Article 14p. 14

SPECIAL RULES OF PROCEDURE SUPPLEMENT TO THE RULES OF COURT

(q) To inspect, copy, photocopy or photograph any

document, paper, book, account or letter, whether in

the possession of the debtor or other persons;

(r) To gain entry into any property for the purpose of

inspecting, measuring, surveying or photographing it

or any designated relevant object or operation thereon;

(s) To take possession, control and custody of the

debtor's assets;

(t) To notify counterparties and the court as to contracts

that the debtor has decided to continue to perform the

breach;

(u) To be notified of and to attend all meetings of the

board of directors and stockholder of the debtor;

(v) To recommend any modification of an approved

rehabilitation plan as he may deem appropriate;

(w) To bring to the attention of the court any material

change

affecting

the

debtor's ability to meet the

obligations under the rehabilitation plan;

(x) To recommend the appointment of a management

committee in the cases provided for under Presidential

Decree No. 902-A, as amended;

(y) To recommend the termination of the proceedings

and the dissolution of the debtor if he determines that

the continuance in business of such entity is no longer

feasible or profitable or no longer works to the best

interest of the stockholders, parties-litigants, creditors

or the general public;

(z) To apply to the court for any order or directive that

he may deem necessary or desirable to aid him in the

exercise of his powers and performance of his duties

and functions; and

(aa) To exercise such other powers as may from time to

time be conferred upon him by the court.

Section 13. Oath and Bond. - Before entering upon his

powers, duties and functions, the rehabilitation receiver

must be sworn in to perform them faithfully, and must

post a bond executed in favor of the debtor in such sum

as the court may direct, to guarantee that he will

faithfully discharge his duties and obey the orders of

the court. If necessary, he shall also declare under oath

that he will perform the duties of a trustee of the assets

of the debtor, will act honestly and in good faith, and

deal with the assets of the debtor on a commercially

reasonable manner.

Section 14. Fees and Expenses. - The rehabilitation

receiver and the persons hired by him shall be entitled

to reasonable professional fees and reimbursement of

expenses which shall be considered as administrative

expenses.

Section 15. Immunity from Suit. - The rehabilitation

receiver shall not be subject to any action, claim or

demand in connection with any act done or omitted by

him in good faith in the exercise of his functions and

powers herein conferred.

Section 16. Reports. - The rehabilitation receiver shall

file a written report every three (3) months to the court

or as often as the court may require on the general

condition of the debtor. The report shall include, at the

minimum, interim financial statements of the debtor.

Section 17. Dismissal of Rehabilitation Receiver. - A

rehabilitation receiver may, upon motion, be dismissed

by the court on the following grounds: (a) if he fails,

without just cause, to perform any of his powers and

functions under these Rules; or (b) on any of the

grounds for removing a trustee under the general

principles of trusts.

Section 18. Rehabilitation Plan. - The rehabilitation

plan shall include (a) the desired business targets or

goals

and

the

duration

and

coverage

of

the

rehabilitation; (b) the terms and conditions of such

rehabilitation which shall include the manner of its

implementation, giving due regard to the interests of

secured creditors such as, but not limited, to the

non-impairment of their security liens or interests; (c)

the material financial commitments to support the

rehabilitation plan; (d) the means for the execution of

the rehabilitation plan, which may include debt to

equity conversion, restructuring of the debts, dacion en

pago or sale exchange or any disposition of assets or of

the interest of shareholders, partners or members; (e) a

liquidation analysis setting out for each creditor that

the present value of payments it would receive under

the plan is more than that which it would receive if the

assets of the debtor were sold by a liquidator within a

six-month period from the estimated date of filing of

the petition; and (f) such other relevant information to

enable a reasonable investor to make an informed

decision on the feasibility of the rehabilitation plan.

Section 19. Repayment Period. - If the rehabilitation

plan extends the period for the debtor to pay its

contractual obligations, the new period should not

extend beyond fifteen (15) years from the expiration of

the stipulated term existing at the time of filing of the

petition.

Section

20.

Effects

of

Rehabilitation

Plan.

-

The

approval of the rehabilitation plan by the court shall

result in the following:

(a) The plan and its provisions shall be binding upon the

debtor and all persons who may be affected thereby,

including the creditors, whether or not such persons

have participated in the proceedings or opposed the

plan

or

whether

or

not

their

claims

have

been

scheduled;

(b) The debtor shall comply with the provisions of the

plan and shall take all actions necessary to carry out the

plan;

(c)

Payments

shall

be

made

to

the

creditors

in

accordance with the provisions of the plan;

(d) Contracts and other arrangements between the

debtor

and

its

creditors

shall

be

interpreted

as

continuing to apply to the extent that they do not

conflict with the provisions of the plan; and

(e) Any compromises on amounts or rescheduling of

timing of payments by the debtor shall be binding on

creditors regardless of whether or not the plan is

successfully implemented.

Section

21.

Revocation

of

Rehabilitation

Plan

on

Grounds of Fraud. - Upon motion, within ninety (90)

days from the approval of the rehabilitation plan, and

after notice and hearing, the court may revoke the

approval thereof on the ground that the same was

secured through fraud.

Section 22. Alteration or Modification of Rehabilitation

Plan. - An approved rehabilitation plan may, upon

motion, be altered or modified if, in the judgement of

the court, such alteration or modification is necessary

to achieve the desired targets or goals set forth therein.

Section 23. Termination of Proceedings. - The court

shall, upon motion or upon recommendation of the

rehabilitation receiver, terminate the proceeding in any

of the following cases:

(a) Dismissal of the petition;

(b) Failure of the debtor to submit the rehabilitation

plan;

(c) Disapproval of the rehabilitation plan by the court;

(d) Failure to achieve the desired targets or goals as set

forth in the rehabilitation plan;

(e) Failure of the debtor to perform its obligations under

the plan;

(f) Determination that the rehabilitation plan may no

longer be implemented in accordance with its terms,

conditions, restrictions or assumptions; or

(g) Successful implementation of the rehabilitation

plan.

© Compiled By RGL

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