Bankruptcy Proceedings Research Articles

ANALISIS PERLINDUNGAN HUKUM TERHADAP KREDITUR SEPARATIS PEMEGANG HAK TANGGUNGAN YANG KEHILANGAN HAK EKSEKUSI DALAM PROSES KEPAILITAN

The Central Jakarta Commercial Court issued a decision Number 15/Pdt-Lawsuit Lain-Lain/2019/PN.Niaga.Jkt.Pst regarding bankruptcy asset disputes that have a negative impact on PT Maybank Indonesia Tbk., as a separatist creditor holding Dependent Rights (HT). The problems in this writing is in the form of, "how is the legal consequences for PT Maybank Indonesia Tbk. in the bankruptcy process and how is the legal protection for PT Maybank Indonesia Tbk. in the bankruptcy process". The research uses a juridical-normative type that is descriptive. The data used are secondary data which analyzed by qualitative analysis, and conclusions are drawn deductively. The result are PT Maybank Indonesia Tbk. suffered losses due to the decision given. The loss obtained was in the form of the loss of authority of PT Maybank Indonesia Tbk. in the control and management of assets owned. This is consequence to the lack of consistency in the provisions of the Bankruptcy Law (UUK). In addition, this can happen because there is a norm conflict between the Law on Dependent Rights (UUHT) and UUK. PT Maybank Indonesia Tbk. also did not get proper legal protection due to differences in views with those of UUK regarding deadlines in the asset execution process.

JURIDICAL REVIEW OF BANKRUPTCY CONDITIONS AND DELAY OF DEBT REPAYMENT OBLIGATIONS

Bankruptcy results in a general confiscation of all assets of the bankrupt debtor (budel bankrulit). An important phase in the bankruptcy process is the insolvency stage. Based on the explanation of Article 57 paragraph 1 of the Bankruptcy Law and PKPU, what is meant by insolvency is the state of inability to pay, this is in line with the Central Jakarta Commercial Court Decision Number: 44 / PDT. SUS. PAILIT/20 20/PN. TRADE. JKT. PST. That PT. Pazia Retailindo was declared bankrupt. Application for bankruptcy filed by PT. Dana Kaya through its Directors, namely Sri Dewi Endang Mumpuni and Ambar Bawono on October 20, 2020, was represented by the appointed legal representative, namely PARLIN SIHOMBING, S.E., S.IP., S.H. Advocate at the Law Firm BELASSANDRO TORUAN &; PARTNERS. The problem raised in this study is the condition of Insolvency of PT. Pazia Retailindo before the bankruptcy decision , and what underlies the judge's consideration in the bankruptcy decision Number: 44 / Pdt.Sus.Pailit / 20 20 / Pn.Niaga.Jkt.Pst which refers to Law Number 37 of 2004. This research uses a Normative Juridical approach. The result of this study is that the legal considerations used by the panel of judges in deciding the bankruptcy case of PT. Pazia Retailindo complies with Law Number 37 of 2004 concerning Bankruptcy and PKPU, namely the fulfillment of all elements contained in Article 2 Paragraph 1 and Article 8 Paragraph 4 of the Bankruptcy Law and PKPU.

The efficiency of preventive restructuring procedures: Evidence from France

AbstractThis article critically evaluates the effectiveness of the European Union's recent Directive on restructuring and insolvency law, specifically within the context of France, aimed at facilitating the restructuring of financially distressed firms within the Eurozone. Specifically, through the Kaplan–Meyer estimator and the log‐rank test, this research rigorously examines whether preventive restructurings surpass standard bankruptcy procedures in efficiency. The dataset under analysis is distinctly tailored, focusing on companies undergoing both types of restructuring procedures within the French jurisdiction. The study reveals that companies successfully undergoing a preventive restructuring procedure showcase higher survival rates, albeit coupled with weaker financial performances when compared to their counterparts undergoing the traditional bankruptcy process. This outcome challenges the prevalent assumption linking early‐stage restructuring with uniformly elevated survival rates and improved financial performance. A noteworthy concern stems from this observed trend, suggesting that the existence of discrete preventive restructuring procedures might inadvertently prolong the operational lifespan of financially inviable firms. This underscores the necessity for policymakers to meticulously craft preventive restructuring procedures, prioritizing debtor protection while proactively addressing the moral hazard predicament.

