“PKPU applies for all creditors, both unsecured and preferred creditor.”
Secured creditors are basically have more secured position compared to the others. Thus, if the debtor performs a default, the secured creditors can immediately execute the collateral.
Nevertheless, there are times then secured creditors suspend their right to execute collateral.
Suspension may be made by submitting Application for Suspension of Obligations for Debts Payment (PKPU) against the debtor. This is done to give “pressure” to negotiate more seriously in completing his obligation.
There are some people who think PKPU only applies to the group of creditors that are unsecured creditors who do not have material rights and excludes preferred creditors.
This is based on idea of without applying for PKPU or engaging in the PKPU process, the secured creditor can immediately execute his or her order to obtain the settlement of the receivable.
However, Law No. 37 of 2004 on Bankruptcy and Suspension of Obligations for Debts Payment (“Bankruptcy Law”) does not stipulate so. Bankruptcy Law gives equal chances to all creditors to apply for PKPU against the debtor. This is in line with Article 222 paragraph (3) of Bankruptcy Law:
“Creditors estimating that the Debtors are unable to continue paying those debts which have been due and payable, may request that they can suspend paying their debts, in order to enable them to present a composition plan that includes an offer to pay all or part of their debts to unsecured Creditors.”
In the explanation of Article 222 paragraph (3) of Bankruptcy Law, it is mentioned that creditor refers to any creditor, both unsecured and preferred creditor.
While preferred creditors refer to secured and preferred creditor.
In the voting process to decide whether the debtor will be given Permanent PKPU or not, the vote of secured creditors is also taken into account. As long as the secured creditors have been recognized as one of the creditors whose receivables are recognized. This is as regulated in Article 229 paragraph (1) of Bankruptcy Law:
“The granting of a permanent suspension of obligation for payment of debt and the extension thereof shall be stipulated by the Court based on:
- the approval of more than 1/2 (a half) of the unsecured Creditors whose rights are admitted or temporarily admitted who are present and represent at least 2/3 (two-thirds) of all claims admitted or temporarily admitted of unsecured Creditors or their Attorney-in-fact who present in the session; and
- the approval or more than 1/2 (a half) of unsecured Creditors whose accounts receivables are guaranteed by lien, fiduciary security, security right, mortgage, or other collateral rights on property, which are present and represent at least 2/3 (two-thirds) of all claims of the unsecured Creditors or their Attorney-in-fact who present in the session.”
Often at the voting stage there is a riot caused by unsecured creditors disagree if secured creditor is included in the voting.
The voting is cumulative, so the percentage of votes from both secured and unsecured creditor must be met. If the percentage of votes does not meet, then Temporary PKPU cannot be given and the debtor declared bankrupt.
However, considering that PKPU is fully applicable to all creditors, it is considered appropriate that secured creditors should have the same position and rights as other creditors.
We are experienced in assisting our Clients in resolving Bankruptcy and Suspension of Obligations for Debts Payment in Commercial Court. You can contact us via e-mail firstname.lastname@example.org or +62821-1234-1235
Fairus Harris, S.H., M.Kn.