(1) Voluntary Proceedings.

Sec. 12

a. Identification of the debtor, its principal activities and its addresses;

b. Statement of the fact of and the cause of the debtor's insolvency or inability to pay its
obligations as they become due;

c. The specific relief sought pursuant to this Act;

d. The grounds upon which the petition is based;

e. Other information that may be required under this Act depending on the form of relief
requested;

f. 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;

g. An inventory of all its assets including receivables and claims against third parties;

h. A Rehabilitation Plan;

i. The names of at least three (3) nominees to the position of rehabilitation receiver; and

j. Other documents required to be filed with the petition pursuant to this Act and the rules
of procedure as may be promulgated by the Supreme Court.

(2) Involuntary Proceedings.

Sec 14.

a. identification of the debtor its principal activities and its address;

b. the circumstances sufficient to support a petition to initiate involuntary rehabilitation

proceedings under Section 13 of this Act;

c. the specific relief sought under this Act;

d. a Rehabilitation Plan;

e. the names of at least three (3) nominees to the position of rehabilitation receiver;

f. other information that may be required under this Act depending on the form of relief
requested; and

g. other documents required to be filed with the petition pursuant to this Act and the rules of
procedure as may be promulgated by the Supreme Court.
Section 16. Commencement of Proceedings and Issuance of a Commencement Order. - The
rehabilitation proceedings shall commence upon the issuance of the Commencement Order, which
shall:

(a) identify the debtor, its principal business or activity/ies and its principal place of business;

(b) summarize the ground/s for initiating the proceedings;

(c) state the relief sought under this Act and any requirement or procedure particular to the
relief sought;

(d) state the legal effects of the Commencement Order, including those mentioned in Section
17 hereof;

(e) declare that the debtor is under rehabilitation;

(f) direct the publication of the Commencement Order in a newspaper of general circulation
in the Philippines once a week for at least two (2) consecutive weeks, with the first
publication to be made within seven (7) days from the time of its issuance;

(g) If the petitioner is the debtor direct the service by personal delivery of a copy of the
petition on each creditor holding at least ten percent (10%) of the total liabilities of the debtor
as determined from the schedule attached to the petition within five (5) days; if the
petitioner/s is/are creditor/s, direct the service by personal delivery of a copy of the petition
on the debtor within five (5) days;

(h) appoint a rehabilitation receiver who may or not be from among the nominees of the
petitioner/s and who shall exercise such powers and duties defined in this Act as well as the
procedural rules that the Supreme Court will promulgate;

(i) summarize the requirements and deadlines for creditors to establish their claims against
the debtor and direct all creditors to their claims with the court at least five (5) days before
the initial hearing;

(j) direct Bureau of internal Revenue (BIR) to file and serve on the debtor its comment on or
opposition to the petition or its claim/s against the debtor under such procedures as the
Supreme Court provide;

(k) prohibit the debtor's suppliers of goods or services from withholding the supply of goods
and services in the ordinary course of business for as long as the debtor makes payments
for the services or goods supplied after the issuance of the Commencement Order;

(l) authorize the payment of administrative expenses as they become due;

(m) set the case for initial hearing, which shall not be more than forty (40) days from the date
of filing of the petition for the purpose of determining whether there is substantial likelihood
for the debtor to be rehabilitated;

(n) make available copies of the petition and rehabilitation plan for examination and copying
by any interested party;
 (o) indicate the location or locations at which documents regarding the debtor and the
proceedings under Act may be reviewed and copied;

(p) state that any creditor or debtor who is not the petitioner, may submit the name or
nominate any other qualified person to the position of rehabilitation receiver at least five (5)
days before the initial hearing;

(q) include s Stay or Suspension Order which shall:

(1) suspend all actions or proceedings, in court or otherwise, for the enforcement of
claims against the debtor;

(2) suspend all actions to enforce any judgment, attachment or other provisional
remedies against the debtor;

(3) prohibit the debtor from selling, encumbering, transferring or disposing in any
manner any of its properties except in the ordinary course of business; and

(4) prohibit the debtor from making any payment of its liabilities outstanding as of the
commencement date except as may be provided herein.