A Shift in the Duties of Directors when the Company is on the Verge of Bankruptcy

The topic of this study is the change of directors' duties with the change of corporate operation status. The main research jurisdiction is the UK, and the main research node is after the company is on the verge of bankruptcy and enters bankruptcy proceedings. The UK law stipulates the general duties of directors in the Companies Act 2006. In the normal operation of the company, promoting the success of the company and protecting the interests of shareholders is almost an accepted fact in corporate law circles. But when a company faces bankruptcy, the duties of directors often change. The UK bankruptcy law stipulates Wrongful trading and fraudulent trading liability to urge directors to consider protecting the interests of creditors when the company is on the verge of bankruptcy. Directors may be legally liable for damage to the interests of creditors due to some improper behaviours. Therefore, in order to avoid being charged, directors will increase the priority of protecting the interests of creditors when the company is near bankruptcy. This study will rely on the relevant provisions of the Company Law 2006 and the enterprise bankruptcy law to analyse the change of directors' duties.

"INSOLVENCY LAW IN THE REPUBLIC OF UZBEKISTAN: HISTORICAL AND COMPARATIVE ANALYSIS"

"This article studied and analyzed the history of insolvency law of Uzbekistan, issues of protection of the entrepreneurs’ rights, restoring solvency of the debtor, and satisfaction of creditors’ claims with the use of insolvency procedures in accordance with the bankruptcy law of the Republic of Uzbekistan. In addition, when determining the signs of insolvency, it was analyzed that monetary obligations and debts on mandatory payments should be taken into account, and claims arising from labor relations should not be grounds for initiating bankruptcy proceedings. Particular attention was paid to the objectives of the credit policy when establishing insolvency regimes, based on two goals - fair distribution of risks and maximizing the value of the debtor’s assets. The models of insolvency regulation are analyzed using the example of the countries of Europe and the USA; their experience is compared with the practice of Uzbekistan. In particular, it has been established that rehabilitation norms appeared in US legislation and were subsequently used as a model in European countries, and the legislation of many countries is currently improving its legislation on the rehabilitation of the debtor. Analytical conclusions, ideas, and recommendations were also developed on the need to develop the concept of insolvency in Uzbekistan and the priorities that should be reflected in it."

The Dairy Meltdown

The case highlights the bankruptcy case of Kwality Limited, a significant Indian dairy company. Haldiram Snacks submitted a final bid of ₹1.45 billion to the Committee of Creditors for Kwality Limited, which is currently undergoing bankruptcy proceedings LiveMint (2019). This bid, a slight increase from their earlier rejected bid of ₹1.42 billion, has raised concerns due to its inadequate coverage of the company’s substantial outstanding debt of ₹19 billion Despite extensions, Haldiram Snacks remains the sole bidder, presenting a resolution plan under the Indian Insolvency and Bankruptcy Code (2016). The bankruptcy process was initiated in 2018 by financial creditors KKR India Financial and Punjab National Bank. The bid’s insufficiency, covering less than 10% of the debt, prompts reflections on overlooked warning signs and preventive strategies for the future. The larger context of the Indian dairy industry is provided, highlighting significant production and consumption figures, the growing organized dairy sector and the demand for value-added products. Kwality’s growth and expanding farmer network are briefly touched upon. The case overviews Kwality Limited’s bankruptcy, Haldiram Snacks’ bid, the company’s history and performance, and the broader Indian dairy industry landscape. It underlines the bid’s shortfall in comparison to the outstanding debt and raises pertinent questions about the company’s downfall and preventive measures moving forward.

Secured credit and bankruptcy resolution

AbstractAccepted wisdom holds that secured creditors favor liquidation of a debtor in bankruptcy even where the debtor may be more valuable as a going concern. This is false wisdom, however. Holders of senior claims can be expected to favor liquidation prior to a debtor's bankruptcy because the return on such claims are capped by the amount owed while debtor asset values fluctuate. But bankruptcy is a day of reckoning that can eliminate a creditor's exposure to value fluctuation. For this reason, we expect that modern bankruptcy practice, with the secured creditor often firmly in control, does not unduly encourage liquidation. In fact, we expect any bias to favor reorganization, which can be manipulated for the benefit of any party in control of the bankruptcy process. Our results are consistent with this hypothesis. In a broad study of US corporate bankruptcy cases, we find that secured credit is positively and significantly correlated with the reorganization of insolvent debtors.

