Legal Services
Suspension of Debt Payment Obligations (PKPU)
PKPU is a mechanism utilized by both Debtors and Creditors when a Debtor is deemed unable or expected to no longer be able to proceed with the repayment of its matured and collectible debts. The primary objective is to reach a composition plan—encompassing offers for partial or full debt settlement to Creditors—so that the Debtor can avoid bankruptcy, as mandated by the provisions of Article 222 in conjunction with Article 228 paragraph (5) of Law No. 37 of 2004 concerning Bankruptcy and Suspension of Debt Payment Obligations.
Furthermore, PKPU can be understood as a specific timeline or moratorium granted by the Law via a Commercial Court judgment. Within this period, Creditors and Debtors are given an equitable opportunity to deliberate on payment methods for all or a portion of the debts, including corporate or financial debt restructuring if necessary.
The milestone to be achieved through this PKPU process is a constructive follow-up action and a demonstrated reaction of good faith from the Debtor to settle its liabilities, securing a ratified composition plan so the Debtor does not face forced bankruptcy liquidation.
Legal consequences of PKPU on the Debtor's assets or estate: During the Debtor's PKPU, the Debtor retains the right to manage and administer their own corporate property or assets, provided they obtain the explicit authorization or joint approval from the appointed Administrator (Pengurus) or Receiver, pursuant to Article 240 of Law No. 37 of 2004.
However, upon the expiration of the temporary or permanent moratorium period—even after being extended up to the absolute statutory limit of 270 (two hundred and seventy) days—should the Debtor fail to fulfill its structured obligations to the Creditors, the Commercial Court will formally declare the Debtor "Bankrupt" (Pailit). Under Article 235 paragraph (1) of Law No. 37 of 2004, no legal remedies or appeals can be initiated against this declaration of bankruptcy.
What are the strategic legal benefits of PKPU for Creditors and Clients?
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Instigates an immediate legal reaction and compels accountability from an otherwise unresponsive Debtor to perform in good faith.
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Establishes clear legal distinction between a Debtor that is unwilling to pay and one that is genuinely unable to pay, which is systematically evaluated during the granted extension period.
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Provides rigid legal certainty and robust protection for Creditors looking to recover their commercial rights regarding existing accounts receivable from the Debtor.
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Prevents severe financial losses and premature non-performing loan write-offs (W.O.) that could otherwise degrade the company’s profit-and-loss sheet performance.
In addition to Creditor representation, our firm is highly experienced in acting as Retained Counsel for Debtors facing PKPU petitions from Creditors. We provide strategic defense, lead high-stakes settlement negotiations, conduct comprehensive reviews of commercial agreements within the PKPU process, offer peak legal opinions, and aggressively defend the Client’s interests across all Creditors' General Meetings.
Bankruptcy (Kepailitan)
Bankruptcy is a general attachment (sita umum) placed over all assets and wealth belonging to a bankrupt Debtor. The management, administration, and eventual liquidation of these assets are systematically carried out by a court-appointed Receiver (Kurator) under the direct oversight of a Supervisory Judge (Hakim Pengawas) as strictly regulated by statutory law.
Bankruptcy serves as a powerful legal avenue to safeguard Creditors by granting statutory certainty in resolving uncollectible debt transactions. It has rapidly evolved into a favored legal route for dispute resolution because its expedited proceedings ensure that the recovery and restoration of Creditors’ financial rights are far more guaranteed compared to standard civil court litigation.
Legal Consequences of a Bankruptcy Declaration Judgment:
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Against a formal judgment declaring bankruptcy, a petition for Cassation may be directly submitted to the Supreme Court of the Republic of Indonesia under Article 11 paragraph 1 of Law No. 37 of 2004.
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The Debtor immediately divests and loses their legal right to manage or administer their corporate assets, as the Commercial Court transfers full administration and settlement rights over the bankrupt estate to the Receiver.
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The Receiver is legally empowered by the Commercial Court to execute all necessary measures regarding the Debtor’s wealth and possesses sole authority to take steps aimed at increasing the overall effectiveness and value of the bankruptcy estate (budel pailit).
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Against a bankruptcy declaration judgment that has already acquired permanent legal force (inkracht), a final petition for Judicial Review (Peninjauan Kembali) may be advanced to the Supreme Court under Article 14 of Law No. 37 of 2004.