a third party agreed upon by the parties;<\/li>\n<li>A pledge of intangible movable goods (except the above-mentioned bearer and order instruments) &#8211; by notification of the pledge concerned to the party against whom the rights pledged will have to be enforced.<\/li>\n<\/ol>\n<p>The law does not require a pledge agreement to be in writing. Nevertheless, in practice, pledge agreements are always incorporated in a written document.<\/p>\n<p>Fiduciary security<\/p>\n<p>Fiduciary security is a non-possessory of security right object movable properties, whether tangible (such as machines, vehicles, inventories, etc.) or intangible (such as accounts receivable, shares). The security is established in a notarial deed will be effective upon registration with the Fiduciary Registration Office to obtain a Fiduciary Registration Certificate.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What practical issues do secured creditors face in enforcing their security package (e.g. timing issues, requirement for court involvement) in out-of-court and\/or insolvency proceedings?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In an out-of-court process, secured creditors can enforce their security through auction via the State Auction Office. After submitting application for auction and complete documents, an auction date can be set by the State Auction Office between 1.5 to 2 months.<\/p>\n<p>Secured creditors generally find obstacles in selling fixed assets (ie land properties) thru auction if the asset is still occupied by the Debtor. As most buyers do not want to incur additional cost to relocate the debtor or any party occupying the asset.\u00a0 Thus, making potential investor very specific.<\/p>\n<p>One of the requirement for auction is for the secured objects to be under the control of the creditor.\u00a0 However, most debtors are not willing to surrender secured movable assets to the creditor for enforcement.<\/p>\n<p>In insolvency proceedings, although the rights of secured creditors are acknowledged by the law as not being affected by bankruptcy, the law, as a general rule waives the rights of secured creditors (and any party whose assets are under the control of the bankrupt) to foreclose their security for a period of 90 days from the date of the bankruptcy declaration. After 90 days have lapsed or the debtor has been declared insolvent, the secured creditor may enforce their security within 2 months.<\/p>\n<p>As for a Delay of Payment (restructuring proceeding), the stay period is as long as the Delay of Payment period, which can last up to 270 days. If the debtor is declared bankrupt before or after the 270 days have lapsed, there will be no stay period, the secured creditor may enforce their security within two months after the debtor is declared bankrupt.<\/p>\n<p>If within two months, the secured creditor has not started or succeeded in enforcing the security, the object of the security must be handed over to the appointed receiver(s).\u00a0 The receiver will have the right to sell the object of security.<\/p>\n<p>Many secured creditors face the challenge to meet the two months, from scheduling an auction date with the State Auction Office, securing the object, and securing a potential buyer.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What restructuring and rescue procedures are available in the jurisdiction, what are the entry requirements and how is a restructuring plan approved and implemented? Does management continue to operate the business and \/ or is the debtor subject to supervision? What roles do the court and other stakeholders play?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Delay of Payment can be applied for by a debtor who has more than one creditor or by a creditor. The debtor can submit a Delay of Payment Application (DOP Application) of his own will or in response to a filing for bankruptcy submitted by a creditor.<\/p>\n<p>The debtor in the first hearing of bankruptcy application may submit a DOP Application. The court must then decide on the Delay of Payment prior to the bankruptcy application. Therefore, an application for a Delay of Payment overrides any pending bankruptcy or other court proceedings. The Delay of Payment application is followed by proposing an amicable settlement plan for approval by the unsecured and secured creditors.<\/p>\n<p>If the temporary Delay of Payment has been granted, the court appoints a supervisory judge and one or more Administrators who, jointly with the debtor, will manage the debtor\u2019s assets<\/p>\n<p>During a temporary or permanent Delay of Payment:<\/p>\n<ol style=\"padding-left: 0\" type=\"a\">\n<li>the management of the debtor\u2019s business is placed under the supervision of one or more administrators who in turn are supervised by a supervisory judge.<\/li>\n<li>if any of the debtor\u2019s obligations are met without prior approval from the administrator after the Delay of Payment decision, they can only be charged to the debtor\u2019s assets if they benefit the debtor\u2019s assets.<\/li>\n<li>during the period of the temporary\/permanent Delay of Payment, the debtor is relieved from liability to pay his debts.<\/li>\n<li>enforcement of creditors&#8217; claims secured by pledges, <em>hak tanggungan<\/em>, fiduciary agreements, and other priority rights may not be enforced nor may secured assets attached by the creditors.<\/li>\n<li>the proceedings already commenced by the court do not end, nor does it preclude the initiation of new proceedings.<\/li>\n<\/ol>\n<p>As in bankruptcy, the law waives the rights of secured creditors (and any party whose assets are under the control of the bankrupt) to foreclose on their security.\u00a0 As for a Delay of Payment, the stay period is as long as the Delay of Payment period, which can last up to 270 days.<\/p>\n<p>The creditors\u2019 meeting must decide whether to approve the amicable settlement plan.\u00a0 The votes needed to approve the amicable settlement plan are:<\/p>\n<ol style=\"padding-left: 0\" type=\"a\">\n<li>more than 1\/2 of the unsecured creditors attending the meeting and holding at least 2\/3 of the unsecured debt;<\/li>\n<li>more than 1\/2 of the creditors whose accounts receivable are encumbered by a pledge, fiduciary agreement, <em>hak tanggungan,<\/em> hypothec, or other collateral rights over property attending the meeting and holding at least 2\/3 of the unsecured debt;<\/li>\n<\/ol>\n<p>If the amicable settlement plan is not approved up to the minimum requirement, then the debtor is declared bankrupt.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can a debtor in restructuring proceedings obtain new financing and are any special priorities afforded to such financing (if available)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The debtor may obtain new financing with prior approval from the administrator(s) and if the financing requires security, the financing must also be approved by the supervisory judge.\u00a0 There are no priorities for the new financing.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can a restructuring proceeding release claims against non-debtor parties (e.g. guarantees granted by parent entities, claims against directors of the debtor), and, if so, in what circumstances?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No, however, it has been observed in amicable settlement plans that require the release of guarantees.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How do creditors organize themselves in these proceedings? Are advisory fees covered by the debtor and to what extent?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Creditors can follow the proceedings with or without being accompanied by advisors starting from claim submission, claim verification meetings, and negotiating the amicable settlement plan.<\/p>\n<p>The cost of advisory services cannot be charged to the Debtor, unless it is agreed by the Debtor. Creditor(s) may negotiate with the debtor to cover the advisory fees in the amicable settlement plan.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the test for insolvency? Is there any obligation on directors or officers of the debtor to open insolvency proceedings upon the debtor becoming distressed or insolvent? Are there any consequences for failure to do so?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The law is silent for a test for insolvency. In the elucidation of the law, insolvency is defined as a condition of being unable to pay. Under the law, insolvency can occur because:<\/p>\n<ol style=\"padding-left: 0\" type=\"a\">\n<li>in the verification meeting the debtor does not propose an amicable settlement plan;<\/li>\n<li>the amicable settlement plan is rejected;<\/li>\n<li>ratification of the amicable settlement plan is denied by a final and binding decision.<\/li>\n<\/ol>\n<p>Directors or officers of the debtor are not required or mandatory to open insolvency procedures upon the debtor becoming distressed or insolvent. As a general rule, directors of a solvent company owe fiduciary duties only to its shareholders, and not to its creditors.<\/p>\n<p>A declaration of bankruptcy (insolvency proceeding) may be applied for by the debtor if the debtor has two or more creditors and not have paid at least one debt already past due.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What insolvency proceedings are available in the jurisdiction? Does management continue to operate the business and \/ or is the debtor subject to supervision? What roles do the court and other stakeholders play? How long does the process usually take to complete?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>A declaration of bankruptcy may be applied for by the debtor, creditor, or by a third party.\u00a0 Bankruptcy is defined as the <em>\u2018<\/em>General confiscation of all assets of a bankrupt debtor that will be managed and liquidated by a receiver under the supervision of a supervisory judge\u2019.<\/p>\n<p>The purpose of bankruptcy is for a receiver (<em>kurator<\/em>) to divide up the debtor\u2019s wealth among all the creditors concerning each creditor\u2019s rights. General confiscation also covers a debtor\u2019s wealth outside of Indonesian sovereign territory.<\/p>\n<p>A filing has a very restrictive time limit; it must be approved or denied by the court within 60 days from the date of the filing.\u00a0 The date of the bankruptcy declaration commences at 00.00 local times (zero-hour rule).<\/p>\n<p>Once the Commercial Court has declared the debtor \u2018bankrupt\u2019, the debtor loses the right to manage, and control his assets, and the power to dispose of his property and this power passes to the appointed receiver under the supervision of a supervisory judge. The judge supervises the conduct of the receiver and, for certain of the receiver\u2019s actions, must approve.<\/p>\n<p>The length of the liquidation may vary depending on how fast the receiver can liquidate all the debtor\u2019s assets.