Implementasi UU Perlindungan Konsumen dan UU Kepailitan terhadap Konsumen Properti Pemegang PPJB

The growth of the property business in Indonesia is increasing from year to year. This is evident from people's interest in investing their income in the property sector, whether in the form of housing, shophouses, apartments or other types. Unfortunately, the desire for profit is not always as expected. This happens to some consumers where the hope of making a profit through purchasing a property ends up making a loss when the developer is declared bankrupt. How is the implementation of Law Number 8 of 1999 concerning Consumer Protection (UUPK) linked to Law Number 37 of 2004 concerning Bankruptcy and Suspension of Debt Payment Obligations (UUK) in protecting consumer rights? This writing uses normative research methods with prescriptive - evaluative specifications, with the aim of obtaining advice and evaluating how the law is applied to cases that occur. The conclusion shows that the implementation of the UUPK in protecting property consumers holding PPJB is still weak and unclear because it does not explicitly explain protection in terms of compensation for losses for property consumers. The implementation of UUK is in accordance with statutory regulations, although it cannot be avoided that the developer's bankruptcy process will result in losses for consumers holding PPJB, where consumers holding PPJB are included in the status of concurrent creditors.

Specific features of challenging the debtor’s transactions in bankruptcy proceedings

The article characterizes the peculiarities of contesting debtor’s transactions in bankruptcy proceedings in comparison with the general procedure of contesting transactions. The author considers the peculiarities of separate elements of the legal mechanism of challenging transactions, highlights the discussion issues. The conclusion is made that the differences of contestation of transactions of the debtor in bankruptcy from contestation of transactions within the framework of the general order are conditioned by the specificity of public relations, formed in the sphere of application of norms of the Federal Law of 26 October 2002 № 127-FZ “On insolvency (bankruptcy)”, and the necessity of solving the task of satisfying the interests of creditors.

Проблемы оспаривания соглашений с адвокатом в процедуре несостоятельности (банкротства) доверителей

In the article the author analyzes the existing judicial practice in cases of contesting legal assistance agreements in insolvency (bankruptcy) proceedings of the client and identifies the most vulnerable terms of such agreements from the point of view of protection of the attorney’s rights to remuneration. Special attention is paid to the position of the courts in assessing the attorney’s knowledge of the client’s financial insolvency and the expected future initiation of bankruptcy proceedings, as a result of which the attorney may be deprived of the remuneration received and, in some cases, may even be held criminally liable. The author sums up that this situation causes irreparable damage to the human rights mechanism in Russia, of which the Bar is an integral part, undermining its reputation and reducing the motivation to ensure the exercise by subjects of their constitutional right to legal assistance. In the author’s opinion, the means of changing the current malicious practice of depriving attorneys of their just remuneration can be the introduction of an additional stage prior to the conclusion of the agreement, i.e. the analysis of the risks of entering into a potentially void transaction, which would allow to protect the attorney, at best, from financial losses and, at worst, from accusations of his complicity in the unlawful reduction of the bankrupt’s assets.

Efficiency of Working Capital & Assets Management in the Function of SMEs Bankruptcy Prediction

Research Question: This research has been conducted with the aim of determining whether it is possible to generate a model that can reliably predict bankruptcy of Serbian small and medium-sized enterprises (SMEs) using Working Capital Management (WCM) and Asset Management (AM) efficiency ratios. Motivation: Motive for this research is the fact there are not many business failure prediction models related to SMEs. In addition, existing models are not focused on efficiency of the two above mentioned categories. Also, previously developed models, especially traditional and ground-breaking ones, are not necessarily aligned with accounting procedures and economic environment of all countries, which indicates the need to develop a model that is adapted for Serbian territory. Idea: The idea is to develop a model that has the ability to predict whether an entity has a tendency to initiate bankruptcy proceedings in the next year. This is useful both for external stakeholders and for SMEs’ owners themselves, as it allows them to better manage resources. Data: The research was conducted on a sample of 100 Serbian SMEs. Data for the calculation of ratio indicators is available on the Business Registers Agency webpage. Tools: The research was conducted as a combination of financial and statistical analysis instruments. Ratio indicators were used for financial analysis part, while statistical analysis was conducted in SPSS program v.26 and includes logistic (binary) regression. Findings: Results of the research indicate that AM efficiency indicators are suitable for SMEs bankruptcy prediction modelling, but also indicate that WCM ratios don’t have great contribution in bankruptcy prediction for Serbian SMEs. A model that has a classification accuracy of 79% has been developed. Contribution: This research empirically tests how selected ratio indicators support SMEs bankruptcy prediction, and therefore can be beneficial for all SMEs stakeholders, but also other researches since the research methodology is explained in details.

