Course Hero Logo

Enforcement of claims against the debtor guarantors

Course Hero uses AI to attempt to automatically extract content from documents to surface to you and others so you can study better, e.g., in search results, to enrich docs, and more. This preview shows page 56 - 63 out of 94 pages.

enforcement of claims against the debtor, guarantors, orsureties of the debtors does not extend to the claimsagainst the issuing bank in a letter of credit.Letters of credit are primary obligations and not accessorycontracts and while they are security arrangements, theyare not thereby converted into contracts of guaranty(MWSSv. Daway, G.R. No. 160732, June 21, 2004).BANK’S LIABILITY UNDER LOC NOTSTAYED
Stay orders should only cover those claims directed againstcorporations or their properties, against their guarantors, ortheir sureties who are not solidarily liable with them, to theexclusion of accommodation mortgagors.Properties merely owned by stockholderscannot be included inthe inventory of assets of a corporation under rehabilitation.(Bustos vs. Millians Shoe, G.R. No. 185024, April 24, 2017)SEPARATE PERSONALITY RULESHAREHOLDER’S PROPERTY NOTCOVERED BY STAY ORDER
MANAGEMENTManagementcommitteesandreceiversareappointed when the corporation is in imminentdangerof(a)dissipation,loss,wastageordestructionof assets or other properties; and (b)paralizationof its business operations that may beprejudicial to the interest of the stockholders,parties-litigants, or the general public.(Alfredo Villamor, Jr.v. John Umale,G.R. No. 172843, September 24, 2014)
IMMUNITYThe rehabilitation receiver and all persons employed byhim,shall not be subject to any action, claim ordemand in connection with any act done or omitted tobe done by them ingood faithin connection with theexercise of their powers and functions under this Act orother actions duly approved by the court.(Sec. 41,FRIA)
ECONOMIC FEASIBILITYAthoroughexaminationandanalysisofthedistressedcorporation’sfinancial data must be conducted.If the results of such examination and analysis show that thereisa real opportunity to rehabilitate the corporation in view of theassumptions made and financial goals statedin the proposedrehabilitation plan, then rehabilitation is feasible.(Viva ShippingLines, Inc. vs. Keppel Philippines Marine, Inc., 784 SCRA 173, G.R.No. 177382 February 17, 2016)
MATERIAL FINANCIAL COMMITMENT(MFC)A material financial commitment is significant ina rehabilitation plan.(Philippine Bank of Communications vs. Basic Polyprinters andPackaging Corporation, 738 SCRA 561, G.R. No. 187581 October20, 2014)
MATERIAL FINANCIAL COMMITMENT(MFC)- significant in gauging the resolve, determination, earnestnessand good faith of the distressed corporation in financing theproposed rehabilitation plan.Commitment may include the voluntary undertakings of thestockholdersorthewould-beinvestorsofthedebtor-corporation indicating their readiness, willingness and ability tocontribute funds or property to guarantee the continuedsuccessful operation of the debtor corporation during the periodofrehabilitation.

Upload your study docs or become a

Course Hero member to access this document

Upload your study docs or become a

Course Hero member to access this document

End of preview. Want to read all 94 pages?

Upload your study docs or become a

Course Hero member to access this document

Term
Fall
Professor
Dean Jara
Tags
Bankruptcy, Debtor

Newly uploaded documents

Show More

Newly uploaded documents

Show More

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture