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4 (p));
Under Section 4, (p) of FRIA law, “Insolvent shall refer to the financial condition of a
debtor that is generally unable to pay its or his liabilities as they fall due in the
ordinary course of business or has liabilities that are greater than its or his assets.”
INVOLUNTARY
Creditors must have an aggregate claim of PhP1,000,000. or at least 25 % of the
subscribed capital stock or partner's contributions, whichever is higher provided
that:
there is no genuine issue of fact claim/s due
demandable payments have not been made for at least 60 days or
debtor has generally defaulted on obligations as they fall due; or
a creditor, other than petitioner/s, has initiated foreclosure proceedings
against the debtor that will prevent the debtor from paying its debts as they
fall due.
Pre-negotiated –
Pre-negotiated Rehabilitation Plan which has been endorsed or approved by creditors
holding at least two-thirds (2/3) of the total liabilities of the debtor, including:
- secured creditors holding more than fifty percent (50%) of the total secured
claims of the debtor
and unsecured creditors holding more than fifty percent (50%) of the total unsecured
claims of the debtor
Out of Court/Informal Rehabilitation –
- it must be approved by creditors representing at least sixty-seven percent (67%) of
the secured obligations of the debtor and it must be approved by creditors
representing at least seventy-five percent (75%) of the unsecured obligations of the
debtor
- it must be approved by creditors holding at least eighty-five percent (85%) of the
total liabilities, secured and unsecured, of the debtor.
d. (a) Administrative expenses shall refer to those reasonable and necessary expenses:
(1) incurred or arising from the filing of a petition under the provisions of this Act;
(2) arising from, or in connection with, the conduct of the proceedings under this Act,
including those incurred for the rehabilitation or liquidation of the debtor;
(3) incurred in the ordinary course of business of the debtor after the commencement
date;
(4) for the payment of new obligations obtained after the commencement date to
finance the rehabilitation of the debtor;
(5) incurred for the fees of the rehabilitation receiver or liquidator and of the
professionals engaged by them; and
(6) that are otherwise authorized or mandated under this Act or such other expenses as
may be allowed by the Supreme Court in its rules.