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US Chapter 11 and its impacts for Indonesia’s market
In order to mitigate the risk of noninvolvement during Chapter 11 proceedings, Indonesian trade players should at all times maintain good communication with their US business partners, the Indonesian government and other Indonesian stakeholders and supporting professionals.
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Stuart Malcolm, a doctor with the Haight Ashbury Free Clinic visits homeless people to talk about coronavirus (COVID-19) on the street in the Haight Ashbury area of San Francisco California on March 17, 2020. - The coronavirus took a bite out of US retail sales in February, government data released March 17, 2020 showed, with almost all sectors falling and fuel sales leading the decline.The data are the latest in the growing body of evidence of the virus' economic toll, but the survey was taken before the outbreak spread across the United States and put entire counties on lockdown, which has led many economists to conclude the US is likely heading into recession. (AFP/Josh Edelson)
T
he COVID-19 pandemic has tormented the world for almost 10 months. Significant aspects of our lives have been impacted, and, despite being social creatures, we have been forced to keep physical distance from each other, which has ultimately hindered our social and economic activities.
The unforeseen force of COVID-19 has rattled the world’s major economies, from China to the United States, Europe, Australia and many more developed and developing countries.
It is difficult to avoid the domino effect of economic recession, as we are all in this challenging situation together, and our business activities are all intertwined. Indonesia is on the edge of an economic recession as well, with the threat of imminent recession expected to be detailed in its upcoming third quarter report.
The threat is vivid, as many of Indonesia’s country partners are struggling with economic recessions of their own, which could directly impact Indonesian business players. Many international companies have filed for bankruptcy.
Take the example of the world’s biggest economy, the US. According to Forbes, among the US companies that have filed for bankruptcy, nearly 30 carry liabilities of at least US$50 million or higher. At a glance, we might not realize that the bad news also impacts Indonesian business players.
How, exactly? Well, among the 30 US companies, some of them have outstanding debts to Indonesian companies as their creditors, partners, or suppliers.
This issue deserves our attention. The threat comes from the US’ Chapter 11 on bankruptcy. Indonesian business players need to be well aware of the Chapter 11 process, especially when they are not able to take part directly.