Section 17. Effects of the Commencement Order. - Unless otherwise provided for in this Act, the
court's issuance of a Commencement Order shall, in addition to the effects of a Stay or Suspension
Order described in Section 16 hereof:

(a) vest the rehabilitation with all the powers and functions provided for this Act, such as the
right to review and obtain records to which the debtor's management and directors have
access, including bank accounts or whatever nature of the debtor subject to the approval by
the court of the performance bond filed by the rehabilitation receiver;

(b) prohibit or otherwise serve as the legal basis rendering null and void the results of any
extrajudicial activity or process to seize property, sell encumbered property, or otherwise
attempt to collection or enforce a claim against the debtor after commencement date unless
otherwise allowed in this Act, subject to the provisions of Section 50 hereof;

(c) serve as the legal basis for rendering null and void any setoff after the commencement
date of any debt owed to the debtor by any of the debtor's creditors;

(d) serve as the legal basis for rendering null and void the perfection of any lien against the
debtor's property after the commencement date; and

(e) consolidate the resolution of all legal proceedings by and against the debtor to the court
Provided. However, That the court may allow the continuation of cases on other courts
where the debtor had initiated the suit.

Section 18. Exceptions to the Stay or Suspension Order. - The Stay or Suspension Order shall not
apply:

(a) to cases already pending appeal in the Supreme Court as of commencement

date Provided, That any final and executory judgment arising from such appeal shall be
referred to the court for appropriate action;
 (b) subject to the discretion of the court, to cases pending or filed at a specialized court or
quasi-judicial agency which, upon determination by the court is capable of resolving the
claim more quickly, fairly and efficiently than the court: Provided, That any final and
executory judgment of such court or agency shall be referred to the court and shall be
treated as a non-disputed claim;

(c) to the enforcement of claims against sureties and other persons solidarily liable with the
debtor, and third party or accommodation mortgagors as well as issuers of letters of credit,
unless the property subject of the third party or accommodation mortgage is necessary for
the rehabilitation of the debtor as determined by the court upon recommendation by the
rehabilitation receiver;

(d) to any form of action of customers or clients of a securities market participant to recover
or otherwise claim moneys and securities entrusted to the latter in the ordinary course of the
latter's business as well as any action of such securities market participant or the appropriate
regulatory agency or self-regulatory organization to pay or settle such claims or liabilities;

(e) to the actions of a licensed broker or dealer to sell pledged securities of a debtor
pursuant to a securities pledge or margin agreement for the settlement of securities
transactions in accordance with the provisions of the Securities Regulation Code and its
implementing rules and regulations;

(f) the clearing and settlement of financial transactions through the facilities of a clearing
agency or similar entities duly authorized, registered and/or recognized by the appropriate
regulatory agency like the Bangko Sentral ng Pilipinas (BSP) and the SEC as well as any
form of actions of such agencies or entities to reimburse themselves for any transactions
settled for the debtor; and

(g) any criminal action against individual debtor or owner, partner, director or officer of a
debtor shall not be affected by any proceeding commend under this Act.

Section 21. Effectivity and Duration of Commencement Order. - Unless lifted by the court, the
Commencement Order shall be for the effective for the duration of the rehabilitation proceedings for
as long as there is a substantial likelihood that the debtor will be successfully rehabilitated. In
determining whether there is substantial likelihood for the debtor to be successfully rehabilitated, the
court shall ensure that the following minimum requirements are met:

(a) The proposed Rehabilitation Plan submitted complies with the minimum contents
prescribed by this Act;

(b) There is sufficient monitoring by the rehabilitation receiver of the debtor's business for the
protection of creditors;

(c) The debtor has met with its creditors to the extent reasonably possible in attempts to
reach consensus on the proposed Rehabilitation Plan;

