{"id":4367,"date":"2020-02-15T01:04:00","date_gmt":"2020-02-14T17:04:00","guid":{"rendered":"https:\/\/pnl-law.com\/blog\/?p=4367"},"modified":"2020-06-10T19:01:56","modified_gmt":"2020-06-10T11:01:56","slug":"juridical-debtors-under-the-financial-rehabilitation-and-insolvency-act-fria-of-2010","status":"publish","type":"post","link":"https:\/\/pnl-law.com\/blog\/juridical-debtors-under-the-financial-rehabilitation-and-insolvency-act-fria-of-2010\/","title":{"rendered":"Juridical Debtors under the Financial Rehabilitation and Insolvency Act (FRIA) of 2010"},"content":{"rendered":"\n<p>Insolvent debtors, both individual and juridical, are covered by Republic Act No. 10142 (&#8220;<a href=\"https:\/\/pnl-law.com\/blog\/financial-rehabilitation-and-insolvency-act-fria-of-2010-republic-act-no-10142-full-text\/\">Financial Rehabilitation and Insolvency Act (FRIA) of 2010<\/a>&#8220;). Individual debtor refers to a natural person who is a resident and citizen of the Philippines that has become insolvent, while juridical debtor refers to:<\/p>\n\n\n\n<!--more-->\n\n\n\n<div class=\"wp-block-image is-style-rounded\"><figure class=\"aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"837\" height=\"628\" src=\"https:\/\/pnl-law.com\/blog\/wp-content\/uploads\/2020\/06\/Juridical-Entities-Covered-by-the-Financial-Rehabilitation-and-Insolvency-Act-FRIA-of-2010-.png\" alt=\"Juridical Entities Covered by the Financial Rehabilitation and Insolvency Act (FRIA) of 2010\" class=\"wp-image-8232\"\/><\/figure><\/div>\n\n\n\n<ul class=\"wp-block-list\"><li>a <strong>sole proprietorship<\/strong> duly registered with the Department of Trade and Industry (DTI);&nbsp;<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li>a <strong>partnership<\/strong> duly registered with the Securities and Exchange Commission (SEC); or<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li>a <strong>corporation<\/strong> duly organized and existing under Philippine laws.<\/li><\/ul>\n\n\n\n<p>However, the following are <strong>not<\/strong> considered juridical debtors under R.A. 10142:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Banks<\/strong> &#8211; any duly licensed bank or quasi-bank that is potentially or actually subject to conservatorship, receivership or liquidation proceedings under the New Central Bank Act (Republic Act No. 7653) or successor legislation.<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Insurance companies<\/strong> &#8211; companies that are potentially or actually subject to insolvency proceedings under the Insurance Code (Presidential Decree No. 1460) or successor legislation.<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Pre-need companies<\/strong> &#8211; any corporation authorized\/licensed to sell or offer to sell pre-need plans.<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li>National and local <strong>government<\/strong> agencies or units.&nbsp;<\/li><\/ul>\n\n\n\n<p>Government financial institutions (GFIs) other than banks, and government-owned or -controlled corporations (GOCCs) are covered by R.A. 10142, unless their specific charter provides otherwise.<\/p>\n\n\n\n<p>[See proceedings for juridical debtors: <a href=\"https:\/\/pnl-law.com\/blog\/liquidation-of-insolvent-juridical-debtors-under-the-financial-rehabilitation-and-insolvency-act-fria-of-2010\/\">Liquidation<\/a>; <a href=\"https:\/\/pnl-law.com\/blog\/out-of-court-or-informal-restructuring-agreements-or-rehabilitation-plans\/\">Out-of-court or informal restructuring agreements or rehabilitation plans<\/a>; <a href=\"https:\/\/pnl-law.com\/blog\/pre-negotiated-rehabilitation-under-the-financial-rehabilitation-and-insolvency-act-fria-of-2010\/\">Pre-negotiated