Debt Restructuring for Company
As we know that there are many cases of companies that went bankrupt because they failed to pay their debts, thus in the end the company was declared bankrupt. A bankrupt company can have a significant negative impact on many parties. For example, a bankrupt company will make its workers threatened with termination of employment and the state will also not receive income tax from the bankrupt company, thereby reducing state revenue. To overcome these problems, companies can choose to restructure debt.
Debt restructuring is one way for a company to improve its financial condition through restructuring its debts/ composition/ debt rescheduling by proposing new terms and conditions that have been agreed upon by both parties. The rescheduling of this debt was re-agreed in an agreement in accordance with the legal terms of the agreement as stipulated in Article 1320 of the Indonesian Civil Code:
- there must be a consent of the individuals who are bound thereby;
- there must be a capacity to conclude an agreement;
- there must be a specific subject;
- there must be an admissible cause.
It should be noted that debt restructuring is important for companies that cannot pay their debts. Why is that? Because this debt restructuring provides an opportunity for the debtor to reschedule the debt by providing new terms and conditions (according to the agreement) so that the debtor can pay off his debt to the creditor.
Thus, the explanation above is a brief description of the company’s debt restructuring. If you are interested in knowing more about this, you can contact our law office, Suria Nataadmadja & Associates Law Firm.
Suria Nataadmadja & Associates Law Firm
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