EN BANC

A.M. No. 00-8-10-SC

December 2, 2008

INTERIM RULES OF PROCEDURE ON CORPORATE

REHABILITATION
RESOLUTION
Acting on the recommendation of the Subcommittee on
Special Rules for Special Commercial Courts, submitting for
the consideration and approval of the Court the Resolved to
APPROVED the same.
The Rule shall take effect on January 16, 2009 following its
publication in two (2) newspapers of general circulation.
December 2, 2008
RULES OF PROCEDURE ON CORPORATE REHABILITATION
(2008)
RULE 1
COVERAGE
Section 1. Scope - These Rules shall apply to petitions for
rehabilitation of corporations, partnerships and associations
pursuant to Presidential Decree No. 902-A, as amended.
Section 2. Applicability to Rehabilitation Cases Transferred
from the Securities and Exchange Commission. - Cases for
rehabilitation
transferred
from
Securities
Exchange
Commission to the Regional Trial Court pursuant to Republic
Act No. 8799, otherwise 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 () of the voting power of the voting power of an
enterprise unless, unless, in exception 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 () 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
recoded 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 PROVISONS
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;
(g) Intervention;
(h) Motion to hear affirmative defenses; and
(I) Any pleading or motion which is similar to or of
like effect as any of the foregoing.
Any pleading, motion, opposition, defense or claim filed by
any interested party shall be supported by verified
statements that the affiant has read same and that the
factual allegations therein are true and correct of his personal
knowledge or based on authentic records, and correct of his
personal knowledge or based on authentic records, and shall
contain as annexes such documents as may be deemed by
the party court may be decide matters on the basis of
affidavits and other documentary evidence. Where necessary,
the court shall conduct clarificatory hearings before resolving
any matter submitted to it for resolution.
Section 2. Venue. - Petitions for rehabilitation pursuant to
these Rules shall be filed in the regional trial court which has
jurisdiction over the principal office of the debtor as specified

in its articles of incorporation or partnership. Where the

principal office of the corporation, partnership or association
is registered in the Securities and Exchange Commission as
Metro Manila, the action must be filed in the regional trial
court of the city or municipality where the head office is
located.
A joint petition by a group of companies shall be filed in the
Regional Trial Court which has jurisdiction over the principal
office of the parent company, as specified in its Articles of
Incorporation.
Section 3. Service of Pleadings and Documents. - When so
authorized by the court, any pleading and/or document
required by these Rules may be filed with the court and/or
served upon the other parties by facsimile transmission (fax)
or electronic mail (e-mail). In such cases, the date of
transmission shall be deemed to be the dtae of service.
Where the pleading or document is voluminous, the court
may, upon motion, waive the requirement of service;
provided that a copy thereof together with all its attachments
is duly filed with the court and is made available for
examination and reproduction by any party, and provided,
further, that a notice of such filing and availability is duly
served on the parties.
Section 4. Trade Secrets and Other Confidential Information. Upon motion, the court may issue an order to protect trade
secrets or other confidential research, development or
commercial information belonging to the debtor.
Section 5. Executory Nature of Orders. - Any order issued by
the court under these Rules is immediately executory. A
petition to review the order shall not stay the execution of the
order unless restrained or enjoined by the appellate court.
Unless otherwise provided in these Rules, the review of any
order or decision of the court or an appeal therefrom shall be
in accordance with the Rules of Court; provided, however,
that the reliefs ordered by the trial or appellate courts shall
take into account the need for resolution of proceedings in a
just, equitable and speedy manner.
Section 6. Nullification of Illegal Transfers and Preferences. Upon motion the court may nullify any transfer of property or
any other conveyance, sale, payment or agreement made in
violation of its stay order or in violation of these Rules.
Section 7. Stay Order. - If the court finds the petition to be
sufficient in form and substance, it shall; not later than five
(5) working days from the filing of the petition, issue an order:
(a) appointing a rehabilitation receive and fixing his bond;
(b) staying enforcement of all claims, whether for money or
otherwise and whether such enforcement is by court action or
otherwise, against the debtor, its guarantors and persons not
solidarily liable with the debtor; provided, that the stay order
shall not cover claims against letters of credit and similar
security arrangements issued by a third party to secure the
payment of the debtor's obligations; provided, further, that
the stay order shall not cover foreclosure by a creditor of
property not belonging to a debtor under corporate
rehabilitation; provided, however, that where the owner of
such property sought to be foreclosed is also a guarantor or
one who is not solidarily liable, said owner shall be entitled to
the benefit of excussion as such guarantor;
(c) prohibiting the debtor from selling, encumbering,
transferring, or disposing in any manner any of its properties
except in the ordinary course of business;
(d) prohibiting the debtor from making any payment of its
liabilities except as provided in items (e), (f) and (g) of this
Section or when ordered by the court pursuant to Section 10
of Rule 3;
(e) prohibiting the debtor's suppliers of goods or services from
withholding supply of goods and services in the ordinary
course of business for as long as the debtor makes payments
for the services and goods supplied after the issuance of the
stay order;

