CPARWiM$CHOOLBFTIIEPNILIPPINES

REGULATORY FRAMEWORK FOR BUSINESS TRANSACTIONS

COVERAGE Banking Lawn

A. Ir AolvancY Law
o. Dohmteon of lnoolvoncV
b uspensionn of Payments
c, Voluntary Insolvency
d. Involuntary Insolvency
B. Corporate RohabiDtabon
a. DoNnlbon of Term
b Stay Order
0. Receiver
d. RohabilitaGon Plan
o. Contents of Pot&ion
fa her r Types of RohabiDtation
C. Securities RegulationCode
a indss of Securities
b. Protoctaon of investors
c. Private tender offer
d. Insider trading
o ECC Circulars and Issuances
f. Code of Corporate Governance
g. Filing of General Information Sheet
hf dangg of AuditedFinancial Statements
D. Cooperatives
a. Organlmtlon and Registratson of CooporaUvos
b. Administration
c. Responsibilettes, Rights and Privileges of Cooperatives
Ca itol l
pr perty y of Funds
au it, , Inquiry and Member.s Right to Examine
g. Allocation and Distribution of Funds
hy es s and Categories of Cooperatives
9. Merger and Consolidations of CooperaUves
j. Dissolution of Cooperatives
E. Intellectual Property Law (exceptprovisions under Part 1: Intellectual Property Office)
a. The Law on Patents
th e Law on Trademark. Service Marks andTrade Names
c. The Law on Copyright
DirecHon: Read and select me best answer for We followingquestions.____

I. insolvency Law for Individual Debtor ( R.A. No. 10142 akn Financial Rehabilitation and Insolvcocy Act
(FRIA) of 2010)

a Definition of Insolvency

Insolvency shall refer to (I ) the financial condition of a dcbk,r that is generally unable to pay its or his
liabilities as they fall due ill the ordinary course of business or (2) financial condition of a debtor when he
has liabilities that are greater than its or his assets.

b. Procedures for Suspension of Pa)'m€ots by an insolvent Individual Debtor

i. Filing of Petition for Declaratioo of Statcmeot of Suspension of Payments - An individual

debtor who possessing sufl}cicnt property to cover all his debts but foreseeing the impossibility of
meeting them when they respectively f31I duo, may file a verified petition that he be dalarcd in
the state of suspension of payments by the court of the province or city in whi he has resided
for six (6) months prior to the filing of his petition, Ho shall attach to his petition as a Minimum:
Ca) a schedule of debu and liabilities; (b) an inventory of assets; and Cc) a proposed agreement
with his creditors.

ii' ActioP by the Coon on the Peti tfoo - If the court finds the petition sufficient m &rm and
substance, it shall. wxthm five (5) overlongdays from the filing of the petition, issue an :

I. ling a meeting of all the cars named m me schedule of debts and liabdsGsa such
tone not less than flftcen (15) days nor mom than forty (40) days horn the date of such
Wder and designators the date. tune and place of the mectmg;
2. Directlng such creditors to prepare and present wrlttcn cvxdcnu of then cAauns before the
scheduled creditors' mctml

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 XXI1.

uiii. G 0-
Parent shall refer to a r,omcration which has coDtr€.1 over another corporation either directly
or indirectly through one or more intermediaries.
Party tothe proceedings shall refer to the debtor, a creditor, the unsecured creditors
committee, a stakeholder, a party with an ownership interest in property held by the
xxiv. debtor, a secured creditor, the rehabilitation receive,, liquidator or any other juridical or
natural person who stands to be benefited or injured by the outcome of the proceedings and
XXV.
whose notice of appearance is
accepted by the court.
nvi. Possessory lieu shall refer toa lien on property, the possession of which has been transferred to
.* a creditor or a representative or agent thereof.
XXVII.
Proceedings shall refer to judicial proceedings commenced by the court's acceptance of a
petition filed under this Act.
xxviii. Property of others shall refer to property held by the debtor in which other persons have an
ownership interest.
Publication notice shall refer to notice through publication in a newspaper of general
circulation in the Philippines on a business day for two(2) consecutive weeks.
xxix. Rehabilitation 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 continues as a going concern than if it is immediately liquidated.
Rehabilitation receiver shall 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 Plan shall refer to a plan by which the financial!well~be` and viability of an
insolvent debtor can be restored Using various means including, but not limited to, debt
xxxi. forgiveness, debt rescheduling, organization or quas reorganization, dacian en page, debt-
XXXiI.
9 . 0 equi conversion and sale of the business(or parts of it) as a going concern, or setting-up of
XXUH. new business entity as prescribed in Section 62 hereof, or other similar arrangements as
may be approved by the court or creditors. mg
xxxiv. Secured claim shall refer to a claim that is secured by alien.
Secured creditor shall refer to a c }f or with a secured
xxxv. claim.
Secured party shall refer to a Sect,ed creditor or the agent or representative of such secured
XXXVI. creditor.
Securities market participant $hail refer to a broker, dealer, underwriter, transfer agent or other
.* juridicalpersons transacting securitles in the capital market.
XXXVII. Stakeholder shall refer, in addition m to a holder of shares of a corporation, to a member of a
XXXI'i{i. nonstock corporation or associatesorg a partner in a partnership.
XXXIX. Subsidiary shall refer to a corpore€on more than arty percent (SO%) of Wa voting stock of
XI. which is owned or controlled directly or indirectly through one or more intermediaries by
another corporation, which thereby becomes its parent corporation.
Unsecured claim shall refer to a claim that is not secured by a lien.
Unsecured creditor shall refer to a creditor wi an unsecured claim.
Voluntary proceedings shell refer to proceedings initiated by the
deb(0r.
VotWg creditor shall refer to a cmdltor that is a member of a class of creditors, the consent of
which is necessary for tlxe approx' of a Rehabilitation Plan under this Act.

b. Court-Supervised Rehabilitation

i. Voluntary Court-Supervised Rehabilitation (Initiated by Insolvent Debtor)

I. Required Vote for Voluntar!Rehabilitation
op n n approved by the Owner in case of a sole proprietorship, or
b. By a majority of the partners in case of a partnership, or,
c. On case of a corporation, by a major vote of the board of directors or
trustees and authorized by the vote of the stockholders representing at least
two thirds
(273) of the outstandingcapital stock, or
di n case of not\stock corporahon, by the vote of at least two-thirds (213) of the
members, in a member's meetingduly called for the purpose.

gr ndson s for Court-SnpervivWRthabilita6on

ac s e debtor is geaeBly v/xeblc to pay its or his liabilities as they fall due in the
ordinary colxrse of business
 `

th e debtor has liablliiies that are Feater than Its or his assets'

3. Minimum AUegattona forVo!antaO‘ RebxbiGtatioa

ac s e petition sha!I kc verified to establish the insolvency of the debtor.
th e petition shatI be verified to esm`oUwh the viabilityof the rehabilitation of
the
,insolvent debtor.

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