Section 29Sec./Art. 29

A new section entitled Section 16 of the same Act is hereby inserted between Sections 15 and 17 which shall read as follows:

CONVENTIONAL LIQUIDATION

A. ASSET MANAGEMENT AND CONVERSION

SEC. 16. (a) The assets gathered by the receiver shall be evaluated and verified as to their existence, ownership, condition, and other factors to determine their realizable value. In the management, preservation and disposition of assets, the receiver shall be guided by cost-benefit considerations, resources of the closed bank, and potential asset recovery.

(b) The conversion of the assets of the closed bank shall be carried out in a fair and transparent manner in accordance with the rules and procedures as may be determined by the receiver.

(c) In the management and/or conversion of the assets of the closed bank, the receiver shall have the authority to:

(1) Represent the closed bank before the Land Registration Authority (LRA), the Bureau of Lands, the Register of Deeds, the Land Transportation Office (LTO), the Assessors Office or other appropriate office of the local government unit, the Securities and Exchange Commission (SEC), or such other similar government agencies or private entities in:

(i) Verifying the authenticity of ownership documents;

(ii) Registering the interest of the closed bank on a specific property;

(iii) Consolidating ownership over an asset of the closed bank;

(iv) Securing certified true copies of documents held by the foregoing agencies/entities in relation to an asset of the closed bank;

(v) Securing the appropriate certification from the foregoing agencies/entities in relation to an asset of the closed bank; and

(vi) Performing other related activities;

(2) Conduct a physical or ocular inspection of the properties owned by, or mortgaged to, the closed bank, to determine their existence and present condition;

(3) Determine the disposal price of assets in accordance with generally accepted valuation principles, standards and practices, subject to such guidelines as the receiver may determine;

(4) Dispose real or personal properties of the closed bank through bidding, negotiated sale or any other mode including lease with option to purchase, whether by piece or by lot, as may be reasonably determined by the receiver based on cost-benefit considerations and to allow efficient distribution of assets to creditors; and

(5) Engage third parties to assist in the liquidation, manage and/or dispose the assets, handle cases filed against or by the closed bank, subject to such guidelines as determined by the receiver.

(d) Notwithstanding any provision of law to the contrary, the following rules shall apply to the management and/or conversion by the receiver of the assets of the closed bank:

(1) Upon notification of the closure of a bank, the LRA, the Bureau of Lands, the Register of Deeds, the LTO, the assessors office or other appropriate office of the local government unit, or such other similar government agencies shall not allow any transaction affecting the assets of the closed bank without the consent of the receiver.

(2) Upon issuance by the Monetary Board of the resolution ordering the closure of a bank, any person or entity in custody or possession of assets or records of the closed bank, including, but not limited to, the closed banks deposit accounts, titles to real property, collaterals, promissory notes, evidence of indebtedness or investments shall immediately turn over custody of said assets and records to the receiver. Such obligation shall cover evidences of deposit such as passbooks or certificates of deposit issued by the bank to its depositors. Pending turnover, all persons or entities in custody or possession of any asset or record of the closed bank shall hold the said assets or records in trust for the receiver.

(3) The persons or entities in custody or possession of such asset shall not allow, authorize or cause the withdrawal, transfer, disposition, removal, conversion, concealment, or other transaction involving or relating to the subject asset, unless otherwise directed by the receiver.

(e) The receiver shall have the authority to invest funds received from the conversion of the assets of the closed bank in government securities, other government-guaranteed marketable securities or investment-grade debt instruments.

(f) The proceeds of the sale of the bank and branch licenses shall be for the benefit of the creditors of the closed bank which shall be distributed in accordance with this Act and the Rules on Concurrence and Preference of Credits under the Civil Code or other laws.

B. PETITION FOR ASSISTANCE IN THE

LIQUIDATION OF A CLOSED BANK

(g) A petition for assistance in the liquidation is a special proceeding for the liquidation of a closed bank, and includes the declaration of the concomitant right of its creditors and the order of payment of their valid claims in the disposition of its assets.

Any proceeding initiated under this section shall be considered in rem. Jurisdiction over all persons affected by the proceeding shall be considered as acquired upon publication of the order setting the case for initial hearing in any newspaper of general circulation in the Philippines.

(h) The liquidation court shall have exclusive jurisdiction to adjudicate disputed claims against the closed banks, assist in the enforcement of individual liabilities of the stockholders, directors and officers and decide on all other issues as may be material to implement the distribution plan adopted by the Corporation for general application to all closed banks.

(i) The provisions of Republic Act No. 8799, otherwise known as The Securities Regulation Code, and Supreme Court Administrative Matter No. 00-8-10-SC, entitled, The Rules of Procedure on Corporate Rehabilitation, shall not be applicable to the petition for assistance in the liquidation of the closed bank.

(j) The petition shall be filed in the RTC which has jurisdiction over the principal office of the closed bank or the principal office of the receiver, at the option of the latter.

(k) The petition shall be filed ex parte within a reasonable period from receipt of the Monetary Board Resolution placing the bank under liquidation.

(1) All persons or entities with claims against the assets of the closed bank shall file their claims with the receiver within sixty (60) days from the date of publication of the notice of closure. Claims filed outside the foregoing prescribed period shall be disallowed.

Claims denied by the receiver shall be filed with the liquidation court within sixty (60) days from receipt of the final notice of denial of claim.

(m) A claim whose validity has not yet been determined with finality at the time of the submission of the final asset distribution plan, either by reason of a pending suit or for whatever reason, shall be considered as contingent claim and shall not be paid under the proposed final asset distribution plan.

(n) Upon finality of the order approving the final asset distribution plan, the petition for assistance in the liquidation of a closed bank shall henceforth be, for all intents and purposes, considered closed and terminated and the receiver, its officers, employees or agents, are forever discharged from any and all claims and/or liability arising from or in connection with the liquidation of the closed bank.

(o) The receiver shall submit a final report on the implementation of the approved final asset distribution plan to the Monetary Board and the SEC after the expiration of the winding-up period provided in this Act.

(p) The Supreme Court shall promulgate the appropriate procedural rules to implement this section.

C. WINDING-UP

(q) The creditors shall have a period of six (6) months from the date of publication of notice of the approval by the court of the final asset distribution plan of the closed bank within which to claim payment of the principal obligations and surplus dividends. During this six-month period, the receiver shall hold as trustee the assets allocated in the final asset distribution plan for said creditors.

Failure by the creditor to comply with the documentary requirements within the prescribed period and/or refusal to accept the asset as payment shall be deemed as abandonment or waiver of his or her right to payment.

(r) The individual stockholders of record or their duly-authorized representative or the court-appointed stockholders representative shall have a period of six (6) months from publication of notice of the approval by the court of the final asset distribution plan of the closed bank within which to claim the residual assets. During this six-month period, the receiver shall hold as trustee the assets allocated in the final asset distribution plan for said stockholders of record.

Failure by the individual stockholders of record or their duly-authorized representative or the court-appointed stockholders representative to comply with the documentary requirements within the prescribed period and/or refusal to accept the residual assets in kind shall be deemed as abandonment or waiver of right to receive the residual assets.

(s) After the lapse of the six-month period provided in paragraphs (q) and (r) of this section, all assets which remain unclaimed by the creditors and/or stockholders of record shall be turned over to the Bureau of Treasury.

(t) The receiver shall continue to keep all the pertinent records of the closed bank for a period of six (6) months from the date of publication of the approval of the final asset distribution plan.

After the lapse of this period, the receiver is authorized to dispose of the same in accordance with the rules and regulations to be prescribed by the receiver.