(f) directing the payment in full of all administrative expenses

incurred after the issuance of the stay order;
(g) directing the payment of new loans or other forms of
credit accommodations obtained for the rehabilitation of the
debtor with prior court approval;
(h) fixing the dates of the initial hearing on the petition not
earlier than forty-five (45) days but not later than sixty (60)
days from the filing thereof;
(I) directing the petitioner to publish the Order in a newspaper
of general circulation in the Philippines once a week for two
(2) consecutive weeks;
(j) directing the petitioner to furnish a copy of the petition and
its annexes, as well as the stay order, to the creditors named
in the petition and the appropriate regulatory agencies such
as, but not limited to, the Securities and Exchange
Commission, the Bangko Sentral ng Pilipinas, the Insurance
Commission, the National Telecommunications Commission,
the Housing and Land Use Regulatory Board and the Energy
Regulatory Commission;
(k) directing the petitioner that foreign creditors with no
known addresses in the Philippines be individually given a
copy of the stay order at their foreign addresses;
(l) directing all creditors and all interested parties (including
the regulatory agencies concerned) to file and serve on the
debtor a verified comment on or opposition to the petition,
with supporting affidavits and documents, not later than
fifteen (15) days before the date of the first initial hearing and
putting them on notice that their failure to do so will bar them
from participating in the proceedings; and
(m) directing the creditors and interested parties to secure
from the court copies of the petition and its annexes within
such time as to enable themselves to file their comment on or
opposition to the petition and to prepare for the initial hearing
of the petition.
The issuance of a stay order does not affect the right to
commence actions or proceedings insofar as it is necessary to
preserve a claim against the debtor.
Section 8. Service of Stay Order on Rehabilitation Receiver. The petitioner shall immediately serve a copy of the stay
order on the rehabilitation receiver appointed by the court,
who shall manifest his acceptance or non-acceptance of his
appointment not later than ten (10) days from receipt of the
order.

(3) The property has depreciated to an extent that

the creditor is undersecured
(c) Upon showing the creditor's lack of adequate
protection, the court shall order the rehabilitation
receiver to (1) make arrangements to provide for the
insurance or maintenance of the property, or (2) to make
payments or otherwise provide additional or replacement
security such as that the obligation is fully secured. If
such arrangements are not feasible, the court shall
modify the stay order to allow the secured creditor
lacking adequate protection to enforce its claim against
the debtor; provided, however, that the court may deny
the creditor the remedies in this paragraph if such
remedies would prevent the continuation of the debtor as
a going concern or otherwise prevent the approval and
implementation of a rehabilitation plan.
Section 11. Qualifications of Rehabilitation Receiver. (a) In the appointment of the rehabilitation receiver, the
following qualifications shall be taken into consideration
by the court:
(1) Expertise and acumen to manage and operate a
business similar in size and complexity to that of the
debtor;
(2) Knowledge in management, finance
rehabilitation of distressed companies;

and

(3) General familiarity with the rights of creditors in

suspension of payments or rehabilitation and general
understanding of the duties and obligations of a
rehabilitation receiver;
(4) Good
integrity;

moral

character,

independence

and

(5) Lack of conflict of interest as defined in this

Section; and
(6) Willingness and ability to file a bond in such
amount as may be determined by the court.

