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Hedge Funds Cry Foul Over Indonesian Debt Workout: Asean Credit

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Five hedge funds are testing Indonesia’s legal protections for foreign investors after a local court barred them from PT Bakrie Telecom’s debt restructuring talks.

The funds and one other bondholder are asking a New York court to quash a ruling by a Jakarta district judge that they can’t vote on the workout arrangements because their defaulted notes were issued by an offshore special-purpose vehicle. The investors, who own 28 percent of the $380 million May 2015 dollar-denominated securities, said in the suit they will recover less than 20 cents on the dollar under the plan.