Republic of the Philippines Batangas State University COLLEGE OF ACCOUNTANCY BUSINESS ECONOMICS AND INTERNATIONAL HOSPITALITY MANAGEMENT Batangas City III.Problems1. Z, Inc. is dissolved. a. The board of directors approved a resolution authorizing the payment by the corporation under a contract. Is the resolution valid? -It depends. According to Section 122, Z, Inc. shall nevertheless continue as a body corporate for three (3) years after the time when it would have been so dissolved, for the purpose of prosecuting and defending suits by or against it and enabling it to settle and close its affairs, to dispose of and convey its property and to distribute its assets, but not for the purpose of continuing the business for which it was established. b. After the lapse of the three (3) year winding up period, what remedies, if any, are available to a corporate creditor to recover the debts of the corporation? -The law does not allow any extension of the period. However, a creditor with a pending action against Z, Inc. or Z, Inc. with a pending suit filed by it may prevent the abatement by asking the proper court for the appointment of a receiver or trustee within the winding up period. The trustee may sue and be sued as such in all matters connected with the liquidation, even beyond the period where there is no time limit within which the trustee must finish the liquidation. It may be found impossible to complete the work of liquidation within the three-year period.