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What form of stay or moratorium applies in insolvency proceedings against the continuation of legal proceedings or the enforcement of creditors\u2019 claims? Does that stay or moratorium have extraterritorial effect? In what circumstances may creditors benefit from any exceptions to such stay or moratorium?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Any legal proceeding claiming for fulfillment from the bankruptcy estates shall be null and void upon declaration of bankruptcy. The declaration of bankruptcy will also affect the enforcement of court judgments against the bankruptcy estates which has proceeded before the declaration of bankruptcy. The enforcement of court judgment must cease immediately.<\/p>\n<p>If enforcement of security has proceeded before the declaration of bankruptcy and the date of the enforcement has been determined, the receiver with permission from the supervisory judge may continue the enforcement of security.<\/p>\n<p><u>Stay Period<\/u><\/p>\n<p>The law as a general rule waives the rights of secured creditors (and any party whose assets are under the control of the bankrupt) to foreclose their security for a period of 90 days from the date of the bankruptcy declaration.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How do the creditors, and more generally any affected parties, proceed in such proceedings? What are the requirements and forms governing the adoption of any reorganisation plan (if any)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The creditors or any third party may request that the receiver waives or amend the requirements of the 90 days stay period. If the receiver rejects the request, the creditor or the third party may file a petition to the supervisory judge. The creditors or the third party can file an objection (<em>perlawanan<\/em>) to the court. The decision of the court in this regard is final and binding.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How do creditors and other stakeholders rank on an insolvency of a debtor? Do any stakeholders enjoy particular priority (e.g. employees, pension liabilities, DIP financing)? Could the claims of any class of creditor be subordinated (e.g. recognition of subordination agreement)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Security rights conferred by law are general in nature.\u00a0 They encompass all (unencumbered) assets of a debtor. Conferment by law can be found in Article 1131 of the Indonesian Civil Code (ICC) which states that all assets of a debtor, movable as well as immovable, existing presently as well as in the future, may constitute security for a debtor&#8217;s debts.\u00a0 All the debtor&#8217;s creditors have \u2018pari passu pro rata\u2019 rights to such assets.\u00a0 As mentioned in Article 1131 ICC, \u2018The proceeds of the foreclosure of such assets shall be divided \u201cpari passu pro rata parte\u201d amongst his creditors\u2019 unless there is a valid reason to give preference to the certain creditor(s).\u00a0 Preference amongst the creditors may arise from preferential rights.<\/p>\n<p>In general, creditors are divided into three main categories; preferred creditors, secured creditors, and unsecured creditors.<\/p>\n<p>The following classes of debt have priority over all unsecured debts.<\/p>\n<ol style=\"padding-left: 0\" type=\"a\">\n<li>the costs and expenses of liquidating the assets incurred by the receiver<\/li>\n<li>the receiver\u2019s fee<\/li>\n<li>creditors who have a preferred right, including those whose priority rights are denied. If the payment above is not sufficient to cover all claims of the preferred creditors, the creditors will be considered as the unsecured creditors for the remaining debts owned by them.<\/li>\n<li>creditors holding pledge, fiduciary security, <em>hak tanggungan<\/em>, hypothec, or other collateral right on assets, as long as they have not yet received payment from the proceeds of the sale of the security, will be settled from the proceeds of the sale of properties in which they have a priority right or that were secured as collateral to them.<\/li>\n<\/ol>\n<p>The tax has preferred right from all debtor\u2019s assets. Employees also enjoy a priority of their claims. Unpaid wages\/salary will have preferred rights before all secured creditors. As for severance payment will be prioritised over unsecured creditors but not before secured creditors.<\/p>\n<p>All unsecured creditors shall be granted a percentage that is determined by the supervisory judge.<\/p>\n<p>Claims of any class of creditors cannot be subordinated.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can a debtor\u2019s pre-insolvency transactions be challenged? If so, by whom, when and on what grounds? What is the effect of a successful challenge and how are the rights of third parties impacted?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p><em>Actio Pauliana<\/em> is a principle that protects the creditor\u2019s rights, which is an effort by creditors to cancel the debtor\u2019s legal acts, which may cause losses to the creditor\u2019s interest, which were conducted before the declaration of bankruptcy.<\/p>\n<p>A lawsuit for the annulment of the debtor\u2019s legal acts may be filed in the court, and the annulment will only be implemented if it can be proved that at the time of the performance of the legal acts, the debtor and the party with whom the debtor performed the legal acts were aware or should have been aware that the legal act would adversely affect the creditors.