Article 16p. 16

SPECIAL RULES OF PROCEDURE SUPPLEMENT TO THE RULES OF COURT

file

any

comment

thereon

or

opposition

thereto

without leave of court.

If the Schedule of Debts and Liabilities omits a claim or

liability,

the

creditor

concerned shall attach to its

comment or opposition a verified statement of the

obligations allegedly due it.

Section 5. Initial Hearing. -

(a) On or before the initial hearing set in the order

mentioned in Section 7 of Rule 3, the petitioner shall

file a publisher's affidavit showing that the publication

requirements and a petitioner's affidavit showing that

the notification requirement for foreign creditors had

been complied with, as required in the stay order.

(b) Before proceeding with the initial hearing, the court

shall

determine

whether

the

jurisdictional

requirements set forth above had been complied with.

After finding that such requirements are met, the court

shall ensure that the parties consider in detail all of the

following:

(1) Amendments to the rehabilitation plan proposed by

the debtor;

(2) Simplification of the issues;

(3)

The

possibility

of

obtaining

stipulations

and

admission of facts and documents, including resort to

request for admission under Rule 26 of the Rule of

Court;

(4) The possibility of amicably agreeing on any issue

brought up in the comments on, or opposition to, the

petition;

(5) Referral of any accounting, financial and other

technical issues to an expert;

(6) The possibility of submitting the petition for decision

on the basis of the comments, opposition, affidavit and

other documents on record;

(7)

The

possibility

of

a

new

rehabilitation

plan

voluntarily agreed upon by the debtor and its creditors;

and

(8) Such other matters as may aid in the speedy and

summary disposition of the case.

Section 6. Additional Hearings. - The court may hold

additional

hearings

as

part

of

the

initial

hearing

contemplated in these Rules but the initial hearing

must be concluded not later than ninety (90) days from

the initial date of the initial hearing fixed in the stay

order.

Section 7. Order After Initial Hearing. -

(a) Within twenty (20) days after the last hearing, the

court shall issue an order which shall:

(1) Give due course to the petition and immediately

refer the petition and its annexes to the rehabilitation

receiver who shall evaluate the rehabilitation plan and

submit his recommendations to the court not later

than ninety (90) days from the date of the last initial

hearing, if the court is satisfied that there is merit to the

petition, otherwise the court shall immediately dismiss

the petition; and

(2) Recite in detail the matters taken up in the initial

hearing and the action taken thereon, including a

substitute rehabilitation plan contemplated in Sections

5 (b)(7) and (8) of this Rule;

(b)

If

the

debtor

and

creditors

agree

on

a

new

rehabilitation plan pursuant to Section 5 (b)(7) of this

Rule, the order shall so state the fact and require the

rehabilitation receiver to supply the details of the plan

and submit it for the approval of the court not later

than sixty (6) days from the date of the last initial

hearing. The court shall approve the new rehabilitation

plan not later than ninety (90) days from the date of the

last initial hearing upon concurrence of the following:

(1) Approval or endorsement of creditors holding at

least two-thirds (2/3) of the total liabilities of the debtor

including secured creditors holding more than fifty

percent (50%) of the total secured claims of the debtor

and

unsecured

creditors

holding

more

than

fifty

percent (50%) of the total unsecured claims of the

debtor;

(2)

The

rehabilitation

plan

complies

with

the

requirements specified in Section 18 of Rule 3;

(3) The rehabilitation plan would provide the objecting

class of creditors with payments whose present value

projected in the plan would be greater than that which

they would have received if the assets of the debtor

were sold by a liquidator within a six (6) month period

from the date of filing of the petition; and

(4)

The

rehabilitation

receiver

has

recommended

approval of the plan.

The approval by the court of the new rehabilitation plan

shall

have

the

same

effect

as

approval

of

a

rehabilitation plan under Section 20 of Rule 3.

Section 8. Creditors' Meetings. - If no new rehabilitation

plan is agreed upon by the debtor and the creditors, the

rehabilitation receiver, at any time before he submits

his evaluation on the debtor-proposed rehabilitation

plan to the court as prescribed in Section 7(a)(1) of this

Rule, shall, either alone or with the debtor, meet with

the creditors or any interested party t discuss the plan

with

a

view

to

clarifying or resolving any matter

connected therewith.

Section

9.

Comments

on

or

Opposition

to

Rehabilitation Plan. - Any creditor or interested party of

record may file comments on or opposition to the

proposed rehabilitation plan, with a copy given to the

rehabilitation receiver, not later than sixty (60) days

from the date of the last initial hearing. The court shall

conduct summary and non-adversarial proceedings to

receive evidence, if necessary, in hearing the comments

on and opposition to the plan.

Section 10. modification of Proposed Rehabilitation

Plan. - The debtor may modify its rehabilitation plan in

the light of the comments of the rehabilitation receiver

and creditors or any interested party and submit a

revised or substitute rehabilitation plan for the final

approval of the court. Such rehabilitation plan must be

submitted to the court not later than ten (10) moths

from the date of filing of the petition.

Section 11. Approval of Rehabilitation Plan. - The court

may

approve

a

rehabilitation

plan

even

over

the

opposition of creditors of the debtor if, in its judgement,

the rehabilitation of the debtor is feasible and the

opposition of the creditors is manifestly unreasonable if

the following are present:

(a)

The

rehabilitation

plan

complies

with

the

requirements specified in Section 18 of Rule 3;

(b) The rehabilitation plan would provide the objecting

class of creditors with payments whose present value

projected in the plan would be greater than that which

they would have received if the assets of the debtor

were sold by a liquidator within a six (6)-month period

from the date of filing of the petition; and

(c)

The

rehabilitation

receiver

has

recommended

approval of the plan.

In approving the rehabilitation plan, the court shall

ensure that the rights of the secured creditors are not

impaired. The court shall also issue the necessary orders

or

processes

for

its

immediate

and

successful

implementation. it may impose such terms, conditions,

or restrictions as the effective implementation and

monitoring thereof may reasonably require, or for the

protection and preservation of the interests of the

creditors should the plan fall.

Section 12. Period to Decide Petition. - The court shall

decide the petition within one (1) year from the date of

filing of the petition, unless the court, for good cause

shown, is able to secure an extension of the period from

the Supreme Court.

© Compiled By RGL

16 of 98