Corporate Rehabilitation Insights

*. This refers to a statutory or contractual claim or judicial charge on real or personal property that entitles a creditor to resort to said property for payment of the claim or debt secured by such.(* Point) Possessory lien Lien Claim Secured claim *. Which debtors are not covered by the FRIA?(* Point) DTI-registered sole proprietorship Banks SEC-registered partnerships Corporations duly organized and existing under Philippine laws *. Debt reliefs or remedies available to a juridical insolvent debtor, except:(* Point) Court-supervised rehabilitation Pre-negotiated rehabilitation Informal Restructuring Agreement Suspension of payments

*. In case of partnerships, the petition for voluntary insolvency must be approved by the:(* Point) Majority of the partners All of the partners */* vote of the partners */* vote of the partners *. In case of a corporation, the petition for voluntary insolvency must be approved by the:(* Point) by a majority vote of the board of directors and authorized by the vote of the stockholders representing at least */* of the outstanding capital stock, by a */* vote of the board of trustees and authorized by the vote of */* of the members two-thirds (*/*) of the members or stockholders majority vote of the board of directors or trustees and majority of the stockholders or members

*. Refers to a plan by which the financial well-being and viability of an insolvent debtor can be restored using various means including, but not limited to, debt forgiveness, debt rescheduling, reorganization or quasi-reorganization, dacion en pago, debt-equity conversion and sale of the business (or parts of it) as a going concern, or setting-up of new business entity, or other similar arrangements as may be approved by the court or creditors.(* Point) Liquidation Plan Rehabilitation Proceedings Insolvency Proceedings Rehabilitation Plan *. The nature of proceedings under FRIA:(* Point) in memoriam in personam in rem adversarial *. Refers to a creditor that is a member of a class of creditors, the consent of which is necessary for the approval of a Rehabilitation Plan under FRIA(* Point) Secured creditor Voluntary creditor Voting creditor Secured party

*. Refers to a corporation more than fifty percent (*%) of the voting stock of which is owned or controlled directly or indirectly through one or more intermediaries by another corporation, which thereby becomes its parent corporation.(* Point) Affiliate Control Associate Subsidiary *. In a voluntary proceedings under FRIA, the following must be included in a VERIFIED PETITION, except:(* Point) Schedule of the debtor's debts and liabilities including a list of creditors with their addresses, amounts of claims and collaterals, or securities, if any An inventory of all assets including receivables and claims against third parties History of the fact of insolvency, the cause of the debtor's insolvency or inability to pay its obligations as they become due; The names of at least three (*) nominees to the position of rehabilitation receiver

*. Any creditor or group of creditors with a claim of, or the aggregate of whose claims is, at least One Million Pesos (Php1,*,*.*) or at least twenty-five percent (*%) of the subscribed capital stock or partners' contributions, whichever is higher, may initiate involuntary proceedings against the debtor by filing a petition for rehabilitation with the court.(* Point) True False *. If a creditor, other than the petitioner/s, has initiated foreclosure proceedings against the debtor that will prevent the debtor from paying its debts as they become due or will render it insolvent, the insolvent debtor may file an involuntary proceedings under a court-supervised rehabilitation.(* Point) True False

*. If there is no genuine issue of fact or law on the claim/s of the petitioner/s, and that the due and demandable payments thereon have not been made for at least 90 days or that the debtor has failed generally to meet its liabilities as they fall due, the creditors may initiate involuntary proceedings against the debtor.(* Point) True False

*. Under PRE-NEGOTIATED REHABILITATION, an insolvent debtor, by itself or jointly with any of its creditors, may file a verified petition with the court for the approval of a pre-negotiated Rehabilitation Plan if the following requisites are complied with, except:(* Point) Rehabilitation Plan endorsed or approved by creditors holding at least */* of the total liabilities of the debtor */* of the creditors who approved must include secured creditors holding more than *% of the total secured claims of the debtor */* of the creditors who approved must include unsecured creditors holding more than *% of the total unsecured claims of the debtor Any creditor or group of creditors with a claim of, or the aggregate of whose claims is, at least Php1,*,*.* or at least *% of the subscribed capital stock or partners' contributions, whichever is higher,

*. An insolvent debtor who, possessing sufficient property to cover all his debts but foreseeing the impossibility of meeting them when they respectively fall due, -may file a verified petition that he be declared in the state of suspension of payments by the court.(* Point) True False *. Which of the following statements does not apply to a Petition for Suspension of Payments?(* Point) Debtor must file in the court of the province or city in which he has resides for six (*) months prior to the filing of his petition It only applies to individual debtors and not juridical debtors A schedule of debts and liabilities, an inventory of assets and a proposed agreement with creditors must be attached to the petition Must show proof that the properties are not enough to cover debts or liabilities

*. An individual debtor whose properties are not sufficient to cover his liabilities, and owing debts exceeding Five hundred thousand pesos (Php500,*.*), may apply to be discharged from his debts and liabilities by filing a verified petition with the court of the province or city in which he has resided for six (*) months prior to the filing of such petition.(* Point) True False *. Any creditor or group of creditors with a claim of, or with claims aggregating at least One Million pesos (Php1,*, *.*) may file a verified petition for liquidation with the court of the province or city in which the individual debtor resides.(* Point) True False

*. The following shall be considered acts of insolvency, except:(* Point) Intention to depart from the Philippines to defraud creditors Absence from the Philippines to defraud creditors Concealment of debtor to avoid legal process or concealment or removal of his property to avoid legal process. For 30 days after demand, he has paid money on deposit or received in a fiduciary capacity *. Only natural persons possessing good moral character may serve as Rehabilitation Receiver.(* Point) True False *. Even if he/she is not a court employee, the rehabilitation receiver is deemed to be an officer of the court.(* Point) True False

*. For an out-of-court or informal restructuring/workout agreement or Rehabilitation Plan to qualify under FRIA, it must meet the following minimum requirements, except:(* Point) debtor must agree approved by creditors representing at least *% of the secured obligations of the debtor approved by creditors representing at least *% of the unsecured obligations of the debtor approved by creditors holding at least *% of the total liabilities, secured and unsecured, of the debtor

*. A standstill period may be agreed upon by the parties pending negotiation and finalization of the out-of-court or informal restructuring/workout agreement or Rehabilitation Plan provided that the following requirements must be satisfied, except:(* Point) approved by creditors representing more than *% of the total liabilities of the debtor publication in a newspaper of general circulation in the Philippines once a week for * consecutive weeks does not exceed 90 days from the date of effectivity notice must invite creditors to participate in the negotiation for out-of-court rehabilitation or restructuring agreement

*. It refers to the postponement by court order, of the payment of debts of one who, while possessing sufficient property to cover his debts, foresees the impossibility of meeting them when they respectively fall due.(* Point) Insolvency Suspension of payments Rehabilitation Liquidation *. There is actual insolvency when the corporation’s assets are not enough to cover its liabilities, while technical insolvency exists when the corporation has enough assets but it foresees its inability to pay its obligations for more than one year from the filing of the petition.(* Point) True False

*. Upon the issuance of the Liquidation Order, no foreclosure proceeding shall be allowed for a period of one hundred twenty (*) days.(* Point) True False *. Upon the issuance of the Liquidation Order, all contracts of the debtor shall be deemed terminated and/or breached, unless the liquidator, within ninety (*) days from the date of his assumption of office, declares otherwise and the contracting party agrees.(* Point) True False