<\/p>\n<p>If the transaction was entered into within a year prior to the bankruptcy declaration and the bankrupt debtor was not required to enter the transaction, both the bankrupt and the counterparty are deemed to have known or should have known that the transaction in question would harm the interest of the creditors.<\/p>\n<p>In a successful challenge, any transaction made must be returned to its original condition before the transaction.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How existing contracts are treated in restructuring and insolvency processes? Are the parties obliged to continue to perform their obligations? Will termination, retention of title and set-off provisions in these contracts remain enforceable? Is there any ability for either party to disclaim the contract?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>For existing contracts, the contracting parties may ask the receiver(s)\/administrator(s) to give certainty whether the contract will continue or be terminated.\u00a0 If the receiver does not respond to the request or decides to terminate the contract, the contracting party may claim damages and will be treated as an unsecured creditor.<\/p>\n<p>However, if the existing contract requires the debtor to deliver goods sold, the contract is automatically terminated since the debtor is declared bankrupt. The contracting party may also claim for damages and will also be treated as an unsecured creditor.<\/p>\n<p>If the contract relates to rent or lease, the receiver or the contracting parties may terminate the rent or lease agreement with a minimum prior notice of 90 days.\u00a0 If rent or lease has been paid upfront, the contract cannot be terminated.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What conditions apply to the sale of assets \/ the entire business in a restructuring or insolvency process? Does the purchaser acquire the assets \u201cfree and clear\u201d of claims and liabilities? Can security be released without creditor consent? Is credit bidding permitted? Are pre-packaged sales possible?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Insolvency<\/p>\n<p>The sale of assets by the receivers in insolvency must be done thru a public auction. If the public auction does not succeed after reaching the liquidation value, the receiver may ask for approval from the supervisory judge to sell it thru a private sale. The purchase will acquire the assets free and clear of claims and liabilities. Under the law, the security will be released thru a release decree by the supervisory judges after the listing of distribution of proceeds is accepted.\u00a0 However, in practice, the creditor(s) will release the security after the list of the asset(s) has been sold.<\/p>\n<p>Credit bidding is not acknowledged in Indonesia. However, creditors (limited to the bank(s) may participate in the auction and make a cash bid. Pre-packaged sales are not permitted as receivers must sell it thru public auction.<\/p>\n<p>In a restructuring process, the sale of assets must obtain prior approval from the administrator, and if it is being encumbered must also be approved by the creditor holding the security.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What duties and liabilities should directors and officers be mindful of when managing a distressed debtor? What are the consequences of breach of duty? Is there any scope for other parties (e.g. director, partner, shareholder, lender) to incur liability for the debts of an insolvent debtor and if so can they be covered by insurances?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Each member of the board of directors will be held personally liable for any company losses if the relevant person is found at fault or negligent in carrying out his duties.<\/p>\n<p>A member of the board of directors cannot be held liable for the loss if he\/she can prove that:<\/p>\n<ol style=\"padding-left: 0\" type=\"a\">\n<li>the loss was not incurred because of his fault or negligence;<\/li>\n<li>he\/she has managed in good faith and with due care in the company\u2019s best interest and in accordance with the company\u2019s purposes and objectives;<\/li>\n<li>he\/she has no conflict of interest, either directly or indirectly, in the management action that caused the loss;<\/li>\n<li>he\/she took measures to prevent the loss from occurring or continuing.<\/li>\n<\/ol>\n<p>Further, the Company Law regulates that if bankruptcy occurs due to a fault or the negligence of the board of directors and the company\u2019s bankruptcy assets are inadequate to settle all the company\u2019s liabilities caused by the bankruptcy, then each member of the board of directors shall be held jointly and severally liable for all the outstanding liabilities of the bankruptcy assets.<\/p>\n<p>The above liability will also apply to members of the board of directors found to be at fault or negligent who were members of the board of directors for five years prior to bankruptcy is declared.<\/p>\n<p>The board of commissioners can also be held liable if bankruptcy is caused by the fault or negligence of the board of commissioners in supervising the management performed by the board of directors.<\/p>\n<p>This responsibility can be borne by insurance if the directors and stakeholders have Directors and Officers (D&amp;O) Liability Insurance, then the coverage can be transferred to insurance while still considering the Duty of care and Duty of loyalty.