Indonesia, beset by violence and economic collapse, has many other troubles, but the courts' mishandling of a new bankruptcy law has made matters worse.

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Partly as a result, Beijing is now putting the finishing touches to a new bankruptcy law which vastly increases the rights of creditors and clarifies the procedure.

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The case is set to be a big test of China's new bankruptcy law, which came into effect in 2007 but has rarely been applied to overseas-listed companies with assets in China.

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But a new obstacle has arisen: Congress has approved two bills whose effect is to reverse the recent repeal of a bankruptcy law which favoured debtors at the expense of banks.

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Second, as with municipal bankruptcy, a new bankruptcy law would allow states in default or in danger of default to reorganize their finances free from their union contractual obligations.

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The law was finally passed seven years later, implementing a new set of guidelines for bankruptcy filings and safeguards to cut down on potential fraud and abuse.

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