(d) The rehabilitation receiver submits a report, based on preliminary evaluation, stating that
the underlying assumptions and the goals stated in the petitioner's Rehabilitation Plan are
realistic reasonable and reasonable or if not, there is, in any case, a substantial likelihood for
the debtor to be successfully rehabilitated because, among others:
 (1) there are sufficient assets with/which to rehabilitate the debtor;

(2) there is sufficient cash flow to maintain the operations of the debtor;

(3) the debtor's, partners, stockholders, directors and officers have been acting in
good faith and which due diligence;

(4) the petition is not s sham filing intended only to delay the enforcement of the
rights of the creditor's or of any group of creditors; and

(5) the debtor would likely be able to pursue a viable Rehabilitation Plan;

(e) The petition, the Rehabilitation Plan and the attachments thereto do not contain any
materially false or misleading statement;

(f) If the petitioner is the debtor, that the debtor has met with its creditor/s representing at
least three-fourths (3/4) of its total obligations to the extent reasonably possible and made a
good faith effort to reach a consensus on the proposed Rehabilitation Plan if the petitioner/s
is/are a creditor or group of creditors, that/ the petitioner/s has/have met with the debtor and
made a good faith effort to reach a consensus on the proposed Rehabilitation Plan; and

(g) The debtor has not committed acts misrepresentation or in fraud of its creditor/s or a
group of creditors.

Section 24. Report of the Rehabilitation Receiver. - Within forty (40) days from the initial hearing
and with or without the comments of the creditors or any of them, the rehabilitation receiver shall
submit a report to the court stating his preliminary findings and recommendations on whether:

(a) the debtor is insolvent and if so, the causes thereof and any unlawful or irregular act or
acts committed by the owner/s of a sole proprietorship partners of a partnership or directors
or officers of a corporation in contemplation of the insolvency of the debtor or which may
have contributed to the insolvency of the debtor;

(b) the underlying assumptions, the financial goals and the procedures to accomplish such
goals as stated in the petitioner's Rehabilitation Plan are realistic, feasible and reasonable;

(c) there is a substantial likelihood for the debtor to be successfully rehabilitated;

(d) the petition should be dismissed; and

(e) the debtor should be dissolved and/or liquidated.

Section 25. Giving Due Course to or Dismissal of Petition, or Conversion of Proceedings. - Within

ten (10) days from receipt of the report of the rehabilitation receiver mentioned in Section 24 hereof
the court may:

(a) give due course to the petition upon a finding that:

(1) the debtor is insolvent; and

 (2) there is a substantial likelihood for the debtor to be successfully rehabilitated;

(b) dismiss the petition upon a finding that:

(1)debtor is not insolvent;

(2) the petition i8 a sham filing intended only to delay the enforcement of the rights of
the creditor/s or of any group of creditors;

(3)the petition, the Rehabilitation Plan and the attachments thereto contain any
materially false or misleading statements; or

(4)the debtor has committed acts of misrepresentation or in fraud of its creditor/s or a

group of creditors;

(c)convert the proceedings into one for the liquidation of the debtor upon a finding that:

(1)the debtor is insolvent; and

(2)there is no substantial likelihood for the debtor to be successfully rehabilitated as

determined in accordance with the rules to be promulgated by the Supreme Court.

Section 31.Powers, Duties and Responsibilities of the Rehabilitation Receiver. - The rehabilitation
receiver shall be deemed an officer of the court with the principal duty of preserving and maximizing
the value of the assets of the debtor during the rehabilitation proceedings, determining the viability of
the rehabilitation of the debtor, preparing and recommending a Rehabilitation Plan to the court, and
implementing the approved Rehabilitation Plan, To this end, and without limiting the generality of the
foregoing, the rehabilitation receiver shall have the following powers, duties and responsibilities:

(a)To verify the accuracy of the factual allegations in the petition and its annexes;

(b)To verify and correct, if necessary, the inventory of all of the assets of the debtor, and
their valuation;

