(a) In relation to each type of insolvency procedure available in the legal system of this economy, what are the administrative organs/entities involved in the implementation and management of that procedure? (For example a trustee, liquidator, receiver, government official.)

The administrative organs involved in the implementation and management of Indonesia's bankruptcy procedure are as follows:

(i) the Commercial Courts;

(ii) the Supervisory Judge;

(iii) the Receiver; and

(iv) the Creditors Committee.

(b) What qualifications must each type of administrator of insolvency procedures possess? Is there a system of regulation of insolvency administrators in this economy?

(i) Commercial Court: The Bankruptcy Law does not specify what qualification judges must have to sit on this Court.

(ii) Supervisory Judges: The Bankruptcy Law is also silent on the qualifications of Supervisory Judges.

(iii) Receivers: The Bankruptcy Law gives two alternative methods for the appointment of receivers: First, there is the so-called Orphans Chamber (BHP), which is a special agency of the Department of Justice. Second, there are private receivers. Private receivers must be individuals or civil partnerships domiciled in Indonesia possessing specific expertise required in respect of the management and/or the settlement of bankrupt estates and must be registered with the Department of Justice. The receivers appointed must be independent and have no conflict of interest with either the debtor or the creditor.

(c) Are the creditors of a corporate debtor permitted to participate in the administration of the relevant insolvency procedure, and if so, how? (For example are the creditors permitted to assist the administrator, or supervise or dictate the conduct of the administration?)

Yes. As explained above, pursuant to the Bankruptcy Law, any creditor may request the Court to appoint a temporary receiver to supervise the management of the debtor's business and to supervise payments to creditors, transfers or encumbrances of the debtor's assets, for which the receiver's approval is required in respect of the bankruptcy.

The Court may, by the bankruptcy declaration or by a later decision if it is deemed necessary or if it is desirable for the interest of the bankrupt estate, establish a temporary committee consisting of one to three members appointed from the creditors to provide advice to the receiver.

(a) In relation to each type of insolvency procedure available in the legal system of this economy, what are the powers given to each type of administrator by statute, at general law or pursuant to the terms of the appointment? (for example power to carry on the business of the organization, to pay creditors, to compromise claims of or against the debtor, to issue or defend legal proceedings, to obtain credit, to sell property, to execute documents on behalf of the debtor.)

The following are the powers given to each type of administrator by the Bankruptcy Law:

1. Supervisory Judges:

(i) The Supervisory Judge controls the management and settlement of the bankrupt estate.

(ii) The Commercial Court is obligated to hear the advice of the Supervisory Judge before deciding any matters related to the management and settlement of the bankrupt estate.

(iii) The Supervisory Judge is authorized to hear witnesses or order an investigation by experts in order to obtain all information with regard to the bankruptcy proceedings.

2. Receivers:

(i) The receiver shall manage and/or settle the bankrupt estate.

(ii) The receiver may obtain a loan from a third party to increase the value of the bankrupt estate.

(iii) With the approval of the Creditors Committee, the receiver may continue the business of a bankrupt debtor, notwithstanding that an appeal to the Supreme Court has been made or a judicial review filed in respect of such bankruptcy declaration.

(iv) A receiver appointed for a specific task based on the decision of a bankruptcy declaration is authorized to act independently within the scope of its assignment.

(v) The receiver shall not be required to obtain the approval of or to give prior notice to the debtor concerned, notwithstanding that under other circumstances such approval or notice would be a requirement.

3. Creditors Committee:

(i) The Creditors Committee is entitled at any time to request the receiver for an inspection of books and documents relating to the bankruptcy.

(ii) The receiver must request the advice of the Creditors Committee before initiating a lawsuit or continuing a pending lawsuit, or defending itself against a lawsuit, unless the lawsuit deals with the verification of debts or claims. The receiver must also request the advice of the Creditors Committee whether or not to continue the management of the company, and all matters set forth in Articles 36, 38, 39, 57 (2), 97, 98, 170 (3) and 172 of the Bankruptcy Law and generally with regard to the settlement and sale of the assets of the bankrupt estate and the time and the amount of allocations of the assets of the bankrupt estate to be made to creditors.

