Rehabilitation As A Corporate Rescue Effort For Bankrupt Company

Abstract

A company experiencing financial difficulties to the extent that it is unable to fulfill its obligations to its creditors thats declared bankrupt by a court decision. In practice, bankrupt companies have the opportunity to undergo rehabilitation in order to restore their legal status and business continuity, but this effort is still rarely used. This study examines the factors contributing to the rarity of rehabilitation efforts in corporate bankruptcy cases in Indonesia and is rehabilitation can serve as a corporate rescue for bankrupt company. This study employs a normative legal method with a statuatory, conceptual, and case study approach. The results of the study indicate there are several causes to the minimal number of rehabilitation requests is legal uncertainty due to creditors' enforcement rights post-bankruptcy and the usage of bankruptcy itself, as well as the fact that the majority of bankrupt companies are in a state of severe insolvency and are unable to meet the requirements for full payment or satisfy creditors.However, rehabilitation could be a complementary step for corporate rescue effort, as it can restore the debtor's good name and legal capacity to resume business operations once all obligations have been fulfilled.