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.
The petition for court assistance to execute or implement, or for the annulment of either the standstill agreement or the OCRA may be filed with the Regional Trial Court having jurisdiction over the place in which the insolvent debtor resides or has its principal place of business.
PETITION TO EXECUTE OR IMPLEMENT
An application for court assistance to execute or implement a standstill agreement or an OCRA may be filed by the insolvent debtor and/or creditor, as the case may be, and shall be in the form of a petition which contains, as a minimum, the following:
- 1. the identity of the debtor, its principal business of activity/ies, and its principal place of business;
- 2. if the petition is filed by the creditor, the identity of the creditor and its principal place of business;
- 3. the identity and addresses of the party/ies against whom the assistance is sought;
- 4. a statement of the dates the standstill agreement or the OCRA was executed and became effective;
- 5. an allegation that the requisite creditor approval for a standstill agreement or for an OCRA has been obtained;
- 6. an allegation that the notice of the standstill agreement or the OCRA has been duly published;
- 7. The salient provisions of the standstill agreement or the OCRA, including the provisions sought to be enforced; and
- 8. the specific form of assistance or relief sought.
A petition for court assistance shall be accompanied by a copy of the standstill agreement or the OCRA.
PETITION TO ANNUL
Vitiation of consent due to fraud, intimidation, or violence may be raised as a ground to annul the standstill agreement or the OCRA if committed against such number of creditors required for the approval of the standstill agreement or OCRA, as the case may be.
The petition shall allege, as a minimum, the following:
- 1. the identity of the debtor, its principal business or activity/ies, and its principal place of business; and
- 2. the ground for the petition.
The petition shall be accompanied by a copy of the standstill agreement or the OCRA and the amendments/modifications, if any, and shall be filed not later than 30 days from the effectivity thereof.
SERVICE OF SUMMONS
Upon the filing of the petition, the court shall immediately issue and cause to be served the corresponding summons to the respondents within 5 days from receipt of the petition.
The summons shall be accompanied with a copy of the petition, with all its attachments, and shall be served on all the person/s indicated as respondents.
The summons shall direct the respondent to file a comment and/or opposition to the petition within a non-extendible period of 5 days from receipt of the summons.
The summons, orders and other court processes may be served by the sheriff, his deputy or other proper court officer or, for justifiable reasons, by the counsel or representative of the petitioner, or any suitable person authorized or deputized by the court issuing the summons. Any private person who is authorized or deputized by the court to serve summons, orders and other court processes shall, for that purpose, be considered an officer of the court.
Service of summons to a respondent residing in the Philippines shall be made in person or by substituted service, in accordance with the Rules of Court.
Should either personal or substituted service fail, summons may be served by publication in a manner the court deems appropriate under the circumstances. In the case of juridical entities, summons by publication shall be done by indicating the names of its officers or its duly authorized representative.
Service of summons to a respondent not residing in the Philippines shall be effected out of the Philippines through any of the following means:
- By personal service coursed through the appropriate court in the foreign country, with the assistance of the Department of Foreign Affairs;
- By publication once in a newspaper of general circulation in the country where the respondent may be found and by serving a copy of the summons and the court order by registered mail at the last known address of the respondent;
- By facsimile or any recognized electronic means that could generate proof of service; or
- By such other means as the court may in its discretion direct.
COMMENT OR OPPOSITION
The respondent shall file a verified comment or opposition to the petition, together with supporting affidavits and documents, within 5 days from receipt of the summons and ensuring receipt thereof by the petitioner and the court not less than 3 days before the date of the summary hearing.
In an action for court assistance, a respondent may raise the defense that the standstill agreement or the OCRA is void for failure to comply with the pertinent requirements. A respondent may raise the invalidity of the standstill agreement or the OCRA on the ground of vitiation of consent only if it affects such number of creditors required for the approval of the standstill agreement of the OCRA, as the case may be.
The failure to raise either defense shall constitute as waiver and preclude the respondent from filing a separate petition to annul the standstill agreement or the OCRA.
COURT ORDER ON PETITION
On the basis of the allegations of the petition and the comment or opposition, and their supporting documents, the court shall determine whether there is a genuine issue of material facts. In case the respondent fails to file a comment or opposition the petition, the court may conduct clarificatory hearings.
If the court determines that there is no genuine issue of material fact, the court shall rule whether the petition shall be granted. The court shall issue the order within 5 days from receipt of the comment or opposition.
If the court determines that there exists a genuine issue of material facts, it shall conduct a summary hearing not later than 20 days from the filing of the petition.
The 120-day standstill period shall continue to run during the pendency of an action involving a standstill agreement. Upon the finality of the decision, the parties shall have the remaining balance of the period to enforce the decision, which in any case shall not be less than 60 days.
The court shall render judgment which shall be not later than 60 days from the filing of the petition.
REVIEW OF DECISION
The judgment in an action to implement or enforce a standstill agreement shall be final and immediately executory.
The judgment in any action involving the OCRA shall be final within 10 days from receipt of the decision and is immediately executory.
A judgment of the court under may be elevated to the Court of Appeals under Rule 65 of the Rules of Court.
A final judgment shall be without prejudice to the parties availing of the other modes of rehabilitation.
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