(c)To verify and correct, if necessary, the schedule of debts and liabilities of the debtor;

(d)To evaluate the validity, genuineness and true amount of all the claims against the debtor;

(e)To take possession, custody and control, and to preserve the value of all the property of
the debtor;

(f)To sue and recover, with the approval of the court, all amounts owed to, and all properties
pertaining to the debtor;

(g)To have access to all information necessary, proper or relevant to the operations and
business of the debtor and for its rehabilitation;

(h) To sue and recover, with the. approval of the court, all property or money of the debtor
paid, transferred or disbursed in fraud of the debtor or its creditors, or which constitute undue
preference of creditor/s;
 (i) To monitor the operations and the business of the debtor to ensure that no payments or
transfers of property are made other than in the ordinary course of business;

(j) With the court's approval, to engage the services of or to employ persons or entities to
assist him in the discharge of his functions;

(k) To determine the manner by which the debtor may be best rehabilitated, to review) revise
and/or recommend action on the Rehabilitation Plan and submit the same or a new one to
the court for approval;

(1) To implement the Rehabilitation Plan as approved by the court, if 80 provided under the
Rehabilitation Plan;

(m) To assume and exercise the powers of management of the debtor, if directed by the
court pursuant to Section 36 hereof;

(n) To exercise such other powers as may, from time to time, be conferred upon him by the
court; and

To submit a status report on the rehabilitation proceedings every quarter or as may be

required by the court motu proprio. or upon motion of any creditor. or as may be provided, in
the Rehabilitation Plan.

Unless appointed by the court, pursuant to Section 36 hereof, the rehabilitation receiver shall
not take over the management and control of the debtor but may recommend the
appointment of a management committee over the debtor in the cases provided by this Act.

Section 32.Removal of the Rehabilitation Receiver. – The rehabilitation receiver may be removed at
any time by the court either motu proprio or upon motion by any creditor/s holding more than fifty
percent (50%) of the total obligations of the debtor, on such grounds as the rules of procedure may
provide which shall include, but are not limited to, the following:

(a) Incompetence, gross negligence, failure to perform or failure to exercise the proper
degree of care in the performance of his duties and powers;

(b) Lack of a particular or specialized competency required by the specific case;

(c) Illegal acts or conduct in the performance of his duties and powers;

(d) Lack of qualification or presence of any disqualification;

(e) Conflict of interest that arises after his appointment; and

(f) Manifest lack of independence that is detrimental to the general body of the stakeholders.

CHAPTER III
PRE-NEGOTIATED REHABILITATION

Section 76. Petition by Debtor.

(a) a schedule of the debtor's debts and liabilities;

(b) an inventory of the debtor's assets;

(c) the pre-negotiated Rehabilitation Plan, including the names of at least three (3) qualified
nominees for rehabilitation receiver; and

(d) a summary of disputed claims against the debtor and a report on the provisioning of funds to
account for appropriate payments should any such claims be ruled valid or their amounts adjusted.

Section 77. Issuance of Order.

(a) identify the debtor, its principal business of activity/ies and its principal place of business;

(b) declare that the debtor is under rehabilitation;

(c) summarize the ground./s for the filling of the petition;

(d) direct the publication of the Order in a newspaper of general circulation in the Philippines once a
week for at least two (2) consecutive weeks, with the first publication to be made within seven (7)
days from the time of its issuance;

(e) direct the service by personal delivery of a copy of the petition on each creditor who is not a
petitioner holding at least ten percent (10%) of the total liabilities of the debtor, as determined in the
schedule attached to the petition, within three (3) days;

(f) state that copies of the petition and the Rehabilitation Plan are available for examination and
copying by any interested party;

(g) state that creditors and other interested parties opposing the petition or Rehabilitation Plan may
file their objections or comments thereto within a period of not later than twenty (20) days from the
second publication of the Order;

(h) appoint a rehabilitation receiver, if provided for in the Plan; and

(i) include a Suspension or Stay Order as described in this Act.