Download Corporate Rehabilitation in the Philippines PDF

TitleCorporate Rehabilitation in the Philippines
TagsDebt Securities (Finance) Pleading Lien Board Of Directors
File Size350.1 KB
Total Pages21
Document Text Contents
Page 1

Corporate Rehabilitation in the Philippines


Corporate rehabilitation, which is similar to Chapter 11

reorganization in the United States of America, is distinct and

separate from insolvency. Rehabilitation is intended to enable a

distressed corporation to gain a new lease on life, so to speak,

and to continue its business as a going concern. On the other

hand, insolvency is intended to close and liquidate an insolvent

corporation (please note that insolvency is also available to

individuals or natural persons, while rehabilitation is available

only to corporations, partnerships and associations).

With the increased media coverage these past months

regarding businesses undergoing corporate rehabilitation

(e.g., College Assurance Plan [CAP] andPacific Plans, Inc.

[PPI]), even the general public has started asking questions

regarding this legal option that is available to distressed

corporations.

Governing laws/Jurisdiction. – Jurisdiction over petitions for

corporate rehabilitation WAS vested in the Securities and

Exchange Commission (SEC) under Presidential Decree (“P.D.”)

No. 902-A, as amended by P.D. 1758 and P.D. 1799.

While Republic Act No. 8799 transferred this jurisdiction to

regular courts, P.D. 902-A remains to be the governing law on

corporate rehabilitations. The Rules of Procedure on Corporate

Rehabilitation (2008)superseded the Interim Rules of Procedure

on Corporate Rehabilitation as the governing rule, with

the Rules of Court applying suppletorily. The relevant

differences between the old and new rules are discussed here.

Issuance of “Stay Order”. – If the court is convinced that the

petition is sufficient in form and substance, it will issue a Stay

http://jlp-law.com/blog/corporate-rehabilitation-philippines/
http://www.law.cornell.edu/uscode/html/uscode11/usc_sup_01_11_10_11.html
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http://www.jlp-law.com/content.php?id=1317&subId=Rules%20of%20Court
http://jlp-law.com/blog/changes-in-the-rules-of-procedure-on-corporate-rehabilitation-provisions-applicable-to-all-proceedings/

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http://www.supremecourt.gov.ph/jurisprudence/1998/jan1998/124185_87.htm

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