Financial Rehabilitation and Insolvency Act Flashcards
Persons, institutions or businesses not covered by fria (BIGP)
banks, insurance companies, pre-need companies, national government agencies, local government agencies and units
It’s all referred to the financial condition of a debtor that is generally and able to pay it’s or his liabilities as they fall due in the ordinary course of business or financial condition of a debtor when he has liabilities greater than its or his assets
insolvency
An individual who possesses efficient property to cover all his debts but for seeing them possibility of meeting them when they respectively fall do we find 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 resided for __________ prior to the filing of his petition. He shall attached to the petition as a minimum a schedule of debts and liabilities, and inventory of assets, and proposed agreement with his creditors
6 months
If the court finds the petition for declaration of statement of suspension of payments in form and substance, it’s shall within __________ from the filing of the petition, issue an order calling a meeting of all the creditors named in the schedule of debts and liabilities at such time ___________ from the date of such order and designating the date time and place of the meeting
5 working days; 15 to 40 days
True or false. Creditors including as those having claims for personal labor, maintenance, expense of last illness and for the role of the wife or children of the debtor incurred in the 60 days immediately prior to the filing of the petition can institute proceedings to collect claim from the debtor during the pending execution of an order of suspension of payments
false
True or false. Properties held as security by secured creditors shall not be the subject of such suspension order
true
Duration of suspension of payments or suspension order issued by the trial court
lapse when 3 months shall have past without the proposed agreement being accepted by the creditors or as soon as such agreement is denied
Quorum in meeting of creditors for the approval of the proposal of insolvent individual debtor
3/5
Required vote by the creditors for the approval of the proposal of insolvent debtor (double majority)
2/3 of the creditors voting unite a poem the same proposition; and the claims represented by said majority vote amount to at least 3/5 of the total liabilities of the debtor
No creditor who incurred his credit within ________ prior to the filing of the petition shall be entitled to vote
90 days
What are the instances when the proposed agreement by the insolvent debtor is deemed rejected by the creditors
- No quorum
- Required vote not met
An individual death or whose properties are not sufficient to cover his liabilities, and owing debts exceeding __________ 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
500,000
If the court finds the petition sufficient in form and substance, it shall within 5 working days issue _____________
liquidation order
What are the requirements for voluntary liquidation of insolvent individual debtor
- Properties are not sufficient to cover his liabilities
- The deaths of the individual debtor exceed 500,000
Acts of insolvency which must be alleged by the creditors in the petition for liquidation
any act which intend to the fraud the creditors or to delay the liquidation process or is in default
Any creditor or group of creditors with claim of or with claims aggregating at least _____________ may file a verified petition for liquidation with the court of the province or city in which the individual debtor resides
500,000
True or false. The petitioning creditors shall post a bond in such as the court direct condition that if the petition for liquidation is dismissed by the court or withdrawn by the petitioner or the debtor shall not be declared an insolvent, the petitioners will pay to the debtor all costs expenses damages occasion by the proceedings and attorneys fees
true
It shall refer to the order issued by the court evidence in the commencement of rehabilitation proceedings
commencement order
It shall refer to real or personal property of the debtor upon which a lien attaches
encumbered property
It shall refer to proceedings initiated by creditors
involuntary proceedings
It shall refer to a statutory or contractual claim or judicial charged on real or personal property that legally and titles a creditor to resort to set property for payment of the claim or debt security by such
lien
It shall refer to a lien on property, the possession of which has been transferred to a creditor or a representative or agent thereof
possessory lien
It shall refer to the 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 continue as a going concern that is immediately liquidated
rehabilitation
refer to the person or persons, natural or juridical, appointed as such by the court pursuant to this act and which shall be entrusted with such powers and duties as set forth herein
rehabilitation receiver
It is a type of rehabilitation that involves filing a petition before the regional trial court where in the rehabilitation of the business is under the supervision and control by the rehabilitation court