Impact of the Amendment of 14 April 2023 in the Field of Bankruptcy Law on the Debt Collection Function of Bankruptcy Proceedings

The publication analyses the impact of the amendment to the bankruptcy law on the basis of the Act of 14 April 2023 on Amending the Act on Investment Funds and Management of Alternative Investment Funds, the Act on Bonds, the Act on the Bank Guarantee Fund, the Deposit Guarantee Scheme and Compulsory Restructuring, and some other acts, on the debt collection function of the bankruptcy law. Article 8 of the Act of 14 April 2013 modifies institutions of the bankruptcy law, insolvency and the order of satisfying creditors. The correct formation of these institutions is vital for the implementation of the debt collection function of the bankruptcy law. Therefore, the debt collection function was first characterized. Then, the institution of insolvency, the order of satisfying creditors and the normative modifications of these institutions introduced by the amendment in question and their impact on the debt collection function of the bankruptcy law have been analysed. The publication also discusses changes to the scope bankruptcy proceedings in respect of banks and cooperative savings and credit funds.

The problem of bankruptcy in EU countries in modern conditions

The relevance of the study is due to the consequences of the COVID-19 pandemic, which fundamentally changed the global economy, provoking a global recession. Legal entities suffered significant losses, being the main subjects of economic activity and, as a result, individuals became insolvent. This was followed by the energy crisis, which caused a second recession and massive bankruptcy of businesses and individuals - consumers. In the conditions of a difficult epidemiological, economic and geopolitical situation, the EU countries were forced to create additional legal mechanisms in order to more effectively regulate the institution of bankruptcy. The purpose of the study is to analyze the consequences of the COVID-19 pandemic and the energy crisis, their impact on the growth of bankruptcies in the EU countries and measures taken to improve the economy and protect the fundamental rights of individuals to return them to economic circulation. The trends and conclusions formulated by the author made it possible to emphasize the importance of applying bankruptcy proceedings. The article uses theoretical and empirical research methods.

Mandatory Audit of Business Entities in Bankruptcy Proceedings: Law Enforcement Aspects

The article presents the results of the analysis of the decisions of arbitration courts on disputes arising in connection with the application of Article 70 of the Federal Law “On Insolvency (Bankruptcy)” on the involvement of an auditor to conduct a mandatory audit of the debtor. As circumstances identified by the courts for the correct resolution of these disputes, the mandatory nature of the audit, as well as the content of the auditor’s activities and the documentation prepared by him, are considered. The approaches that have been formed in judicial practice regarding the ratio of the obligation to conduct financial analysis in bankruptcy proceedings and the obligation to engage an auditor are identified and disclosed. It is proposed to clarify paragraph 2 of Article 70 of the Federal Law “On Insolvency (Bankruptcy)” in terms of specifying the content of the duties of an interim manager and the auditor involved by him. It is concluded that it is necessary to supplement part 1 “Legal support of bankruptcy procedures” of the Unified training program for arbitration managers with a topic devoted to the legal regulation of audit activities.

The Death of an Insolvent Entrepreneur in the Light of Bankruptcy Law Regulations

Abstract This study aims to identify and analyse the specific regulations of the Bankruptcy Law to the extent that they relate to the death of an insolvent debtor. The authors attempt to determine the correct interpretation de lege lata, and where it is justified, draw conclusions de lege ferenda. Due to the fact that regulations must be interpreted together with the provisions of inheritance law and other regulations, their correct interpretation may be difficult. This study contains an analysis of three possible cases: when death occurred after the filing of a bankruptcy petition, during the course of bankruptcy proceedings, but also on the brink of bankruptcy before the petition was filed by an authorized person. In the event of death after filing for bankruptcy or after its declaration, the problem is essentially of a procedural nature and is generally resolved by identifying the persons participating in the proceedings (usually a trustee). On the other hand, in the event of the death of an insolvent entrepreneur before they file for bankruptcy, the Bankruptcy Law provides for a separate procedure. At the same time, it seems that due to the distinctness of this situation, the introduction of a different, specific definition of insolvency is justified, which the authors present in this study.

