Garuda Indonesia (GA, Jakarta Soekarno-Hatta) has asked the United States Bankruptcy Court for the Southern District of New York to recognise, under Chapter 15 of the US Bankruptcy Code, the results of its recent debt restructuring concluded in Jakarta, CEO Irfan Setiaputra revealed on September 26.

Chapter 15 allows for cooperation between US and foreign courts, as long as there is financial interest in proceedings that is favourable to the United States. Garuda filed the request at the end of last week, the chief executive said at a session of the House of Representatives, stressing that doing so does not mean the company has declared bankruptcy.

This was done, he said, so that the court would recognise the results of the restructuring under the local legal process known as the Suspension of Debt Payment Obligations (Penundaan Kewajiban Pembayaran Utang - PKPU), which the carrier has now emerged from. The government of Indonesia claimed at the end of June that Garuda and its creditors - 347 of them or 95.1% of the total - had agreed to halve the airline’s debt to USD5.1 billion, in a deal that a bankruptcy court in Jakarta oversaw, triggering a search for new investors.

“So we entered Chapter 15 for recognition. We have completed the PKPU as you know, and my friends in the country’s legal sector know that we have done it,” Setiaputra assured the House.

However, the Indonesian restructuring deal is now being challenged in the Supreme Court of New South Wales in Sydney by Ireland-based lessor Greylag Goose, which is managed by New York-based private equity firm Avenue Capital Group. And another major creditor, Boeing (BOE, Washington National), has yet to comment let alone take part in the restructuring plan.

According to a disclosure that Garuda Indonesia released on July 6, claims from Boeing to Garuda are “estimated in USD822,812,645.”

At a parliamentary hearing on September 26, Rionald Silaban, a senior finance ministry official, commented that the manufacturer “will eventually participate.”

Boeing declined to comment to ch-aviation about the issue.