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The Financial Rehabilitation and Insolvency Act of 2010 (“FRIA”)

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A.FRIA’s background and related rules - ( Financial Rehabilitation Rules of Procedure, Supreme
Court (FR Rules ), Rule 1, Sec. 1, Financial Liquidation and Suspension Rules of Procedure for
insolvent debtors, (FSLP, Rule 1, Sec. 1)

B. Purpose of the FRIA – Sec. 2, FRIA

C. What is insolvency?
- Definition under the FRIA , (Sec. 4, FR Rules)
- Is insolvency similar to Bankruptcy or Illiquidity?

D. Definition of terms:
- What are considered claims under the FRIA? – Chap. 1, Sec. 4 (c)

- Who are considered as debtors ? – Chap. 1, Secs. 4 (k), (m), (n) , (o)
- Difference between liabilities and lien – Chap 1, Sec. 4 (s), (t), (cc)
- Role of the Commissioner – FLSP Rules, Rule 3, Sec. 5

II
E. Definition & Nature of the various proceedings under the FRIA – Chap. 1, Sec. 3
- What is a rehabilitation? FRIA, Sec. 4 (gg)
- Court Supervised Rehabilitation: Voluntary and Involuntary Petitions ( Chap. II, Secs. 12 &13)
1) Aims of Rehabilitation
2) Court’s issuance of a Commencement Order: Duration and Effects -(Chap.II, Secs.15,16, 21)
3) Inclusion of a Stay or Suspension Order- ( Chap. II, Sec. 16 (q))

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4) Effects of a Suspension Order -(Chap. II Secs. 17, 19)
5) Cases where a Stay or Suspension Order does not apply - (Chap. II, Sec. 18)
6) Effectivity and Duration of a Commencement Order - (Chap. II, Sec. 21)
7) Factors to be considered by the Court to determine successful rehabilitation of Debtor [Chap
II, Sec 21 (a) to (g) ]
8) The Rehabilitation Plan and its contents – (Chap. 2, Secs. 62 -64, 65-73)

IV
9) The Rehabilitation Receiver:
a. Qualifications and Appointment – (Chap. II, Secs. 28, 29,30)
b. Role and functions – [Chap. ll, Sec. 17(a), Secs. 21(b),(d), Sec. 24, 31, 36,44]
c. Grounds for Removal of Rehabilitation Receiver – (Chap. 2, Sec. 32)
 10) What happens before and during the hearings? - (Chap. 2, Secs. 45, 22, 23, 24)
11) Creation of a Management Committee: Whys and Hows - (Chap.2, Sec. 36-38)
12) Creation of a Creditor’s Committee and its Role – (Chap. 2, Secs. 42-43)
13) Actions on the Petition – (Chap. 2, Sec. 22, 24,25, 26, 27)

V
14) The Various Claims
a. In general- Secs. 4(c), 16, 44-46
b. Secured Claims of Creditors- Secs. 60-61
c. Taxes – Sec. 19 and 62
d. Claims of Employees / Workers – Secs. 16, 56, 133
e. Claims not included – Sec. 23
15) Contracts: Confirmation and Avoidance- Secs. 57, 58 and 59
16) Termination of Proceedings- Secs. 74 and 75
a. Pre-negotiated Rehabilitation: FRIA, Secs. 76-82 and 92
b. Out of Court or Informal Restructuring Agreements / Rehabilitation: Secs. 83-89

VI
Liquidation:
1) Under the Civil Code - Arts. 2236, 2238, 2239, 2240
2) Insolvent Juridical Debtor:
a. Voluntary / Involuntary – FRIA, Chap. V, Secs. 90, 91
b. Conversion into Liquidation proceedings- FRIA, Chap.V, Sec. 93
3) Insolvent Individual Debtor:
a. Voluntary Liquidation by suspension of payments: FRIA,Chap V, Sec.94
b. Voluntary Liquidation by petition : FRIA, Sec. 103-104
c. Involuntary Liquidation: Processes Involved – FRIA Secs. 105-110
4) What is a liquidation order? – FRIA Secs. 112-113
5) The liquidator: Election, Qualifications, Powers – FRIA Secs. 115-122

VII
6) The liquidation Plan- FRIA Secs. 129-133
7) How claims are established -FRIA Secs. 112, 123-126
8) How claims are treated – FRIA, Secs. 113-114 & 123
9) Avoidance Proceedings – FRIA Secs. 127-128
10) Completion of liquidation – FRIA Secs. 134-135
Proceedings Ancillary to Other Insolvency or Rehabilitation processes:
1) Banks and other Financial Institutions Under Rehabilitation- FRIA,Chap.Secs. 137 -138
2) Cross border Insolvency Proceedings- FRIA, Chap. VIII, Secs. 139-142

F.Cases:
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1) Viva Shipping Lines vs. Keppel Philippines Mining, G.R. 177382, 2/17/16
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2) Rizal Commercial Banking Corp. vs. IAC, 320 SCRA 279
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3) Town and Country Enterprises Inc. vs. Quisumbing, 682 SCRA 128
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4) Metropolitan Waterworks vs. Daway and Maynilad Water Services, 432 SCRA 559
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5) Philippine Assets Growth Two Inc. & Planters Devt. Bank vs. Fastech Synergy Phils.
G.R. No. 206528, June 28, 2016
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6) Pryce Corporation vs. China Banking Corporation, 716 SCRA 207
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7) Consuelo Metal Corporation vs. Planters Devt. Bank & Maningas, 555 SCRA 465
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8) Yngzon vs. PNB, 678 SCRA 447