Our Managing Partner of Leks&Co wrote an article titled “Creditor and guarantor interplay in postponement of debt payment obligation” as published in Lexology.com
The article examines the complex interplay between creditors, debtors, and guarantors under Indonesia’s 2004 Bankruptcy Law and debt postponement (PKPU) provisions. It focuses on the relationships between a project owner, contractor, and bank in a construction scenario involving a bank guarantee. The key issue is whether the project owner can still liquidate the bank guarantee if the contractor enters PKPU status. The article concludes that PKPU status does not prevent liquidation of the bank guarantee, because the suspension on debt payment only applies to the contractor as debtor, not the bank as guarantor. However, once the bank pays out the guarantee and becomes creditor to the contractor, then the PKPU would apply. Understanding these nuanced debtor-creditor-guarantor dynamics is crucial in litigation.
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