Bali Developer or Villa Company in PKPU or Bankruptcy: What Buyers and Creditors Can Do

By Jeremy Jordan, S.H. — licensed Indonesian advocate (advokat), DPN Indonesia, NIA 25.25.32730 · Reviewed 25 October 2026

The situation

You paid for a villa or unit, lent money to a Bali company or supplied it — and you hear that it is in PKPU or in bankruptcy (kepailitan). PKPU stands for Penundaan Kewajiban Pembayaran Utang, a court-supervised suspension of debt payments during which the debtor can offer its creditors a composition plan to pay part or all of its debts (Law 37/2004 on Bankruptcy and PKPU, Article 222(3)).

Both procedures run on short, fixed deadlines, and a creditor who misses a step can lose its place on the list of claims or its say in the vote. This guide explains the general rules; your documents and the court file decide what applies to you.

Which court: check the deed, not the letterhead

• The debtor’s registered seat decides. A bankruptcy petition, and the other matters governed by the law, is decided by the court whose area covers the debtor’s legal seat; for a company, that is the seat stated in its articles of association (Article 3(1) and 3(5)). A PKPU petition goes to the same court (Article 224(1)), and “Court” in this law means the Commercial Court (Article 1 point 7).
• For Bali, that is Surabaya. The area of the Commercial Court at the Surabaya District Court covers East Java, South, Central and East Kalimantan, Bali, West Nusa Tenggara and East Nusa Tenggara (Presidential Decree 97/1999, Article 2(3)).
• A wrong forum is not a technicality. In 2017 the Supreme Court upheld a ruling that the Commercial Court in Central Jakarta had no jurisdiction over a bankruptcy petition against a company seated in Badung, Bali (MA 900 K/Pdt.Sus-Pailit/2017). Check the company’s deed and its record in the Ministry of Law’s company register (AHU) — not the letterhead or the sales office.
• Bali companies in that court are not rare. From the Surabaya court’s public case-tracking system (SIPP), read on 25 October 2026, we count at least 52 PKPU or bankruptcy cases registered since 2016 whose debtor is in Bali, Lombok/West Nusa Tenggara or East Nusa Tenggara; 21 of them concern hotels, resorts or property companies, and in at least 11 the petitioner was a foreign creditor. This is a lower bound from our own reading of public records, not an official statistic.

Who can file, and who must sign

• Who may ask. A debtor that has two or more creditors and has not paid in full at least one debt that is due and payable is declared bankrupt by the court, on its own petition or on the petition of one or more of its creditors (Article 2(1)). PKPU may be requested by a debtor that has more than one creditor, or by a creditor (Article 222(1)) — including a creditor who expects that the debtor cannot continue paying its debts that are due and payable (Article 222(3)).
• The proof standard. A bankruptcy petition must be granted where it is proven “simply” that these requirements are met (Article 8(4)). The Elucidation explains this as the fact of two or more creditors and of a debt that is due and unpaid; a dispute about the amount does not prevent a declaration.
• An advocate must file. Bankruptcy petitions must be filed by an advocate (Article 7(1)). A PKPU petition must be signed by the petitioner and by its advocate (Article 224(1)) — so a creditor abroad should plan its own signature early. The law itself states no further licence requirement for the advocate who files.

The PKPU timetable

• Temporary PKPU. On a creditor’s petition, the court must grant temporary PKPU within 20 days of registration; on the debtor’s own petition, within 3 days. The court must also appoint a supervisory judge and one or more administrators (pengurus), who manage the debtor’s assets together with the debtor (Article 225(2)–(3)).
• Day 45. The debtor and known creditors are summoned to a hearing held no later than the 45th day after temporary PKPU is pronounced (Article 225(4)).
• Day 270. If a permanent PKPU is approved, it may not, with its extensions, exceed 270 days after temporary PKPU was pronounced (Article 228(6)).
• No plan by then means bankruptcy. If that time runs out without an approved composition plan, the administrator must report it to the court through the supervisory judge on that day, and the court must declare the debtor bankrupt at the latest on the following day (Article 230(1)).

These are legal maximums, not forecasts. Disputes over claims and appeals can add months.

Lodging your claim — and keeping the receipt

• In PKPU. Once a composition plan is filed, the supervisory judge sets the last day for lodging claims with the administrator and the date of the creditors’ meeting that will discuss and decide the plan, at least 14 days apart (Article 268). A claim is lodged by a claim letter or other written statement setting out the nature and amount of the claim, with supporting evidence or copies of it, and you may ask the administrator for a receipt (Article 270).
• Late claims. A claim lodged after the deadline is put on the list only if it was lodged no later than two days before the meeting, it is requested at the meeting, and neither the administrator nor a creditor present objects; a claim lodged later than that is not included (Article 278(3)–(4)).
• In bankruptcy. Claims go to the curator, with a calculation or written statement showing their nature and amount, the evidence or copies, and a statement of whether you claim any preference or security right, and you may ask for a receipt (Article 115). The same two-day rule applies to late claims before the claims-verification meeting (Article 133(1)–(2)).

In practice: lodge early, attach the paper trail, and keep the receipt.

