April 2023 Newsletter
Another month, another catching up with monthly closed funding and trending news. This month's special; we're taking you on a step-by-step breakdown in understanding bankruptcy.
Beyond Broke: Understanding Bankruptcy
Bankruptcy is a complex process that many companies may face at some point in their financial lives. While filing for bankruptcy can be seen as a last resort, it is important to understand that it does not always mean the complete discontinuation of business operations. In fact, bankruptcy can often provide a much-needed lifeline for those struggling with insurmountable debt, offering a way to restructure and repay creditors while also protecting assets. Head to the article and find out depth insights about bankruptcy.
Filing for a Bankruptcy in Indonesia
In Indonesia, the legal framework for bankruptcy is governed by the UU No.37/2004 on Bankruptcy and Suspension of Debt Payment Obligations is Indonesia's current bankruptcy statute (penundaan kewajiban pembayaran utang/ “PKPU”). In 2022, 520 petitions of PKPU cases were registered in the case monitoring system or Sistem Informasi Penelusuran Perkara (“SIPP”) of the commercial courts in Indonesia in 2022. Though its a omnipresence phenomenon, many of business owners lack the knowledge of bankruptcy flow in Indonesia.
Filing for a Bankruptcy in USA
In the US, the legal framework for bankruptcy is governed by the Bankruptcy Code, which was enacted in 1978. The Code provides guidelines for bankruptcy proceedings, including the filing of a petition, appointment of a trustee, and reorganization of debts. Modern bankruptcy courts use federal bankruptcy law, which provides different types of bankruptcy relief, including Chapter 7, Chapter 11, and Chapter 13 bankruptcy. These different types of bankruptcy have different purpose, requirements and procedures, and the appropriate type of bankruptcy depends on the specific circumstances of the case.
Omnipresence Reality: From Lehman Brothers to Sariwangi
On September 15, 2008, Lehman Brothers, one of the largest investment banks in the world, filed for Chapter 11 bankruptcy protection, marking the largest bankruptcy in US history at the time with Lehman holding over $600 billion in assets. Looking closer, Sariwangi, a well-known tea brand in Indonesia, has been in operation since 1979. However, in 2018, the company was declared bankrupt due to several factors including declining sales and profits, mismanagement, and increasing debt.
Bankruptcy in Startups
Startups are known for their agility, innovation, and potential for high growth, making them prone to failure which can lead to bankruptcy. There have been a number of cases of startups filing for bankruptcy. Some notable examples include Theranos and Better Place, as well as the more recent one TaniHub in Indonesia.
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April 2023 Newsletter