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    Financial Rehabilitation and Insolvency Act

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    Reynelle Cata-al
    The document summarizes key parts of the Financial Rehabilitation and Insolvency Act of 2010 in the Philippines. It discusses how an ailing corporation can file a petition for rehabilitation to get relief from creditors and suspend all claims while a rehabilitation plan is approved. The policies of the Act aim to encourage debtors and creditors to resolve competing claims through compromise and maintain certainty, predictability, and equitable treatment in commercial affairs. The document also defines rehabilitation as restoring a corporation to solvency and continuing operations, distinguishing it from liquidation which winds up a corporation.

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    Financial Rehabilitation and Insolvency Act

    Uploaded by

    Reynelle Cata-al
    217 views2 pages
    The document summarizes key parts of the Financial Rehabilitation and Insolvency Act of 2010 in the Philippines. It discusses how an ailing corporation can file a petition for rehabilitation to get relief from creditors and suspend all claims while a rehabilitation plan is approved. The policies of the Act aim to encourage debtors and creditors to resolve competing claims through compromise and maintain certainty, predictability, and equitable treatment in commercial affairs. The document also defines rehabilitation as restoring a corporation to solvency and continuing operations, distinguishing it from liquidation which winds up a corporation.

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    The document summarizes key parts of the Financial Rehabilitation and Insolvency Act of 2010 in the Philippines. It discusses how an ailing corporation can file a petition for rehabilitation to get relief from creditors and suspend all claims while a rehabilitation plan is approved. The policies of the Act aim to encourage debtors and creditors to resolve competing claims through compromise and maintain certainty, predictability, and equitable treatment in commercial affairs. The document also defines rehabilitation as restoring a corporation to solvency and continuing operations, distinguishing it from liquidation which winds up a corporation.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    217 views2 pages

    Financial Rehabilitation and Insolvency Act

    Uploaded by

    Reynelle Cata-al
    The document summarizes key parts of the Financial Rehabilitation and Insolvency Act of 2010 in the Philippines. It discusses how an ailing corporation can file a petition for rehabilitation to get relief from creditors and suspend all claims while a rehabilitation plan is approved. The policies of the Act aim to encourage debtors and creditors to resolve competing claims through compromise and maintain certainty, predictability, and equitable treatment in commercial affairs. The document also defines rehabilitation as restoring a corporation to solvency and continuing operations, distinguishing it from liquidation which winds up a corporation.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Financial Rehabilitation and Insolvency Act (FRIA) of 2010 Notes - Part 1

    What happens here is that there is an ailing corporation needing reprieve


    from its creditor/s. The corporation files a petition in the Regional Trial Court
    for the purpose of approving a Rehabilitation Plan. In the meantime, all
    claims against the corporation are suspended.

    Policies (Sec. 2)
    1.To encourage debtors, both juridical and natural persons, and their
    creditors to collectively and realistically resolve and adjust competing claims
    and property rights. (achieve compromise/ amicable settlement)
    2. Ensure a timely, fair, transparent, effective and efficient rehabilitation or
    liquidation of debtors.
    3. The rehabilitation or liquidation shall be made with a view to:
    - ensure or maintain certainty and predictability in commercial affairs
    - preserve and maximize the value of the assets of these debtors
    - recognize creditor rights and respect priority of claims
    - ensure equitable treatment of creditors who are similarly situated.

    When rehabilitation is not feasible

    Resort to speedy and orderly liquidation of the debtor's assets and the
    settlement of their obligations.

    Meaning of Rehabilitation

    Restoration of the debtor to a condition of successful operation and


    solvency, if it is shown that its continuance of operation is economically
    feasible and its creditors can recover by way of the present value of
    payments projected in the plan, more if the debtor continues as a going
    concern than if it is immediately liquidated.

    Difference between Rehabilitation and Liquidation

    Rehabilitation – connotes reopening or reorganization. Aim is to restore


    corporation to its successful operation and continue corporate life
    Liquidation – connotes winding up or settling with creditors and debtors.

    Kinds of Proceedings
    Involuntary proceedings shall refer to proceedings initiated by creditors.
    Voluntary proceedings shall refer to proceedings initiated by the debtor.

    Nature of Proceedings (Sec. 3)

    Petition for Rehabilitation is:


    1. In rem - Jurisdiction over all persons affected by the proceedings shall be
    considered as acquired upon publication of the notice of the commencement
    of the proceedings in any newspaper of general circulation in the Philippines
    in the manner prescribed by the rules of procedure to be promulgated by the
    Supreme Court.
    This is not in personam where jurisdiction is acquired only thru
    personal service.
    2. Summary – Because it establishes a status or fact (that the corporation
    needs to be rehabilitated)
    3. Non-adversarial – Parties to achieve win-win solution

    Petition for rehabilitation is a special proceedings since its purpose is to


    establish a fact.

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