Fria Discussion

1. Liqu Liquid idat atio ion n Debtors

of

Inso Insolv lven entt

Juri Juridic dical al

t any ti time me dur during ing the pen penden dency cy of cou court' rt'sup superv ervise ised d rehabilitation rehabilita tion proceedings or pre'negotiat pre'negotiated ed rehabilita rehabilitation tion proce pr oceedi edings ngs,,

The liquidation of insolvent debtors, as opposed to individual debtor deb tors, s,

may

be

volun vo lunta tary ry

or

involu inv olunta ntary ry..

Volun Vo luntar tary y

liquidati liqui dation on proc proceedin eedings gs are init initiate iated d by the debt debtor or itse itself, lf, while whil e invo involunta luntary ry insol insolvency vency proceedings proceedings are init initiate iate by three or more creditors. [Back [ Back to the top] top ]

1.1 Voluntary Liquidation

the

debto deb torr

may ma y

also als o

initia ini tiate te

liquid liq uidat ation ion

proceedings by filing a motion in the same court where the rehab reh abili ilita tatio tion n

procee pro ceedin dings gs ar are e

pendi pen ding ng to con conver vertt the

rehabilitation proceedings into liquidation proceedings. The motion shall be verified, shall contain or set forth the same matters required in the preceding paragraph, paragraph, and state that the debtor is seeking immediate dissolution and termination of its corporate e(istence. )f the petition or the motion, as

n insol insolvent vent debtor may apply for liqu liquidat idation ion by filin filing g a

the case may be, is sufficient in form and substance, the

petition for liquidation with the court. The petition shall be

court shall issue a *iquidation +rder. [ Back to the top] top]

verified, veri fied, shall establish establish the insolvency insolvency of the debt debtor or and shall contain, whether as an attachment or as part of the body of the petition! "a# a 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%

1.2 Involuntary Liquidation Three "&# or more creditors the aggregate of whose claims is at least either +ne illion -esos "-h-,///,///,//# or at least twenty'five percent "012# of the subscribed capital stock or partner$s contributions of the debtor, whichever is higher hig her,, ma may y app apply ly for and seek the li liqui quidat dation ion of an

"b# an inventory of all its assets including receivables and

insolvent inso lvent debtor debtor by filing a peti petition tion for liqu liquidat idation ion of the

claims against third parties% and

debtor with the court. The petition shall show that!

"c# the names of at least three "&# nominees to the position

"a# there is no genuine issue of fact or law on the claim3s of 

of liquidator.

the th e

peti pe titi tion oner er3s 3s,,

and an d

that th at

the th e

due du e

and an d

dema de mand ndab able le

payments paym ents thereon thereon have not been mad made e for at leas leastt one

hundred eighty "4/# days or that the debtor has failed

"0# directing the debtor and all creditors who are not the

generally to meet its liabilities as they fall due% and

petitioners to file their comment on the petition or motion within fifteen "1# days from the date of last publication.

"b# there is no substantial likelihood that the debtor may be rehabilitated.

)f,

after

considering

the

comments

filed,

the

court

determines that the petition or motion is meritorious, it shall t any time during the pendency of or after a court' supervised rehabilitation

proceedings

or

pre'negotiated

rehabilitation proceedings, three "&# or more creditors whose

claims

is

at

least

either

issue the *iquidation +rder. [Back to the top]

+ne

illion

-esos

1.3 Conversion by the Court into Liquidation Proceedings

"-h-,///,///.//# or at least twenty'five percent "012# of  the subscribed capital or partner$s contributions of the

5uring the pendency of court'supervised or pre'negotiated

debtor, whichever is higher, may also initiate liquidation

rehabilitation

proceedings by filing a motion in the same court where the

conversion

rehabilitation proceedings are

the

proceedings pursuant to "a# 6ection 01"c# of this ct% or "b#

rehabilitation proceedings into liquidation proceedings. The

6ection 70 of this ct% or "c# 6ection 71 of this ct% or "d#

motion shall be verified, shall contain or set forth the same

6ection 8/ of this ct% or at any other time upon the

matters required in the preceding paragraph, and state that

recommendation of the rehabilitation receiver that the

the movants are seeking the immediate liquidation of the

rehabilitation of the debtor is not feasible. Thereupon, the

debtor.

court shall issue the *iquidation +rder. [Back to the top]

)f the petition or motion is sufficient in form and substance,

1. Po!ers of the "#C

pending

to convert

of

proceedings, rehabilitation

the

court

may

proceedings

to

order

the

liquidation

the court shall issue an +rder! The provisions regarding the liquidation of insolvent 9uridical "# directing the publication of the petition or motion in a

debtors shall not affect the regulatory powers of the

newspaper of general circulation once a week for two "0#

6ecurities and :(change ;ommission "6:;# under 6ection <

consecutive weeks% and

of -residential 5ecree =o. 8/0', as amended, with respect

to any dissolution and liquidation proceeding initiated and

)f the court finds the petition sufficient in form and

heard before it. [Back to the top]

substance, it shall, within five "1# working days from the

2. Insolvency of Individual Debtors

filing of the petition, issue an +rder! "a# calling a meeting of all the creditors named in the

)nsolvent individual debtors have the following options! "a#

schedule of debts and liabilities at such time not less than

6uspension of payments% "b# Voluntary liquidation% and "c#

fifteen "1# days nor more than forty "?/# days from the

)nvoluntary liquidation. [Back to the top]

date of such +rder and designating the date, time and place

2.2 "us$ension of Pay%ents

of the meeting%

0.0. -etition

"b# directing such creditors to prepare and present written evidence of their claims before the scheduled creditors$ 

n individual debtor who, possessing sufficient property to

meeting%

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 of the province or city in which he has resides for si( "e shall attach to his petition, as a minimum! "a# a schedule of debts and liabilities% "b# an inventory of assets% and "c# a proposed agreement with his creditors. [Back to the top] 0.0.0 ction on the -etition

"c# directing the publication of the said order in a newspaper of general circulation published in the province or city in which the petition is filed once a week for two "0# consecutive weeks, with the first publication to be made within seven "7# days from the time of the issuance of the +rder% "d# directing the clerk of court to cause the sending of a copy of the +rder by registered mail, postage prepaid, to all creditors named in the schedule of debts and liabilities% "e#

forbidding

the

individual

debtor

from

selling,

transferring, encumbering or disposing in any manner of his property, e(cept those used in the ordinary operations of 

commerce or of industry in which the petitioning individual

last illness and funeral of the wife or children of the debtor

debtor is engaged so long as the proceedings relative to the

incurred in the si(ty "