Article 11p. 11

SPECIAL RULES OF PROCEDURE SUPPLEMENT TO THE RULES OF COURT

known as The Securities Regulation Code, shall likewise

be governed by these Rules.

RULE 2 DEFINITION OF TERMS AND

CONSTRUCTION

Section 1. Definition of Terms. - For purpose of these

Rules:

"Administrative Expenses" shall refer to (a) reasonable

and necessary expenses that are incurred in connection

with the filing of the petition; (b) expenses incurred in

the ordinary course of business after the issuance of the

stay order, excluding interest payable to the creditors

for loans and credit accommodations existing at the

time of the issuance of the stay order, and (c) other

expenses that are authorized under this Rules.

"Affidavit of General Financial Condition" shall refer to a

verified statement on the general financial condition of

the debtor requiredin Section 2, Rule 4 of these Rules.

"Affiliate" is a corporation that directly or indirectly,

through one or more intermediaries, is controlled by, or

is under the common control of another corporation,

which thereby becomes its parent corporation.

"Asset" is anything of value that can be in the form of

money, such as cash at the bank or amounts owed;

fixed

assets

such

as

property

or

equipment;

or

intangibles including intellectual property, the book

value of which is shown in the last three audited

financial statement immediately preceding the filing of

the petition, In case the debtor is less than three years

in operation, it is sufficient that the book value is based

on the audited financial statement\\s for the years or

year immediately preceding the filing of petition, as the

case may be.

"Board

of

Directors"

shall

include

the

executive

committee

or

the

management of partnership or

association

"Claim" shall include all claims or demands of whatever

nature or charter against a debtor or its property,

whether for money or otherwise

"Control" is 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 exit when the parent owns,

directly or indirectly though subsidiaries, more than

one - half (½) of the voting power of the voting power of

an

enterprise

unless,

unless,

in

exceptional

circumstances, it can clearly be demonstrated that

such own ship does not constitute control. Control also

exits even when the parents owns one-half (1/2) or less

of the voting power of an enterprise when there is

power.

(A) Over more than one-half (½) of agreement with

investors;

(B) To direct or govern the financial and operating

policies of the enterprise under a statute or agreement;

(C) To appoint or remove the majority of the member of

the board of directors or equivalent governing body; or

(D) To cast the majority votes at meeting of the board of

directors or equivalent governing body.

"Creditor" shall mean any holder or a Chain

"Court" shall refer to the proper Regional Trial Court

designated to hear and decide the cases contemplated

contemplated under these Rules.

"Days" shall refer to calendar days unless otherwise

provided in these Rules.

"Debtor" shall mean any corporation, partnership or

association

or

a

group

of

companies,

whether

supervised or regulated by the Securities and Exchange

Commission or other government agencies, on whose

behalf a petition for rehabilitation has been filed under

these rules.

"Foreign count" means a judicial or other authority

competent to control or supervise a foreign proceeding.

"Foreign proceeding" means a collective judicial or

administrative proceeding in a foreign State, interim

proceeding, pursuant to a law re solvency in which

proceeding the assets and affairs of the debtor are

subject to control or supervision by a foreign count, for

the purpose of rehabilitation or re-organization

"Foreign

Representative"

means

person

or

entity,

including

one

appointed

on

an

interim

basis,

authorized in a foreign proceeding to administer the

reorganization or rehabilitation of the debtor or act as a

representative of the foreign proceeding.

"Group of companies" refers to, and can cover only,

corporation that are financially refers to, and can cover

only, corporations that are financially rated to one

another

as

parent

corporation,

subsidiaries

and

affiliates.

When the petition covers a group of companies, all

reference under these Rules to "debtor" shall include

and apply include and apply to the group of companies.

"Liabilities" shall refer to monetary claims against the

debtor,

including

stockholders

advances that have

been

recorded

in

the

debtor's

audited

financial

statements as advances for subscription.

"Parent" is a corporation directly or indirectly though

one or more intermediaries.

"Rehabilitation"

shall

mean

the

restoration

of the

debtor

to

a

position

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 corporation continues as a going

concern than if it immediately liquidated.

"Secured claim" shall refer to any clan whose payment

or fulfillment is secured by contract or by law, including

any clam or credit enumerated under Articles 2241 and

2242 of the civil Code and Article 110, as amended, of the

Labor code of the Philippines.

"Subsidiary"

mean

a

corporation

more

than

fifty

percent (50%) of the voting stock of which is owned or

controlled directly or indirectly though one or more

intermediaries by another corporation

"Unsecured clan" shall mean any clan other than a

seared claim.

Section 2. Construction - These Rules shall be liberally

construed to carry out the objectives of Section 5(d),

6(d) and 6(d) of Presidential Decree No. 902-A, as

amended, and to assist the parties in obtaining a jut,

expeditious and inexpensive determination of case.

Where

applicable,

the

Rules

of

Court

shall

apply

supplementary to proceedings under these Rules.

RULES 3 GENERAL PROVISIONS

Section 1. Nature of Proceeding - Any proceeding

initiated under these Rules shall be considered in rem.

Jurisdiction over all persons affected by the proceeding

shall be considered as acquired upon publication of the

notice of the commencement of the proceedings in

any newspaper or general circulation in the Philippines

in the manner prescribed by these rules.

The

proceedings

shall

also

be

summary

and

non-adversarial in nature. The following pleading are

prohibited:

(a) Motion to dismiss;

(b) Motion for a bill of particulars:

(c) Petition for relief;

(d) Motion for extension;

(e) Motion for postponement

(f) Third-party complaint;

© Compiled By RGL

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