MATRIX ON FRIA LAW

Description Court-supervised rehabilitation Pre-negotiated rehabilitation

*Definition These proceedings are coursed through regular courts such as The proceedings involves the confirmation of the court of
Regional Trial Court (RTC). This kind of rehabilitation proceedings a Rehabilitation Plan that was already pre-negotiated by
may be initiated through voluntary proceedings or involuntary debtor and its creditors.
proceedings.

Who may Voluntary rehabilitation – An Insolvent Debtor An insolvent debtor by itself or jointly with any of its
initiate creditors
Involuntary rehabilitation – A Creditor or Group of Creditors

How it is Voluntary rehabilitation – petition to initiate voluntary proceedings filed The petitioner may file a verified petition with the court for
initiated by debtor which approved by sole proprietorship, partnership, the approval of a pre-negotiated Rehabilitation plan which has
stock corporation and non-stock corporation. been endorsed or approved by Supreme Court

It can be a group of debtors may jointly file a petition for

rehabilitation if one or more of its members foresee the impossibility of
meeting debts when they respectively fall due and the financial
distress would likely to adversely affect the financial condition of the
entity (Section 12)

Involuntary rehabilitation – petition may filed by any creditor or

group of creditor with an aggregate claim worth at least PHP
1,000,000 or 25% of subscribed capital stocks or partner’s
contribution, whichever is higher

What are the Voluntary rehabilitation: 1. Schedule of the debtor’s debts and liabilities
contents of 2. Inventory of the debtor’s assets
the petitions 1. Identification of debtor, its principal activities and address 3. Pre-negotiated rehabilitation plan including the names
2. Statement of the fact of and the cause of the debtor’s of at least three (3) qualified nominees for
insolvency rehabilitation receiver
3. Specific relief sought pursuant to RA 10142 4. Summary of disputed claims against the debtor and
4. Grounds upon which the petition is based report on the provisioning of funds to account for
5. Other information that may required under this Act depending appropriate payments should any such claims be ruled
 on the form of relief requested. valid or their amounts adjusted.
6. Schedule of the debtor’s debts and liabilities
7. Inventory of all its assets (including receivables and claims
against third parties)
8. Rehabilitation Plan
9. List of Name at least three (3) nominees to the position of
rehabilitation receiver
10. Other documents required to be filed with the petition and rules
of procedure as may be promulgated by the Supreme Court.

Involuntary rehabilitation:

1. Identification of debtor, its principal activities and address

2. Circumstances sufficient to support a petition to initiate
involuntary rehabilitation proceedings under Section 13 of this
Act
3. The specific relief sought under this Act
4. Rehabilitation plan
5. List of Name at least three (3) nominees to the position of
rehabilitation receiver
6. Other information that may be required under this Act
depending on the form of relief requested
7. Other documents required to be filed with the petition and rules
of procedure as may be promulgated by the Supreme Court.