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Do restructuring or insolvency proceedings have the effect of releasing directors and other stakeholders from liability for previous actions and decisions? In which context could the liability of the directors be sought?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Neither restructuring nor insolvency proceedings will release directors and other stakeholders from liability for previous actions or decisions.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Will a local court recognise foreign restructuring or insolvency proceedings over a local debtor? What is the process and test for achieving such recognition? Does recognition depend on the COMI of the debtor and\/or the governing law of the debt to be compromised? Has the UNCITRAL Model Law on Cross Border Insolvency or the UNCITRAL Model Law on Recognition and Enforcement of Insolvency-Related Judgments been adopted or is it under consideration in your country?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No, the Indonesian court will not recognise foreign restructuring or insolvency proceedings.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">For EU countries only: Have there been any challenges to the recognition of English proceedings in your jurisdiction following the Brexit implementation date? If yes, please provide details.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>N\/A<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can debtors incorporated elsewhere enter into restructuring or insolvency proceedings in the jurisdiction? What are the eligibility requirements? Are there any restrictions? Which country does your jurisdiction have the most cross-border problems with?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, if the debtors have permanent establishment in Indonesia.\u00a0 Most cross border would be with Singapore, as many debtors in Indonesia have bank accounts or assets in Singapore.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How are groups of companies treated on the restructuring or insolvency of one or more members of that group? Is there scope for cooperation between office holders? For EU countries only: Have there been any changes in the consideration granted to groups of companies following the transposition of Directive 2019\/1023?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The companies within a group are still treated as individual legal entities and must still file separate restructuring or insolvency applications.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is your country considering adoption of the UNCITRAL Model Law on Enterprise Group Insolvency?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Not that we are aware of.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any proposed or upcoming changes to the restructuring \/ insolvency regime in your country?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The last changes to the restructuring\/insolvency regime were in 2004. Since then, there had been discussion at the Ministry level proposing an amendment to the law. However, like in recent years, these discussions to amend the law faded away.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is your jurisdiction debtor or creditor friendly and was it always the case?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The law emphasises the rights of creditors over debtors and as such can be seen as a creditor-friendly jurisdiction. Whilst there are some limitations on the options that might otherwise be available to distressed companies and some inflexibility in certain of the tools available to insolvency practitioners, Indonesia\u2019s insolvency regime is, for the most part, primarily focused on protecting the rights and interests of creditors over the interests of debtors.<\/p>\n<p>Creditors are active participants in all insolvency processes in Indonesia. They can enforce their rights in each process, whilst there are some timing limitations placed on their enforcement rights over secured assets.<\/p>\n<p>Secured creditors and employees enjoy a statutory priority in the distribution of assets. Unlike secured creditors, unsecured creditors are given no legal right to priority.<\/p>\n<p>There had been efforts mostly from business associations to amend the law, to add more stringent requirements for creditors filing bankruptcy petition.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Do sociopolitical factors give additional influence to certain stakeholders in restructurings or insolvencies in the jurisdiction (e.g. pressure around employees or pensions)? What role does the State play in relation to a distressed business (e.g. availability of state support)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There is very little state involvement or government intervention for distressed businesses.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the greatest barriers to efficient and effective restructurings and insolvencies in the jurisdiction? Are there any proposals for reform to counter any such barriers?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There are still many governments agencies that do not understand the insolvency proceedings which impacts to the speed of liquidating the assets.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">4287<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/107334","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=107334"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}