REHABILITATION I. Introduction a. Declaration of Policy b. Nature of Proceedings- significance that it is an IN REM proceeding c. Relevant Terms i. Rehabilitation ii.

Claim iii. Creditor- significance: on or before commencement date iv. Debtor vis--vis Individual Debtor- significance: sole prop treated as if juridical entity d. Kinds of Rehabilitation in General i. Court-Supervised (Chapter II) ii. Pre-Negotiated Rehabilitation (Chapter III) iii. Out-of-Court or Informal Restructuring Agreements or Rehabilitation Plans (Chapter IV)

II.

Court- Supervised Rehabilitation a. Initiation Proceedings i. Voluntary 1. Who 2. How ii. Involuntary 1. Who 2. How b. Action on the Petition and Commencement of Proceedings i. Action on the Petition ii. Commencement of Proceedings and Issuance of a Commencement Order 1. Significance of commencement date and commencement order

a. Definition b. Effectivity and duration- in general (Section 21) c. Effects of commencement order (Section 17) d. Contents- cite only significant ones i. Publication of Commencement Order (Section 16 (f))- relate to IN REM nature ii. Stay or Suspension Order (Section 16 (q)) 1. Definition 2. Exceptions to the stay or suspension order (Section 18) iii. Establishment of Claims (Section 16 (i)/ Determination of Claims (Section 44) 1. Effect of failure to file a notice of claim (Section 23) iv. Appointment of Rehabilitation Receiverdiscuss briefly the duties (Section 31) v. Set the case for initial hearing iii. Action at the Initial Hearing (Section 22) iv. Report of the Rehabilitation Receiver (Section 24) v. Due Course to or Dismissal of Petition, or Conversion of Proceedings 1. Give due course (Section 26)- FOCUS 2. Dismiss (Section 27) 3. Convert into liquidation proceedings c. Implementation of Decision- Rehabilitation Plan i. Definition and purpose ii. Process of preparation- briefly discuss (Sections 63-68) 1. Proposal 2. Creditor Approval 3. Objections 4. Confirmation

a. Effect of Confirmation (Section 69) i. BINDING EFFECT ii. DEBTOR TO COMPLY WITH REHAB PLAN iii. PAYMENT IN ACCORDANCE WITH REHAB PLAN iv. CONTRACTS AND ARRANGEMENTS TO CONTINUE IF NOT IN CONFLICT WITH REHAB PLAN v. COMPROMISES/RESCHEDULING BE BINDING vi. CLAIMS AFTER APPROVAL NOT SUBJECT OF SUSPENSION ORDER b. Lapse tantamount to Confirmation (Section 72)??? i. 1 YEAR PERIOD FROM FILING TO CONFIRM, OTHERWISE CONVERTED TO LIQUIDATION OF THE DEBTOR iii. Contents of rehabilitation plan (pertinent: a-l)- FOCUS anisah, cy 60-61, karen timeline d. Implementation of Rehabilitation Plan i. Governance (Section 47) ii. Use, preservation and disposal of assets- make COMPARATIVE TABLE (Sections 48-53) iii. Treatment of Contracts (Sections 57-59) iv. Treatment of Secured Creditors- FOCUS (Sections 60-61) 1. NO DIMINUTION OF SECURED CREDITOR RIGHTS ONLY SUSPENSION OF ENFORCEMENT 2. COURT MAY TERMINATE/MODIFY CONTINUANCE OF PAYMENT OR RELIEVE CLAIM FROM ITS COVERAGE UPON SHOWING a. CREDITOR NO ADEQUATE PROTECTION b. VALUE OF CLAIM EXCEEDS FMV OF PROPERTY (NOT NECESSARY FOR REHAB) *DEEMED TO LACK ADEQUATE PROTECTION WHEN: 1. DEBTOR FAILS/REFUSES TO KEEP PROPERTY INSURED (PRE-EXISTING AGREEMENT)

2. DEBTOR FAILS/REFUSES TO TAKE COMMERCIALLY REASONABLE STEPS TO MAINTAIN PROPERTY 3. PROPERTY DEPRECIATED = CREDITOR UNDER SECURED *remedies: 1. receiver to provide for insurance or maintenance 2. make payments or give additional or replacement security 3. if not feasible, creditor can enforce security e. Termination Proceedings (Section 74) BY COURT ORDER i. Successful implementation 1. SUCCESSFULLY IMPLEMENTED, DEBTOR REHABILITATED ii. Failure of rehabilitation 1. DISMISSAL OF PETITION 2. FAILURE TO SUBMIT REHAB PLAN 3. NO SUBSTANTIAL LIKELIHOOD TO REHABILITATE W/IN REASONABLE PERIOD UNDER THE PLAN 4. FAILURE OF DEBTOR TO COMPLY WITH REHAB PLAN 5. COMMISSION OF FRAUD IN SECURING APPROVAL 6. ANALOGOUS CIRCUMSTANCES *UPON BREACH OR FAILURE OF REHAB PLAN AFFECTED PARTY MAY MOTION FOR: 1. CURE BREACH W/IN REASONABLE TIME ELSE CONVERTED TO LIQUIDATION 2. CONVERT PROCEEDING TO LIQUIDATION 3. SUBMIT AMENDEMENT TO REHAB PLAN 4. OTHER REMEDIES TO THE BREACH 5. ENFORCE APPLICABLE PROVISIONS OF REHAB PLAN THROUGH WRIT OF EXECUTION III. Pre-Negotiated Rehabilitation (for HAND-OUTS only)

IV.

Informal Restructuring (for HAND-OUTS only)

V.

Conclusion

Part Intro

Assigned Reporter Person A

II a- b II c-e (Focus: Contents of Rehab Plan) Extro

Persons B and C Persons D, E and F Person A