rehabilitation<\/a>; and, <a href=\"https:\/\/pnl-law.com\/blog\/court-supervised-rehabilitation-proceedings-under-the-financial-rehabilitation-and-insolvency-act-fria-of-2010\/\">Court-supervised rehabilitation proceedings<\/a>]<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>SUBSTANTIVE AND PROCEDURAL CONSOLIDATION<\/strong><\/h2>\n\n\n\n<p>Each juridical entity shall be considered as a separate entity. Under these proceedings, the assets and liabilities of a <a href=\"https:\/\/pnl-law.com\/blog\/juridical-debtors-under-the-financial-rehabilitation-and-insolvency-act-fria-of-2010\/\">debtor<\/a> may not be commingled or aggregated with those of another, unless the latter is a related enterprise that is owned or controlled directly or indirectly by the same interests.<\/p>\n\n\n\n<p>The commingling or aggregation of assets and liabilities of the <a href=\"https:\/\/pnl-law.com\/blog\/juridical-debtors-under-the-financial-rehabilitation-and-insolvency-act-fria-of-2010\/\">debtor<\/a> with those of a related enterprise may only be allowed where:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>(a) there was commingling in fact of assets and liabilities of the debtor and the related enterprise prior to the commencement of the proceedings;<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li>(b) the <a href=\"https:\/\/pnl-law.com\/blog\/juridical-debtors-under-the-financial-rehabilitation-and-insolvency-act-fria-of-2010\/\">debtor<\/a> and the related enterprise have common creditors and it will be more convenient to treat them together rather than separately;<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li>(c) the related enterprise voluntarily accedes to join the <a href=\"https:\/\/pnl-law.com\/blog\/juridical-debtors-under-the-financial-rehabilitation-and-insolvency-act-fria-of-2010\/\">debtor<\/a> as party petitioner and to commingle its assets and liabilities with the debtor\u2019s; and<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li>(d) The consolidation of assets and liabilities of the <a href=\"https:\/\/pnl-law.com\/blog\/juridical-debtors-under-the-financial-rehabilitation-and-insolvency-act-fria-of-2010\/\">debtor<\/a> and the related enterprise is beneficial to all concerned and promotes the objectives of rehabilitation.<\/li><\/ul>\n\n\n\n<p>The court may join other entities affiliated with the <a href=\"https:\/\/pnl-law.com\/blog\/juridical-debtors-under-the-financial-rehabilitation-and-insolvency-act-fria-of-2010\/\">debtor<\/a> as parties pursuant to the rules of procedure promulgated by the Supreme Court.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>&nbsp;<\/td><td>COURT-SUPERVISED REHABILITATION:<\/td><td>&nbsp;<\/td><\/tr><tr><td>&nbsp;<\/td><td>*&nbsp;<a href=\"https:\/\/pnl-law.com\/blog\/initiation-of-court-supervised-rehabilitation-proceedings-for-or-against-juridical-debtors\/\">Voluntary Court-Supervised Rehabilitation Proceedings for Insolvent Juridical Debtors<\/a><\/td><td>*&nbsp;<a href=\"https:\/\/pnl-law.com\/blog\/involuntary-court-supervised-rehabilitation-proceedings-against-insolvent-juridical-debtors\/\">Involuntary Court-Supervised Rehabilitation Proceedings against Insolvent Juridical Debtors<\/a><\/td><\/tr><tr><td>&nbsp;<\/td><td>PROVISIONS COMMON TO BOTH:<\/td><td>&nbsp;<\/td><\/tr><tr><td>&nbsp;<\/td><td>*&nbsp;<a href=\"https:\/\/pnl-law.com\/blog\/court-supervised-rehabilitation-proceedings-under-the-financial-rehabilitation-and-insolvency-act-fria-of-2010\/\">Action of Court and Proceedings<\/a><\/td><td>*&nbsp;<a href=\"https:\/\/pnl-law.com\/blog\/rehabilitation-plan-in-court-supervised-rehabilitation-proceedings\/\">The Rehabilitation