Category Archives: Corporate & Investments

Involuntary Court-Supervised Rehabilitation Proceedings against Insolvent Juridical Debtors

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Involuntary court-supervised rehabilitation proceedings, as opposed to voluntary court-supervised proceedings, is initiated by the creditors. This is provided under Republic Act No. 10142, also known as the Financial Rehabilitation and Insolvency Act (FRIA) of 2010, as fleshed out in the Financial Rehabilitation Rules of Procedure (2013) or “FR Rules” (A.M. 12-12-11-SC).

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Court Assistance to Implement or Annul the Out-of-Court Rehabilitation Proceeding or the Standstill Period

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The court may assist in the execution or implementation of the standstill agreement or the Out-of-Court or Informal Restructuring Agreements or Rehabilitation Plan (OCRA) by issuing a writ of execution to enforce its terms. Nevertheless, the court has the power to provide any other form of additional assistance as may be necessary to execute or implement the standstill agreement or the OCRA, including the award of damages properly pleaded and proved, and to protect the interests of the creditors, the debtor, and other interested parties.

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Virtual Currency (VC) Exchanges in the Philippines: Summary of Guidelines

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A virtual currency exchange (VC exchange) refers to any entity that offers services or engages in activities that provide facility for the conversion or exchange of fiat currency to virtual currency (VC) or vice versa. Before a VC exchange can operate or do business in the Philippines, it must obtain a Certificate of Registration (COR) to operate as a remittance and transfer company (RTC).

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Avoidance Proceedings in Court-Supervised Rehabilitation for Juridical Debtors

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Any transaction occurring prior to commencement date (the date on which the court issues the Commencement Order) entered into by the debtor or involving its funds or assets may be rescinded or declared null and void on the ground that the same was executed with intent to defraud a creditor or creditors or which constitute undue preference of creditors. This is provided in court-supervised rehabilitation proceedings [see Court-Supervised Rehabilitation] under Republic Act No. 10142, also known as the “Financial Rehabilitation and Insolvency Act (FRIA) of 2010“.

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Out-of-Court or Informal Restructuring Agreements or Rehabilitation Plans (OCRA)

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 An out-of-court or informal restructuring agreement or Rehabilitation Plan (OCRA) that meets the minimum requirements is recognized as consistent with the objectives of Republic Act No. 10142, also known as the “Financial Rehabilitation and Insolvency Act (FRIA) of 2010“. Under R.A. 10142, rehabilitation proceedings may be: (a) Out-of-court or informal restructuring agreements or rehabilitation plans; (b) pre-negotiated rehabilitation; (b) court-supervised rehabilitation proceedings.

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Pre-Negotiated Rehabilitation under the Financial Rehabilitation and Insolvency Act (FRIA) of 2010

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Rehabilitation refers 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. Under the “Financial Rehabilitation and Insolvency Act (FRIA) of 2010” (Republic Act No. 10142), rehabilitation proceedings may be: (a) Pre-negotiated rehabilitation; (b) Out-of-court or informal restructuring agreements or rehabilitation plans; or (c) Court-supervised rehabilitation proceedings.

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