Challenging Transactions in Bankruptcy Proceedings

Challenging Transactions in Bankruptcy Proceedings

Juridical Analysis Of Creditor Protection Related To The Transfer Of Property In Bankruptcy Proceedings By Debtors

This study examines problems related to legal protection of creditors caused by debtors transferring their assets when applying for bankruptcy and regulations in the Bankruptcy Law so that they can become a legal umbrella for creditors to obtain their receivables. The research approach used in this study is a statutory approach (statue approach) with a type of normative juridical research. The sources of legal materials used are primary and secondary sources of legal materials. The technique of collecting legal materials used is library research. Validity uses theory triangulation and concept triangulation. The Bankruptcy Law essentially regulates in the event that debtors transfer their assets when they are filed for bankruptcy through a mechanism called Actio Pauliana. However, the Actio Pauliana mechanism contained in Article 41 of the Bankruptcy Law still has several shortcomings, including: First, Refusal due to differences in perception between judges to identify debtors' actions as fraud; Second, the judicial jurisdiction authorized to adjudicate Actio Pauliana's suit; Third, the lack of participation from parties, such as: customers, police, prosecutors, or banks due to incomprehension of the Bankruptcy Law.

PERLINDUNGAN HUKUM TERHADAP PIHAK KETIGA DALAM ACTIO PAULIANA

Actio Pauliana is a term for the cancellation of a legal action carried out by the debtor because the legal action can harm the creditor and is not required to be carried out. Actio Pauliana is closely related to bankruptcy law because it can have implications for the process of settling bankrupt assets of debtors who are undergoing the bankruptcy process. In the settlement of bankruptcy assets, the curator will conduct an examination of the ownership of the debtor's bankrupt property which will be used to resolve the bankruptcy process to its creditors. If Actio Pauliana's lawsuit is granted, as a result, the legal action of the debtor being sued by Actio Pauliana will be canceled. The canceled legal action involves a third party in transactions in general and creates an obligation for the third party to return the debtor's bankrupt property. The formulation of the problem in this research is what is the legal protection for third parties in Actio Pauliana's lawsuit. The purpose of writing this thesis is to fulfill one of the requirements to obtain a Bachelor of Law degree at the Faculty of Law, University of Surabaya. The writing of this study uses a normative juridical legal research type, from legal research carried out with this method, the results obtained that legal protection for third parties in the Actio Pauliana lawsuit gives a third party the right to get back the object that has been received by the debtor or its replacement value or the price of the goods. which has been paid to the debtor. Meanwhile, for the lack of the replacement value of the object or the price of the goods that have been paid by a third party to the Debtor, the third party in the Actio Pauliana lawsuit may appear as a Concurrent Creditor.

Research on the Implementation Dilemma and Solution Path of Personal bankruptcy Exemption System from the Perspective of Interest Balance *

Under modern bankruptcy law, individual debtors enter bankruptcy proceedings mainly to obtain debt relief. Therefore, the exemption system is not only a part of the Personal bankruptcy system but also plays a core role in the Personal bankruptcy system. However, the debtor's debt relief is based on the consideration of harming part of the creditors' interests in repayment, which poses an ethical challenge to the Personal bankruptcy relief system. Therefore, how to balance the interest relationship between creditors and debtors in the personal bankruptcy exemption system and promote the orderly development of the social market economy, this paper will discuss the model selection, scope of application, inspection period and other aspects.

Consumer bankruptcy: Decision, choice and access to credit afterwards

AbstractWe examine the effects of the bankruptcy benefit and adverse events on the consumer bankruptcy decision. Employing zero‐inflated ordered probit models and a unique longitudinal survey of approximately 66,000 individuals in Great Britain, we find that consumers are more likely to enter into bankruptcy proceedings when the bankruptcy benefit increases and when they become unemployed. We find that the effects of adverse events differ across bankruptcy types. Individuals who experience the onset of health problems are more likely to choose reorganization of debts (i.e., income gleaning), whereas individuals who get divorced or separated are more likely to prefer the discharge of debts (i.e., fresh start). We also examine access to credit after bankruptcy. We find that individuals are excluded from the credit markets post‐bankruptcy and the impact differs across bankruptcy types. Credit exclusion for fresh starters is dramatic, swift but short‐lived, while for income gleaners, it is gradual, slow but lasts longer.