ACKNOWLEDGMENT

It is by the grace and love of God whose everlasting grace and perfect glory allowed the Author to write and finish this Thesis as one of the prerequisites to obtain the Bachelor of Law Degree in Business Law Concentration at the Faculty of Law of

Universitas Pelita Harapan in 2020. This Thesis is titled “THE SIMPLE PROOF

STANDARD FOR DECLARATION UNDER ARTICLE 8(4) OF

BANKRUPTCY LAW TO DECLARE BANKRUPTCY BEFORE

COMMERCIAL COURTS AND ITS EFFECTIVENESS IN COMPARISON

TO THE UNITED STATES BANKRUPTCY CODE”.

The Author chose to analyze ’s simple proof test under Bankruptcy proceeding and provide a comparison with the proceedings brought in the United

States through her legal internship at Soewito, Suhardiman, Eddymurthy and

Kardono Partners (“SSEK”). The author became aware on the ineffectiveness and abstract concept of the simple test proof hinders the possibility of Commercial Courts from accurately declaring Bankruptcy, despite the severe legal consequences of confiscating all assets and properties of the Debtor.

The Author acknowledges that her pursuit of her legal career by finishing law school and finishing of this Thesis is a collective effort and support from many of those who have helped the Author throughout her years in law school. As such, the

Author would like to extend her utmost gratitude to those who have joined that effort, namely:

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1. Prof. Dr. Bintan R. Saragih, S.H., as the Dean of the Faculty of Law

Universitas Pelita Harapan and as the Lecturer of this course who has given

me this opportunity to practice in formulating this Thesis.

2. Dr. Vincensia Esti Purnama Sari, S.H., M.Hum., as the Head of Faculty of

Law Universitas Pelita Harapan.

3. Dr. Velliana Tanaya, S.H., M.H., as the Director of Faculty of Law

Universitas Pelita Harapan.

4. Dr. jur. Udin Silalahi, S.H., LL.M., as the Author’s Thesis advisor who have

patiently guided and advised me throughout the journey of writing this

Thesis.

5. Author’s coach during her Moot Court Competitions, Ms. Jessica Los Banõs,

LL.B., MTM., M.B.A., for pushing me to my limits and teaching me every

legal skill that I have now acquired.

6. Author’s family, Deborah Iskandar, Daniel Iskandar, Kekoa Iskandar and

Keola Iskandar who have supported me relentlessly to uphold the

determination I needed to go through law school.

7. To Timothy Daniel for always pushing me to do better and in finishing this

Thesis timely. Every day you motivate me to do and be better, both as a

person and future legal advocate. I cherish what we have and what lies

beyond.

8. The Author’s law-school survival guide: Tiffany Revilia Jonan, Manika

Jashan Sadarangani, Sharon Yang Cahyadi, Joy Budiana and Grace Walia,

for your constant support in helping me grow into the person I am today.

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Thank you for showing me what it means to be a good friend and always

telling me the truth especially when I am unable to face and handle it.

9. The legal advisors, namely, Dimas Indartono, Lukas Simanjuntal, and Ari

Bessendorf for helping develop the basis of this thesis. I would also like to

thank my advisors and peers from my previous internships at Mercedes-Benz

and SSEK. My time there were momentous. I am so blessed to be learning

from some of the greatest minds and for being reminded that you can always

have fun in continuing that process.

10. The International Law Moot Court Community, especially, Astrid

Desmonda, Sianti Chandra, Johan Kurniawan, Bernice K., Sabrina Tobing,

Felix Chandra, Rica Dharma, Indira Kantiana, Hanna Yovita, amongst others.

Thank you for taking a chance in me and welcoming me from the moment I

entered law school. The experiences I gained from joining this community is

none like any other to enjoy law school.

11. For my 2017 Foreign Direct Investment Moot Team: Michael Demetrius,

Grace Walia, Manika Jashan Sadarangani. You guys have taught me what it

means to be in a loving team and for that, you hold a special place in my

heart.

12. For my 2019 Phillip C. Jessup Moot Team: Manika Jashan Sadarangani,

Agnes Amelia Guntara, Olivia Karlina and Putri Miqaila Ameena. Thank you

for bearing with me and my sleepiness, thank you for the friendships I cherish

forever.

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13. My IES family and mentors, Joshua Kunze, Pastor Tirza, Christiana Louisa

Ticoalu, Geraldine T., Angelica Deralda, Ivan Narendra, Kristy Arysnia,

Reina Ang, William and Jevon S., amongst others. You guys have shown me

nothing but constant love and support in some of my most critical times and

have brought me closer to God than I ever was. Thank you for helping me

take the first steps of courage and self-worth.

14. To Ratu Sejagad, 2020 Finalists and Yayasan Puteri

Indonesia. Thank you for always believing in me and encouraging me to

speak for others. Thank you for reminding me to always put 110% in each

and every activity carried out.