(b) To what extent and in what circumstances may each type of insolvency administrator seek assistance, advice or direction in the conduct of the administration, and from what sources? (for example the Court, his appointor, the creditors of the debtor, a solicitor, accountant or other relevant person.)

a. Supervisory Judge: See Answer to J.2.a above.

b. Receiver: A receiver may obtain advice and assistance from private parties, such as an attorney, accountant or other relevant persons.

Specifically:

(i) if in obtaining a loan from a third party, the receiver needs to encumber the bankrupt estate with a security right, pledge or collateral right on other property, the prior approval of the Supervisory Judge must be obtained for such a loan.

(ii) to appear before the Court, the receiver must first obtain the approval of the Supervisory Judge, unless the matter is in respect of disputes concerning the verification of claims or matters set forth in Articles 36, 38, 39 and 57 (2) of the Bankruptcy Law. In general, these Articles provide for the following matters:

(a) Article 36: if at the time the bankruptcy is declared, a mutual agreement has not been fulfilled entirely or partially either by the bankrupt debtor or the opposing party;

(b) Article 38: if the bankrupt debtor is a lessee of goods;

(c) Article 39: the resignation and dismissal of employees of the bankrupt debtor;

(d) Article 57(2): the demand of the receiver for the transfer of goods serving as collateral to be sold.

(iii) The Commercial Court may establish a temporary committee of creditors to give advice to a receiver under Article 71(1) of the Bankruptcy Law. This temporary Creditors Committee must consist of one to three members appointed from the creditors known to the Commercial Court.

(iv) The receiver may at any time arrange a meeting with the Creditors Committee in order to obtain its advice, if necessary.

c. Creditors Committee: The Committee is entitled at any time to request an inspection of the books and documents relating to the bankruptcy. The receiver is obligated to provide all information requested by the Creditors Committee.

(a) In relation to each type of insolvency procedure available in the legal system of this economy, what are the duties imposed upon each type of administrator by statute and at general law? (for example a duty to take possession of assets of the debtor, to realise those assets, to discharge the debt owed to his appointor, to call for proofs of debts owed to creditors, to adjudicate upon claims of creditors, to apply available assets in discharge of those claims, to report on the conduct of the debtor by the proprietors.)

a. Supervisory Judge: Please see our discussion above in response to Question J.2.

b. Receiver: The receiver is required to perform the following duties:

(i) to manage and or settle the bankrupt estate;

(ii) to appear before the Court, the receiver must obtain approval from the Supervisory Judge, except in respect of disputes regarding the verification of claims or for the matters set out in Articles 36, 38, 39, and 57 (2) of the Bankruptcy Law.

(iii) to be responsible for any faults or negligence in performing its duties which cause loss to the bankrupt estate;

(iv) to submit quarterly reports to the Supervisory Judge concerning the condition of the bankrupt estate and the implementation of the receiver's duties; and

(v) to obtain the prior approval of the Supervisory Judge to encumber the bankrupt estate with a security right, pledge or collateral right on other property.

c. Creditors Committee: The Creditors Committee is required to perform the following duties:

(i) to advise the receiver; and

(ii) to meet with the receiver to give advice.

(a) What remedies and/or sanctions are available in the legal system of this economy in respect of breaches of duty or transgressions committed by each type of insolvency administrator?

The Bankruptcy Law only addresses the breach of duty of a receiver. Under the Bankruptcy Law, the receiver is responsible for any faults or negligence in performing its management and/or settlement tasks which cause loss to the bankrupt estate. It does not further stipulate the sanctions for such breach.

(b) Have there been actual instances of breach of duty or transgressions committed by insolvency administrators?

To the best of our knowledge, there has been no actual instance of breach of duty or transgression committed by an insolvency administrator. However, the Bankruptcy Law is too new for such instances to have occurred and to have been made public.

(c) If so, give the details of any major cases and a summary of the action taken and the results.

Not applicable.