The airline made the request on Friday. According to Investopedia, the code allows for cooperation between US and foreign courts when foreign bankruptcy proceedings touch upon US financial interests.

The deal contains majority creditors’ approval for a proposal to restructure Garuda’s US$10.1 billion liabilities, which after the process would be halved to just $5.1 billion.

“It is important that we ask for recognition from many jurisdictions. For now, we’ve filed in the United States under its Chapter 15,” Garuda CEO Irfan Setiaputra told reporters on Monday after a meeting with House of Representative’ Commission XI, which oversees finance and the state budget.

Read also: Garuda still faces repayment risks, possible lawsuits: Experts

The request was necessary, as Garuda made the deal under a debt-suspension case (PKPU) in the local jurisdiction, the scope of which is limited to those willing to follow Indonesian law.

However, several Garuda creditors, including Boeing, decided not to back the its debt-restructuring proposal, therefore, according to some experts they may still pose a risk to the airline, as lawsuits are still possible overseas.

For instance, the carrier's restructuring agreement is currently being challenged in the country's Supreme Court by an Ireland-based aircraft lessor, Greylag Goose Leasing, Reuters wrote on Monday, but no decision has been made so far.

Irfan explained the airline chose the US as the country was often referenced by many countries, which would ease Garuda from the need to apply for recognition in numerous foreign courts.

He was aware that some creditors had filed lawsuits against the airline in other countries like France, but he stressed that filing another registration outside the US was not necessary yet. This includes the possibility of filing for similar recognition in the United Kingdom and Singapore, among many other jurisdictions, where many lessors in the world are based.

“Not yet. We have not decided to do it in any other country, but as far as I know there are some countries, whose courts have decided to follow the Indonesian ruling,” Irfan said.

Following Garuda’s restructuring deal, the airline was preparing for a rights issue between November and December this year.

Garuda estimates it will raise up to $863 million, comprising $358 million from its private shareholders and the public and a $505 million state capital injection, which would come beforehand.

Read also: Garuda set to be profitable again next year

However, the $358 million was still subjected to many circumstances and could still change, depending on investors’ appetite, the airline’s financial performance near the end of this year, as well as its projection for next year’s operations, he said, adding the airline also opened the possibility of offering the chance to other strategic and financial investors.

“So it’s actually still wait and see. But asked if we needed the money, we did need it,” Irfan said.

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