Pre-Finals Review (FRIA, Banking Laws, AMLA) Flashcards
ABC holdings inc filed a petition for REHABILIATION
petition is sufficient in form & substance
court issued commencement order (CO)
Notice of the commencement order was published
RPC lending motion to dismiss on the ground that court did not acquire JD
Rule.
- Nature of Proceeding of FRIA: in rem
- Licarios v. Licarios
- JD over all persons affected by the proceeding shall be acquired upon publication of the (notice of commencement proceedings and not upon service of summons
Holding Inc whose assets are much less than its liabilities filed petition for LIQUIDATION
Court issued liquidation order
RPC is one of Holding’s creditors whose claim is secured by a REM
if RPC wants to foreclose the mortgage despite the issuance of the liquidation order, will the FC proceeding prosper?
No
sec 113 (e) of FRIA provides that one of the effects of a liquidation order is that there shall be no FC proceeding allowed for a period of 180 days.
James, OFW return home for good receive 2M by way of separation benefits from his foreign -Er
the amount was credited to Metrobank Peso savings account.
prior to the crediting of the separation benefits, the average balance of his asvings was 20k
can he be criminally charged for money laundering considering that 2M that was credited to his bank account is substantially disproportionate to the average daily balance?
No,
AMLA provides in sec. 3 on circumstances that are considered suspicious transactions such as;
- the amount involved is not commensurate with the business/financial capacity of the client
applying the law to the case, while it is true that the increase of James’ bank credit is not commensurate with his finacial capacity, this increase arose from an underlying legal or trade obligation or economic justification
Bank of Banilad was examined by representative of BSP
After a report was submitted by the examiners, the Monetary Board found that the bank is having liquidity problems
thus appointed Nathaniel as CONSERVATOR.
may the BoD of the Bank file a civil action for injunction w/ TRO against the MB on the ground that the bank was placed under CONSERVATORSHIP without due process or prior hearing?
LB: Banko Sentral Act sec. 29 par. 5
No
As a GR, the actions of the MB under sec 29 shall be final & executory and may not be RESTRAINED or SET ASIDE by the court
EXCEPT petition for certiorari
on the ground that the action taken was in excess of JD [or] grave abuse of discretion as to amount to lack or excess of JD
Upon report by officer of BSP, the MB placed Bank of Banilad under RECEIVERSHIP designating PDIC (phil deposit insurance corp) as receiver
may the BoD question the act of the MB as improper on the ground that the bank should be first placed under CONSERVATORSHIP?
No
the designation of a CONSERVATOR is NOT A PRECONDITION to the designation of a RECEIVER.
Nathaniel is the president of Banilad Bank
He subscribed & paid 2M worth of shores
He has also a time deposit of 1M
Since he is constructing an apartment bldg for his retirement, he wrote to the BoD of the bank manifesting his intention to apply for a 5M loan.
Majority of the BoD approved Nathaniel’s 5M
Can James a director who did not vote for the approval question the board’s action?
Yes, James can validly question the board action
LB found: sec 36
GR: no director or officer of any bank shall directly or indirectly… borrow from such bank…
XPN: written approval of the Maj of BoD of the bank excluding the director concerned…
PROVIDED, required approval shall be entered upon the records of the bank [and] copy shall be transmitted to the appropriate supervising & examining department of the BSP
PROVIDED FURTHER, the amount must not exceed the unencumbered deposit [and] book value of paid-in contribution
here, it is a total of 3M which exceeds the Ceiling Requirement. while the 3M is lawful, the excess of 2M is unlawful
Holding Inc filed for REHABILITATION
court issued Commencement Order. Notice of CO & Suspension order were duly published as required by law
Notwithstanding the pendency of the REHABILIATION PROCEEDINGS, RPC corp, a creditor filed a collection case against Nathaniel as SURETY for the Holding Inc’s debt
May Nathaniel invoke Stay/Suspension order & move for the dismissal against him?
No, Nathaniel cannot invoke SO
LB: FRIA, sec 16
GR: a suspension order shall suspend all actions or proceedings for the ENFORCEMENT OF CLAIMS against the debtor
LB: 18 (c)
XPN: the SO shall not apply to enforcement of claims against sureties & other persons solidarily liable w/ the debtor
Banilad Bank has a net worth of 50M
Nathaniel wants to apply for a 20M loan
James, the new operations head of the bank asks you if the bank should grant the loan.
What is your advice
LB: GBL sec 35 on Limit on Loans
The total amount of laons, credit accommodations, and guarantees that may be extended by a bank to any person or entity shall at no time exceed 20% of the net worth of such bank unless the MB provide otherwise for reasons of national interest
here, 20% of 50M is 10M and Nathaniel wishes to apply for a loan of 20M which is 40% of 50M
Holding Inc. petition for REHABILITATION.
issued Commencement Order & appointed Nathaniel as rehabilitiation receiver
Rehab Plan of Nathaniel was rejeceted by creditors representing more than 60% of the total liabilities of Holding Inc
May the rehabilitation court still approve the rehab plan?
