Article 48Supplement v1, p. 48

COMMERCIAL LAWS SUPPLEMENT

(d) Commencement date shall refer to the date on which

the court issues the Commencement Order, which shall

be retroactive to the date of filing of the petition for

voluntary or involuntary proceedings.

(e) Commencement Order shall refer to the order issued

by the court under Section 16 of this Act.

(f) Control shall refer to the power of a parent corporation

to direct or govern the financial and operating policies of

an enterprise so as to obtain benefits from its activities.

Control is presumed to exist when the parent owns,

directly or indirectly through subsidiaries or affiliates,

more than one-half (1/2) of the voting power of an

enterprise unless, in exceptional circumstances, it can

clearly be demonstrated that such ownership does not

constitute control. Control also exists even when the

parent owns one-half (1/2) or less of the voting power of

an enterprise when there is power:

(1) over more than one-half (1/2) of the voting rights by

virtue of an agreement with investors;

(2) to direct or govern the financial and operating policies

of the enterprise under a statute or an agreement;

(3) to appoint or remove the majority of the members of

the board of directors or equivalent governing body; or

(4) to cast the majority votes at meetings of the board of

directors or equivalent governing body.

(g) Court shall refer to the court designated by the

Supreme

Court to hear and determine, at the first

instance, the cases brought under this Act.

(h) Creditor shall refer to a natural or juridical person

which has a claim against the debtor that arose on or

before the commencement date.

(i) Date of liquidation shall refer to the date on which the

court issues the Liquidation Order.

(j) Days shall refer to calendar days unless otherwise

specifically stated in this Act.

(k) Debtor shall refer to, unless specifically excluded by a

provision of this Act, a sole proprietorship duly registered

with the Department of Trade and Industry (DTI), a

partnership

duly

registered

with

the

Securities

and

Exchange

Commission

(SEC),

a

corporation

duly

organized and existing under Philippine laws, or an

individual debtor who has become insolvent as defined

herein.

(l) Encumbered property shall refer to real or personal

property of the debtor upon which a lien attaches.

(m) General unsecured creditor shall refer to a creditor

whose claim or a portion thereof is neither secured,

preferred nor subordinated under this Act.

(n) Group of debtors shall refer to and can cover only: (1)

corporations that are financially related to one another as

parent

corporations,

subsidiaries

or

affiliates;

(2)

partnerships that are owned more than fifty percent

(50%) by the same person; and (3) single proprietorships

that are owned by the same person. When the petition

covers a group of debtors, all reference under these rules

to debtor shall include and apply to the group of debtors.

(o) Individual debtor shall refer to a natural person who is

a resident and citizen of the Philippines that has become

insolvent as defined herein.

(p) Insolvent shall refer to the financial condition of a

debtor that is generally unable to pay its or his liabilities

as they fall due in the ordinary course of business or has

liabilities that are greater than its or his assets.

(q) Insolvent debtor's estate shall refer to the estate of the

insolvent debtor, which includes all the property and

assets of the debtor as of commencement date, plus the

property

and

assets

acquired

by

the

rehabilitation

receiver or liquidator after that date, as well as all other

property

and

assets

in

which

the

debtor

has

an

ownership interest, whether or not these property and

assets

are

in

the

debtor's

possession

as

of

commencement date: Provided, That trust assets and

bailment, and other property and assets of a third party

that

are

in

the

possession

of

the

debtor

as

of

commencement date, are excluded therefrom.

(r) Involuntary proceedings shall refer to proceedings

initiated by creditors.

(s) Liabilities shall refer to monetary claims against the

debtor, including stockholder's advances that have been

recorded in the debtor's audited financial statements as

advances for future subscriptions.

(t) Lien shall refer to a statutory or contractual claim or

judicial charge on real or personal property that legally

entitles a creditor to resort to said property for payment

of the claim or debt secured by such lien.

(u) Liquidation shall refer to the proceedings under

Chapter V of this Act.

(v) Liquidation Order shall refer to the Order issued by the

court under Section 112 of this Act.

(w) Liquidator shall refer to the natural person or juridical

entity appointed as such by the court and entrusted with

such powers and duties as set forth in this Act: Provided,

That, if the liquidator is a juridical entity, it must designate

a natural person who possesses all the qualifications and

none of the disqualifications as its representative, it being

understood

that

the

juridical

entity

and

the

representative are solidarily liable for all obligations and

responsibilities of the liquidator.

(x) Officer shall refer to a natural person holding a

management position described in or contemplated by a

juridical

entity's

articles

of

incorporation,

bylaws

or

equivalent documents, except for the corporate secretary,

the assistant corporate secretary and the external auditor.

(y) Ordinary course of business shall refer to transactions

in the pursuit of the individual debtor's or debtor's

business operations prior to rehabilitation or insolvency

proceedings and on ordinary business terms.

(z)

Ownership

interest

shall

refer

to

the ownership

interest of third parties in property held by the debtor,

including those covered by trust receipts or assignments

of receivables.

(aa) Parent shall refer to a corporation which has control

over another corporation either directly or indirectly

through one or more intermediaries.

(bb) Party to the proceedings shall refer to the debtor, a

creditor,

the

unsecured

creditors'

committee,

a

stakeholder,

a

party

with

an

ownership

interest

in

property held by the debtor, a secured creditor, the

rehabilitation receiver, liquidator or any other juridical or

natural person who stands to be benefited or injured by

the outcome of the proceedings and whose notice of

appearance is accepted by the court.

(cc) Possessory lien shall refer to a lien on property, the

possession of which has been transferred to a creditor or

a representative or agent thereof.

(dd)

Proceedings

shall

refer

to

judicial

proceedings

commenced by the court's acceptance of a petition filed

under this Act.

(ee) Property of others shall refer to property held by the

debtor

in

which

other

persons

have

an

ownership

interest.

(ff)

Publication

notice

shall

refer

to notice through

publication in a newspaper of general circulation in the

Philippines on a business day for two (2) consecutive

weeks.

(gg) Rehabilitation shall refer to the restoration of the

debtor

to

a

condition

of

successful

operation

and

solvency, if it is shown that its continuance of operation is

economically feasible and its creditors can recover by way

of the present value of payments projected in the plan,

more if the debtor continues as a going concern than if it

is immediately liquidated.

(hh) Rehabilitation receiver shall refer to the person or

persons, natural or juridical, appointed as such by the

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