NOTES

COURT- SUPERVISED
REHABILITATION
INITIAL PROCEEDING

FLOW CHART

a)

COURT- SUPERVISED

RULE

CHARMAINE P. MEJIA
SPECIAL
PROCEEDING
|
FINANCIAL
REHABILITATION
AND
INSOLVENCY
ACT OF 2010
REHABILITATION

VOLUNTARY
PROCEEDING
(Debtor - Initiated)

INVOLUNTARY
PROCEEDING
(Creditor - Initiated)

Section 12

A. Voluntary Proceeding
File verified Petition for
Rehabilitation with the
Court (RTC)

1. Petition to initiate voluntary proceedings

filed by debtor, approved by:

i.
ii.
iii.

iv.

Sole Proprietorship by the

owner

Is the Petition Sufficient

in Substance and Form?

Partnership by a majority of the

partners

NO

Stock Corporation by a
majority vote of the board of
directors and authorized by the
vote of the stockholders
representing at least 2/3 of the
outstanding capital stock in a
stockholders meeting duly called
for the purpose

YES
IF PETITION IS SUFFICIENT
Court shall issue within
5working days from the
filing of the petition:
COMMENCEMENT ORDER

Non-Stock Corporation by a
majority vote of the board of
trustees authorized by the vote
of at least 2/3 of the members, in
a members meeting duly called
for the purpose.

Note: A group of debtors may jointly file a

petition for rehabilitation, when one or more
of its members foresee the impossibility of
meeting debts when they respectively fall
due, and the financial distress would likely
adversely affect the financial condition
and/or operations of other members of the
group and/or the participation of the other
members of the group is essential under the
terms and conditions of the proposed

IF PETITION IS DEFFICIENT
Court may, in its discretion
give the petitioner/s a
reasonable time within which
to amend/supplement or to
submit documents

COMMENCEMENT OF
REHABILITATION
PROCEEDINGS

Direct BIR to file

Registry
and
serve on the
of
Claims

Direct all
Waiver of
Use, preservation
Direct the
creditors to
taxes and
and disposal of
publication of
debtor
its
file
their
fees
due
to
assets and
w/in
w/in 10days the
from receipt of
comment
on
or
claims
with
the
National
treatment
of
20days
to the
the court atreport of the Rehabilitation
Government
assets and claims
If Petitioner proposition
Debtor
from
The courtEnforce
may
Creditor Approval
of the
Receiver,
the court may:
petition
Direct the
service
by or its
Period
for
applicable
Debtor fails to
refer
any
dispute
Rehabilitation
Plan
commencement
the
personal
deliveryof
of a
Court may,
inand
its OBJECTION OF
Convert Convert Direct
Confirmation
Hear
provision
perform the
If court fails to act
Accounting
Hearing
on
the
creditors
toof
Rehabilitation Plan
proceeding
proceeding
to
to
Confirmation of
determine
any
the
on
the
petition
Discharge
of
Court
FINDS
MERIT
in
If
court
finds
the
comment on the
Submission
of the
If no confirmation
of Order
liquidation
of
Rehabilitation
Objection
toIssuance
the
Petition
or Rehabilitation
Appeal
Creditors
may
Insolvent
Debtor
or jointly
with any
Rehabilitati
w/in
120days
Liquidation
is
Complete
Rehabilitation
from
date of , the
petition
Determine
theand
Oppositiw/in 1 yr
Termination
of Proceeding
the
debtor
organize
a
of
its
creditors
may
file
a
verified
on
Planand
TERMINATE
Rehabilitation
Rehabilitation
Conversion
by
order
the Rehabilitation
for, the
Court shall issue
an
order
Rehabiliation
creditors
who
on filing petition
Court shall issue an order
Court
shall
issue
and
VOLUNTARY
petition
w/
the
court
for
approval
of
INVOLUNTARY
through
REHABLITATION
Lack
of
Merit
of
Plan
(Breach
of
RegistryReceiver
ofcourt
Claims
into
court may upon
or (Same
other party
or
submit it to the
order confirming
the
Objection
Petition
for Rehabilitation
a Pre-negotiated
Plan
Writ of
LIQUIDATION
PROCEEDINGS
or motu
Objection
Rehabilitation
Challeng motion LIQUIDATION
notice
of claims
Rehabilitation Plan
converted
Liquidation
Insolvent
debtor
Creditor - Initiated
Execution
e of proprio, be
Stay
Order

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