15. Lastly, to everyone directly or indirectly contributing to the completion of

this Thesis, whom the Author cannot credit one-by-one. Sincerely, without

your significant impacts and for constantly staying in her life, she would not

be the woman she is today. While this Thesis is far from perfect, I apologize

for any mistakes or inaccuracies. I sincerely hope that this Thesis will bring

out the desired outcome of being a positive contribution and guidance for

Indonesia’s legal system and education.

Jakarta, 11 June 2020

The Author,

Louise Kalista Iskandar

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TABLE OF CONTENTS

THESIS …………………………………………………………………………… STATEMENT OF THESIS ORIGINALITY ………………………………… ii THESIS ADVISORY APPROVAL …………………………………………... iii EXAMINATION BOARD APPROVAL …………………………………...... iv ABSTRACT …………………………………………………………………..… v ACKNOWLEDGMENT ……………………………………………………..... vi TABLE OF CONTENTS ………………………………………………………. x LIST OF TABLES ……………………………………………………………. xii CHAPTER I. INTRODUCTION………………………………………………. 1 1.1 Background …………………..……………………….…………...... 1 1.2 Research Questions ...……………………….……………………..…...… 9 1.3 Purpose of Research ……...………………………………………….….... 9 1.4 Benefits of Research……………………………...... …………….. 10 1.4.1 Theoretical Benefits………………..……………………………. 10 1.4.2 Practical Benefits ………………..…………………………...... 10 1.5 Systematic Writing ……...……………..……………………………...... 11 CHAPTER II. LITERATURE REVIEW…………………………………..… 13 2.1 Theoretical Framework………………………………………….………. 13 2.1.1 Indonesian Bankruptcy Law ….……………………...... … 13 1. Understanding Bankruptcy .…………………………...… 13 2. Processing Bankruptcy Petitions ….…………………….. 20 a. Bankruptcy Petitioners …….…………………..... 21 b. Required Documents …………………………… 27 c. Bankruptcy Proceedings ..…………….……...… 30 d. Cancelling Bankruptcy Decisions …….………… 35 3. Consequences of Declaring Bankruptcy ……………...…. 38 2.1.2. United States Bankruptcy Law …………….………………..….. 40 1. Bankruptcy under Chapter 11 of the United States Code .. 40 2. Petition for Bankruptcy ……………………..…………... 45 a. Standard for Assessment .….…………………..... 48 b. Required Documents …………………………… 55 c. Bankruptcy Proceedings ….………….………… 61 d. Converting to Chapter 7 ………..…….………… 70 3. Consequences of Bankruptcy ………………………...…. 74 2.2 Conceptual Framework ………………….…………………….……...… 76 2.2.1 Simple Test Proof …….…………………………………...…..… 76 2.2.2 US Standard for Bankruptcy …………………………………..… 77 1. Financial Means Test …………………………………… 77 2. Reorganization Plan …………………………………….. 78 CHAPTER III. RESEARCH METHODOLOGY …………………….…..… 79 3.1. Type of Research ……………………………………………….…….… 79 3.1.1 Normative Legal Research Approach ………………………..…. 80 3.1.2 Empirical Legal Research Approach ……………………………. 81 3.2. Procedure Material Research ….…………………………………..……. 81

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3.3. Character Analysis ….…………………………………………………... 83 3.4. Obstacle in Research and its Overcoming ………………………………. 85 CHAPTER IV. DISCUSSION AND ANALYSIS ……………………………. 87 4.1 Satisfaction of the Elements of Bankruptcy under Bankruptcy Law in Indonesia ….……………………………………………………….……. 87 4.1.1 Existence Of Two Or More Creditors ………...………..……….. 88 4.1.2 The Debtor Fails to Pay the Debt that is Due and Mature ………. 89 1. Existence of a debt …………………………………...... 89 a. Drs. Husein Sani, Subekti v. PT Modern Land ……………………..…………………………...... 92 b. ILFC v. MB ……………………………………… 92 c. Telkomsel v. PT PJI …………………………...… 93 d. Shareholders to PT HI v. GPF ………….…...... … 98 2. The Debtor’s failure to pay the due and matured debt …. 101 4.2 Indonesia’s Bankruptcy declaration in comparison to the United States ..103 4.2.1 Accession to Bankruptcy ………………….…………………... 105 1. Use of Evidence ..…………………………………….... 105 2. Thorough v. Prima Face level of assessment ……….... 108 a. A time limit implies what Courts can assess in a petition …………………………………………. 108 b. Different forms of Bankruptcy ………………… 110 c. Conditions for Bankruptcy ……………….……. 111 4.2.2 Legal consequences …………………………….……………... 119 CHAPTER V. CONCLUSION AND RECOMMENDATIONS ………….. 122 5.1 Conclusion ……………….………………………………………….… 122 5.2 Recommendation …………………………………………………….... 123 BIBLIOGRAPHY …………………………………………...………………. 124

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LIST OF TABLES

Table 2.1 Required documents to submit when filing a petition ……..…... 30 Table 2.2 Time period for Indonesian Bankruptcy Proceedings …...…...… 34 Table 2.3 Time period for cassation and civil review …………………...... 39 Table 2.4 Median Household income ……..…………………………….... 55

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