Legal Implications of Subsidiary Bankruptcy on the Parent State-Owned Enterprise

Abstract

Bankruptcy is a general seizure of all assets of the Bankrupt Debtor whose management and settlement are carried out by the Curator under the supervision of the Supervisory Judge as regulated in Law Number 37 of 2004 concerning Bankruptcy and Suspension of Debt Payment Obligations. A bankruptcy application can be submitted to a Limited Liability Company as long as it meets the provisions of Article 2 paragraph (1) of Law Number 37 of 2004 concerning Bankruptcy and Suspension of Debt Payment Obligations. This Limited Liability Company is not limited to ordinary Limited Liability Companies but also includes subsidiaries of the parent company of a State-Owned Enterprise. In this study, the author uses normative legal research, namely research on the legal system that regulates the legal consequences that occur to a BUMN as a parent company if the company that is its subsidiary is declared bankrupt. If a subsidiary of a BUMN parent company goes bankrupt, then the BUMN parent company cannot be held accountable because the two companies are separate entities. However, some provisions can make the parent company of a BUMN can be held responsible for the bankruptcy of its subsidiary, such as the involvement of the parent company in determining the company's management, finances, business decisions that result in the company, and others. In addition, the parent company of a BUMN can also be filed for bankruptcy if the parent company acts as a corporate guarantee for its subsidiary.