Business Law

Andre Cahyono, Irwan Arfandi Bachtiar & Poppy Jesiska JappyMaster of Management – Gadjah Mada University

Bankruptcy Bankruptcy is a legally declared

inability or impairment of ability of an individual or organization to pay its creditors.

Creditors may file a bankruptcy petition against a debtor ("involuntary bankruptcy") in an effort to recoup a portion of what they are owed or initiate a restructuring.

In the majority of cases, however, bankruptcy is initiated by the debtor (a "voluntary bankruptcy" that is filed by the bankrupt individual or organization).

Related Article in Indonesia

UU No. 37 Tahun 2004 tentang Kepailitan dan

Penundaan Kewajiban Pembayaran UtangUUNo. 4 Tahun 1998 tentang Kepailitan

Objectives of Bankruptcy Article

Spread and separate debiture moneyAvoiding separated confiscated goodsConducting confiscated goods on times

Who Involved ?

DebtureStockholdersPublic ProsecutorBank of IndonesiaCompaniesControl Institution of

Capital Markets

Attend to be Bankrupt..

Have two or more credituresNot Paid debt in the end of time

Because of Bankruptcy Laws...Debitures lost control of their wealthCurator have responsibility to do organizational job

or finished bancruptcy problemsFor handling and holding jobs of the curator, court

indicate one supervisor judge.

Company Profiles Established as the Prudential Mutual Assurance and Loan Association in 1848,

today we are an international retail financial services company with significant operations in Asia, the US and the UK. Our purpose is to promote the financial well-being of our customers and their families, with a particular focus on saving for retirement and security in retirement.

The Group is structured around four main business units: Prudential Corporation Asia, Jackson National Life Insurance Company, Prudential UK & Europe and M&G. These are supported by central functions which are responsible for leading Group strategy, cash and capital management, leadership development and succession, reputation management and other core Group functions.

Our portfolio of well-known and respected brands has attracted more than 21 million customers (and policy holders and unit holders) worldwide. Across the Group we have £249 billion of funds under management (at 31 December 2008).

Chronology [7/4/04] Collides with their ex-agent, Prudential Assurance was bancrupted. [14/4/04] Involve with MLM, Prudential withdraw the contract with their agent. [26/4/04] Prudential curator claim his act is in accordance with Bancruptcy Articles [29/4/04] Judge and Human Rights Department : Articles Draft can becomes Rules of Articles [29/4/04] AKPI regrets appointing prudential curator by The Court [3/5/04] Waiting about appeal to the supreme court, Prudential are allow to operating again [8/5/04] Curator perceive Prudential as not being cooperative [11/5/04] Files about appeal to the supreme court has not been submitted to supreme court [12/5/04] Curator deny their acts to bring loss toward prudential [21/5/04] Prudential bankruptcy now has been taken care of by three curator [25/5/04] Bankruptcy articles revision : Not only about assurance bankruptcy [15/6/04] Prudential board of director take off company operations from hands of curator [7/7/04] Prudential against bankruptcy one more time

Problems Begin

Prudential has two creditor (Lee Boon Siong) and Hartono Hojaya

April 24, 2004 Business Court Central Jakarta claim Prudential is bankrupt (Curator Yuhelson)

Curator was liquidated PrudentialCurator require Prudential to stop their

operational to save their assets

• This case was handled by three curator : Business Court Council leads by Putu Supadmi, in the verdict they deny curator change petitioned PT Prudential Life Assurance (Prudential). Besides denying that changing, the council decide for adding two new curator (Andrey Sitanggang and Hendra Roza Putra) with Yuhelson to organize this bankruptcy.

• Yuhelson has been assumed have interest crash because he is one of lawyer in the law firm of Lucas SH & Partner, lawyer of Lee Boon Siong (bankruptcy demand). Yuhelson has been assumed not in the job to being curator because he is not a member of Indoneisan Curator Assosiation and Staff (AKPI).

Problem Statement

Why Prudential is petitioned for bankruptcy?

Why did the petition is granted?

Why did Prudential manage to avoid the second petition?

AnalysisPrudential was petitioned for bankruptcy because the condition stated in Art.1 Sec.3 is proven. It failed to perform its debt to Lee Boon Siong and Hartono Hojana. The verdict citation is as follows:

Dalam pertimbangan hukumnya, Prudential terbukti secara sederhana memiliki utang yang telah jatuh waktu dan dapat ditagih, serta dua kreditur. Menurut Majelis PN Niaga yang diketuai Putu Supadmi, bonus konsistensi sejumlah Rp1,4 miliar yang belum dibayar oleh Prudential kepada Lee Boon Siong, merupakan utang sebagaimana didefiniskan Pasal 1 ayat(1) Undang-undang Kepailitan (UUK). Lee Boon Siong adalah mantan agen Prudential dan seorang warga negara Malaysia.

Prudential juga terbukti memiliki utang kepada kreditur lain, yaitu Hartono Hojana. Berdasarkan kesaksian Hartono di persidangan, majelis beranggapan Prudential belum membayar sisa kewajibannya kepada Hartono. Bukti-bukti yang diajukan Prudential untuk membantah dalil Hartono, dinilai majelis tidak cukup sahih.

However, this verdict is annuled in the appeal to the supreme court, because of the misinterpretation of the cause. It is cited as follows: Mahkamah Agung mengabulkan

permohonan kasasi yang diajukan PT Prudential Life Assurance. Dengan ketetapan ini, otomatis putusan Pengadilan Niaga Jakarta pada 23 April lalu, yang mempailitkan perusahaan asuransi asal Inggris itu, batal.

Putusan MA ditetapkan dalam sidang majelis *kasasi* yang dipimpin Hakim Agung Marianna Sutadi dengan anggota Abdul Kadir Mappong dan Abdul Rahman Saleh. "(Sidang) menolak permohonan pailit dari pemohon (Lee Boon Siong)," kata Marianna dalam sidang itu kemarin.

Putusan diambil atas dasar pertimbangan Pengadilan Niaga telah salah menerapkan hukum. Sebab, dasar permohonan yang diajukan dalam kasus pemailitan itu adalah sengketa soal perjanjian antara Lee dan *Prudential* -- bukan soal utang yang tidak dibayar dan telah jatuh tempo.

The second petition is not granted because of the element of debt cannot be proven.

Conclusion

• The important element in bankruptcy is the unpaid debt. At leats, this is what can be concluded in prudential case. We provide two examples, the first is where Prudential is declared bankruptcy before the appeal, where the appeal later annulled the verdict, and the second where the bankruptcy is not imposed.

Case Closed