Yes, the rehab court may approve the rehab plan
LB: FRIA sec 64
the RP shall be deemed rejected unless approved by all classes of creditors whose rights are adversely modified/affected by the RP
Notwithstanding the rejection of the rehab plan, the court may confirm the rehab plan if all the circumstances are present
1. RP complies with requirements specified in FRIA
2. rehab receiver (RR) recommends the confirmation of the RP
3. shareholders, owners, or partners of the juridical debtor lose [at least] their controlling interest as a result of the RP
4. RP would likely provide the objecting class creditors w/ compensation which has a net present value greater than that which they would have received if the Debtor were under LIQUIDATION
the MB placed Banilad Bank under CONSERVATORSHIP with Nathaniel as conservator.
8 months from appointment, he submitted his report that it is highly improbable for the bank to continue in business without substantial loss to its depositor/creditors.
What may the MB do under this cirumstance?
LB: CBA (Central Bank Act) Sec 30
the MB may now based on the report on the ground that continued operations would likely result to probable losses to its depositors/creditors designate a receiver for receivership proceedings.
The authority of the MB to summarily & without need of hearing forbid the bank from doing business in the Philippines
MB can convert the conservatorship proceeding into liquidation proceeding appointing PDIC as liquidator
addicted to online gambling, james a filipino & resident filed for LIQUIDATION
his gambling debts amounted to 2M while he earns LESS THAN 25k
court issued liquidation order duly published.
adrian one of jame’s creditor filed a motion to dismiss on the ground that it failed to allege any of the acts of insolvency provided in the law.
should the petition for dismissal be granted on the gruond by adrian?
No,
LB: FRIA sec 103
there are coluntary & involuntary liquidation
Voluntary
an individual debtor whose properties are not sufficient to cover his liabilities [and] owing debts exceeding 500K
may apply to be discharged from his debts & liabilities by filing a verified petition with the court which has resided for 6 months prior filing of such petition
He shall attach to his petition a schedule of debts & liabilities [and] an inventory of assets. THE FILING OF SUCH PEITTION SHALL BE AN ACT OF INSOLVENCY
Here, acts of insolvency is irrelevant as the case illustrates a voluntary act of liquidation.
Nathaniel a Canadian Citizen foresees the impossibility of his meeting his domestic obligation when they fall due.
Despite his assets being more than his total liabilities, he asks you if he can file a petition for suspension of payments under FRIA.
what will you tell him?
LB: FRIA sec. 94
an individual debtor who possession sufficient property to cvoer all his debts but foreseeing the impossibility of meeting them when they fall due, may file a verified petition that he be declared in the STATE OF SUSPENSION of payments by the court in which he resides for 6 months prior the petition.
not applicable to foreign nationals only RC of Phil??
attaching therewith
- schedule of debts & liabilities
- inventory of assets
- proposed agreement with his creditors
The articles of incorporation of banilad bank provides that it shall have 10 members of the BoD
30% of the voting stock of the bank is held by Malaysian stockholder; namely A B C
may the 3 malaysians be elected as members of the BoD of the bnka?
sec, 7 RA 7211 of banking laws of the phil provide that
Non-Filipino citizens may become members of the BoD of a bank to the extent of the foreign participation in the equity of the said bank
Here the equity held by foreign directors are 30% which coincides with the 3 foreign directors of the bank
A B C D E with 5 more friends want to form a NON-STOCK corp for the purpose of operating a BANK
they want to engage your services in drafting the articles of incorporation, by-laws of the non-stock corp as well as the filing/submission/processing of these documents
will you accept the engagement for this specific work ?
No
the MB may authorize the organization of a bank subject to the following conditions
- entity is a STOCK corporation
- its funds are obtained from the public
- that the minimum capital requirements prescribed by the MB for each category are satisfied
here, it is blatantly clear that the organization of a bank cannot be had under current philippine laws
Nathaniel has a peso savings & current account with metrobank
he is criminally charged for violation of RA 3019 (anti-graft & practices act) for receiving bribes from custom brokers.
while case is pending in court, the state prosecutor filed a motion for the issuance of a subpoena to the bank for production of records of Nathan’s bank deposit account
Objected to arguing that only thru a written consent of the depositor can this be done.
how will you grant the prosecutions motion
LB: bank secrecy act
grant the motion
GR: all deposits of whatever nature with banks…are hereby considered as of an absolute confidential nature [and] may not be examined, inquired, or looked into by any person, gov’t official, bureau or office
XPN: can be [eil] into upon
- **written permission of the depositor
- in case of impeachment, or
- upon order of a competent court in cases of **BRIBERY or DERILICATION of public officials
- …
Here,