court supervised rehabilitation
Who files the petition for rehabilitation before the rehabilitation court in voluntary and involuntary court supervised rehabilitation
insolvent businessman; creditors
It is a type of rehabilitation that involves the filing before the regional trial court of rehabilitation plan which is already pre negotiated by the insolvent business letter and its creditors
prenegotiated rehabilitation
It is a type of rehabilitation that does not involve the filing before the regional trial court of any petition but the rehabilitation shall be governed by the outside agreement of the insolvent businessmen and its creditors. It will have the same effect as the other types of rehabilitation filed before the court as long as the requisites provided by fria are present
out-of-court restructuring or informal rehabilitation
Record vote for voluntary rehabilitation in case of partnership, corporation, and non stock corporation
majority of the partners; 2/3 of the outstanding capital stock; two-thirds of the members
Editor or group of creditors with the claim of the aggregate of whose claims is at least ____________ or at least ______ of the subscribed capital stock or partners contribution whichever is higher may initiate involuntary proceedings against the debtor by filing a petition for rehabilitation
1 million; 25%
When shall a rehabilitation preceding commence
open the issuance of the commencement order
Rehabilitation proceedings of an insolvent debtor shall commence of an issuance by the rehabilitation court of commencement order which shall include among others a _________________
stay order or suspension order
True or false. The suspension order prohibits the debtor from making any payment of its liabilities outstanding
true
Cases already pending appeal in the supreme court as of commencement date shall be suspended
false; When it is already in supreme court
True or false. Any criminal action against the individual debtor shall be suspended upon issuance of suspension order
false
What are the qualifications of a rehabilitation receiver
- ____________ of the philippines or a ___________ in the six months immediately preceding his nomination
- Of good moral character and with acknowledged integrity in partiality and independence
- Has the requisite knowledge of insolvency and other commercial loss
- Has no conflict of interest
citizen; president
True or false. Conflict of interest may be waived expressly or impliedly by a party who may be prejudiced thereby
true
The rehabilitation receiver may be removed at any time by the court either motu proprio or upon motion by any creditors holding more than ______ of the total obligations of the debtor on such grounds as the rules of procedure may provide
50%
True or false. Rehabilitation receiver is entitled to compensation
true
True or false. the rehabilitation plan shall be deemed rejected unless approved by all classes of creditors whose right are adversely modified or affected by the plan.
true
For purposes of this section the rehabilitation plan is deemed to have been approved by class of creditors if members of the said class holding more than _______ of the total claims of the said class vote in favor of the plant
50%
A creditor may file an objection to the rehabilitation plan within ________ from the receipt of notice from the court that the rehabilitation plan has been submitted for confirmation
20 days
The court shall have a maximum period of ______ from the date of filing to confirm the rehabilitation plan
1 year
Record creditors vote for approval of pre negotiated rehabilitation plan
endorsement or approval by creditors holding at least ______ of the liabilities of the debtor, including secured creditors holding more than _______; or endorsement or approval by the total secured claims of the debtor and unsecured creditors holding more than _______ of the total unsecured claims of the debtor
2/3; 50%; 50%
Minimum requirements of out of court or informal rehabilitation plants
- The debtor must agree to the above court or informal restructuring work out agreement or rehabilitation plan
- It must be approved by the creditors representing at least ______ of the secured obligations of the debtor
- It must be approved by creditors representing at least _______ of the unsecured obligations of the debtor and
- It must be approved by creditors holding at least ______ of the total liabilities, secured and unsecured, of the debtor
67%; 75%; 85%
Structuring or workout agreement or rehabilitation plan that is accrued pursuant to an informal workout framework referred to in this chapter shall have the same legal effect as confirmation of a plant under the section of fria
cram down effect
Number of nominees to the position of liquidator
three
Required creditors vote for petition for involuntary liquidation
three or more creditors the aggregate of hose claims is at least either ___________ or _______ of the subscribed share capital or partners contributions of the death or whichever is higher
1 million; 25%
Within _______ from his assumption into office, the liquidator shall prepare a preliminary registry of claims of secured and unsecured creditors
20 days