Plan<\/a><\/td><\/tr><tr><td>&nbsp;<\/td><td>*&nbsp;<a href=\"https:\/\/pnl-law.com\/blog\/commencement-order-in-court-supervised-rehabilitation-proceedings\/\">The Commencement Order<\/a><\/td><td>*&nbsp;<a href=\"https:\/\/pnl-law.com\/blog\/the-rehabilitation-receiver-management-committee-and-creditors-committee-in-corporate-rehabilitation-proceedings\/\">The Rehabilitation Receiver<\/a><\/td><\/tr><tr><td>&nbsp;<\/td><td>*&nbsp;<a href=\"https:\/\/pnl-law.com\/blog\/stay-order-or-suspension-order-in-court-supervised-rehabilitation-proceedings\/\">Stay or Suspension Order<\/a><\/td><td>*&nbsp;<a href=\"https:\/\/pnl-law.com\/blog\/management-committee-in-court-supervised-rehabilitation-in-the-philippines\/\">The Management Committee<\/a><\/td><\/tr><tr><td>&nbsp;<\/td><td>*&nbsp;<a href=\"https:\/\/pnl-law.com\/blog\/determination-of-claims-in-court-supervised-financial-rehabilitation-in-the-philippines\/\">Determination of claims<\/a><\/td><td>*&nbsp;<a href=\"https:\/\/pnl-law.com\/blog\/creditors-committee-in-court-supervised-rehabilitation-in-the-philippines\/\">The Creditor\u2019s Committee<\/a><\/td><\/tr><tr><td>&nbsp;<\/td><td>*&nbsp;<a href=\"https:\/\/pnl-law.com\/blog\/secured-creditors-in-court-supervised-rehabilitation-proceedings\/\">Treatment of secured creditors<\/a><\/td><td>*&nbsp;<a href=\"https:\/\/pnl-law.com\/blog\/avoidance-proceedings-in-court-supervised-rehabilitation-proceedings-for-juridical-persons\/\">Avoidance proceedings<\/a><\/td><\/tr><tr><td>&nbsp;<\/td><td>*&nbsp;<a href=\"https:\/\/pnl-law.com\/blog\/termination-of-court-supervised-rehabilitation-proceedings\/\">Termination of proceedings<\/a><\/td><td>&nbsp;<\/td><\/tr><\/tbody><\/table><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>Insolvent debtors, both individual and juridical, are covered by Republic Act No. 10142 (&#8220;Financial Rehabilitation and Insolvency Act (FRIA) of 2010&#8220;). Individual debtor refers to a natural person who is a resident and citizen of the Philippines that has become insolvent, while juridical debtor refers to:<\/p>\n","protected":false},"author":7,"featured_media":8232,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1361],"tags":[534,535,1085,1052,1051,1057,537,1086,536,1053],"class_list":["post-4367","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-corporate-law","tag-business","tag-corporate-rehabilitation","tag-court-supervised-rehabilitation","tag-financial-rehabilitation","tag-financial-rehabilitation-and-insolvency-act-fria-of-2010","tag-financial-restructuring","tag-insolvency","tag-pre-negotiated-rehabilitation","tag-rehabilitation","tag-republic-act-no-10142"],"_links":{"self":[{"href":"https:\/\/pnl-law.com\/blog\/wp-json\/wp\/v2\/posts\/4367","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/pnl-law.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/pnl-law.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/pnl-law.com\/blog\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/pnl-law.com\/blog\/wp-json\/wp\/v2\/comments?post=4367"}],"version-history":[{"count":5,"href":"https:\/\/pnl-law.com\/blog\/wp-json\/wp\/v2\/posts\/4367\/revisions"}],"predecessor-version":[{"id":8233,"href":"https:\/\/pnl-law.com\/blog\/wp-json\/wp\/v2\/posts\/4367\/revisions\/8233"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/pnl-law.com\/blog\/wp-json\/wp\/v2\/media\/8232"}],"wp:attachment":[{"href":"https:\/\/pnl-law.com\/blog\/wp-json\/wp\/v2\/media?parent=4367"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/pnl-law.com\/blog\/wp-json\/wp\/v2\/categories?post=4367"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/pnl-law.com\/blog\/wp-json\/wp\/v2\/tags?post=4367"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}