How the vote on a composition plan works

• Two classes, two tests each. In PKPU a composition plan is accepted only with the approval of more than half of the unsecured creditors present whose claims are admitted or provisionally admitted, together representing at least two-thirds of the admitted unsecured claims present, and more than half of the secured creditors present, representing at least two-thirds of the secured claims present (Article 281(1)).
• Who is bound. A composition that the court has approved binds all creditors (Article 286), except a secured creditor that voted against the plan; that creditor is instead given compensation equal to the lower of the value of its security or the actual amount of the loan directly secured (Articles 281(2) and 286).
• Attendance counts. Both tests are counted among those present. Creditors who stay away are not counted, yet an approved composition still binds them. Because the first test counts heads, a group of smaller creditors who attend can carry weight even when their claims are small.

If the plan is rejected — and the narrow appeal

• Rejection means bankruptcy. If the composition plan is rejected, the supervisory judge must notify the court, and the court must declare the debtor bankrupt (Article 289).
• Appeals are tightly limited. The law says no legal remedy is available against a PKPU decision (Article 235(1)). In 2021 the Constitutional Court ruled that provision unconstitutional unless it is read as permitting a cassation appeal against a PKPU decision on a petition filed by a creditor, where the debtor’s composition offer was rejected (MK 23/PUU-XIX/2021, operative part, point 2). The Court chose a single level of review — cassation, without a right to a case review (peninjauan kembali). If that route may concern you, take advice immediately.

Paid-up buyers: can you keep the unit?

The Supreme Court’s civil chamber has agreed that a transfer of land rights under a preliminary sale-and-purchase agreement (PPJB) legally occurs where the buyer has paid the price in full, has taken possession of the property, and acted in good faith (chamber ruling of 2016, SEMA 4/2016, point 7, as published in the Supreme Court’s compilation of chamber rulings).

• A housing example. In 2024 the Supreme Court held that buyers of landed houses outside Bali who had paid in full, received the houses under a handover report and lived in them were good-faith buyers whose houses were not part of the bankruptcy estate (MA 395 K/Pdt.Sus-Pailit/2024).
• A Bali example — and the rental-pool risk. In a case from the Surabaya Commercial Court about a unit in a Kuta project, the Supreme Court on case review held that a buyer who had paid in full and was in possession, long before the developer’s bankruptcy, was a good-faith buyer, and ordered the unit removed from the list of estate assets (MA 12 PK/Pdt.Sus-Pailit/2021). That reversed its own earlier cassation ruling against the same buyer, which had reasoned that the deal was still only at the preliminary-agreement stage and that the bankrupt developer had managed the unit and benefited from it (MA 437 K/Pdt.Sus-Pailit/2019). If your unit sits in a rental pool run by the developer, expect that argument.

Three limits travel with these rulings. First, they decided disputes between buyers and the curator; a bank’s mortgage (hak tanggungan) over the land is a separate issue that this guide does not resolve. Second, whether a foreign buyer can take the unit itself depends on the title structure, which this guide does not cover — for many foreign buyers the realistic claim is a money claim. Third, every one of them turned on its own evidence of payment, possession and good faith.

Not paid up yet, or the contract is unfinished

If, when bankruptcy is declared, a two-sided contract with the debtor has not been performed or has been only partly performed, the other party may ask the curator to confirm, within a period agreed with the curator — or set by the supervisory judge if they cannot agree — whether the contract will be performed. If the curator does not answer, or is not willing to perform, the contract ends and the other party can claim damages as an unsecured creditor (Article 36(1)–(3)). Put that request in writing and keep proof of when it was sent.

Apartments, condotels and the 2023 circular

A 2023 Supreme Court circular to all courts records the chamber’s agreed position that a petition for bankruptcy or PKPU against a developer of apartments and/or flats (rumah susun) does not meet the requirement of simple proof under Article 8(4) (SEMA 3/2023, civil chamber ruling B.2.a.2). Its text names apartments and flats. The Supreme Court has applied it: in 2025 it relied on it in refusing an application to annul a court-approved composition with an apartment developer (MA 33 PK/Pdt.Sus-Pailit/2025).

Condotel and other strata units can legally be units in a rumah susun — the Kuta unit in the 2021 case above, which also carried a hotel room number, was described in the decision as a strata apartment unit. Separately, where a debtor files for PKPU itself, the law requires the court to grant temporary PKPU within three days (Article 225(2)).

Payments you received, and transactions before the collapse

• Payments of due debts. A payment of a debt that was already due can be annulled only if it is proven that the recipient knew a bankruptcy petition against the debtor had already been registered, or that the payment resulted from collusion between the debtor and that creditor to favour it over other creditors (Article 45). Before accepting a large payment from a company in trouble, check the Surabaya Commercial Court’s SIPP for a pending petition.
• Clawback actions belong to the curator. Claims to annul transactions that prejudice creditors are brought by the curator (Article 47(1)); creditors may object to the curator’s claim (Article 47(2)) and, in practice, can give the curator written information about suspicious transfers. For listed kinds of transactions that the debtor was not obliged to make, made within one year before the bankruptcy declaration — such as dealings with directors, family members or affiliated companies — the law presumes, unless proven otherwise, that both sides knew or should have known creditors would be harmed (Article 42).

The honest take

Insolvency procedures reward creditors who act early and turn up: the forum, the claim deadline and the vote are where most rights are kept or lost. Check the court’s SIPP, confirm the company’s registered seat, diary every date, and decide whether you are asking for the unit itself or for money. No outcome — and no recovery — can be promised. For how we handle these disputes, see villa and property disputes in Bali.

General information only, not legal advice for your situation. No result is guaranteed. Speak to a lawyer about your specific facts.