Section 9. Period of Stay Order. - The stay order shall be

effective from the date of its issuance until the approval of
the rehabilitation plan or the dismissal of the petition.

(b) Without limiting the generality of the following, a

rehabilitation receiver may be deemed to have a
conflict of interest if:

Section 10. Relief from, Modification, or Termination of Stay

Order. -

(1) He is creditor or stockholder of the debtor;

(a) The court may, upon motion, terminate, modify, or set

conditions for the continuance of the stay order, or
relieve a claim from the coverage thereof upon showing
that (1) any of the allegations in the petition, or any of
the contents of any attachment, or the verification
thereof has ceased to be true; (2) a creditor does not
have adequate protection over property securing its
claims; (3) the debtor's secured obligation is more than
the fair market value of the property subject of the stay
and such property is not necessary for the rehabilitation
of the debtor; or (4) the property covered by the stay
order is not essential or necessary to the rehabilitation
and the creditor's failure to enforce its claim will cause
more damage to the creditor than to the debtor.
(b) For purposes of this Section, the creditor lacks
adequate protection if it can be shown that:
(1) The debtor fails or refuses to honor a pre-existing
agreement with the to keep the property insured;
(2) The debtor fails or refuses to take commercially
reasonable steps to maintain the property; or

(2) He is engaged in a line of business which

competes with the debtor;
(3) He is, or was within two (2) years from the filing
of the petition, a director, officer, or employee or the
auditor or accountant of the debtor;
(4) He is or was within two (2) years from the filing of
the petition, an underwriter of the outstanding
securities of the debtor;
(5) He is related by consanguinity or affinity within
the fourth civil degree to any creditor, stockholder,
director, officer, employee, or underwriter of the
debtor; or
(6) He has any other direct or indirect material
interest in the debtor or any creditor.
Section 12. Powers and Functions of Rehabilitation Receiver. The rehabilitation receiver shall not take over the
management and control of the debtor but shall closely

oversee and monitor the operations of the debtor during the

pendency of the proceedings. For this purpose, the
rehabilitation receiver shall have the powers, duties and
functions of a receiver under Presidential Decree No. 902-A,
as amended, and the Rules of Court.
The rehabilitation receiver shall be considered as an officer of
the court. He shall be primarily tasked to study the best way
to rehabilitate the debtor and to ensure that the value of the
debtor's property is reasonably maintained pending the
determination of whether or not the debtor should be
rehabilitated, as well as implement the rehabilitation plan
after its approval. Accordingly, he shall have the following
powers and functions:
(a) To verify the accuracy of the petition, including its
annexes such as the Schedule of Debts and Liabilities
and the Inventory of Assets submitted in support to the
petition;
(b) To accept and incorporate, when justified,
amendments to the Schedule of Debts and Liabilities;
(c) To recommend to the court the disallowance of claims
and rejection of amendments t the Schedule of Debts and
Liabilities that lack sufficient proof and justification;
(d) To submit to the court and make available for review
by the creditors, a revised Schedule of Debts and
Liabilities;
(e) To investigate the acts, conduct, properties, liabilities
and financial condition of the debtor, the operation of its
business and the desirability of the continuance thereof;
and, any other matter relevant to the proceeding or to
the formulation of a rehabilitation plan;
(f) To examine under oath the directors and officers of the
debtor and any other witnesses that he may deem
appropriate;
(g) To make available to the creditors documents and
notices necessary for them to follow and participate in
the proceedings;
(h) To report to the court any fact ascertained by him
pertaining to the causes of the debtor's problems, fraud,
preferences, dispositions, encumbrances, misconduct,
mismanagement and irregularities committed by the
stockholders, directors, management,, or any other
person against the debtor;
(i) To employ such person or persons such as lawyers,
accountants, appraisers and staff are necessary in
performing his functions and duties as rehabilitation
receiver;
(j) To monitor the operations of the debtor and to
immediately report to the court any material adverse
change in the debtor's business;
(k) To evaluate the existing assets and liabilities, earnings
and operations of the debtor;
(l) To determine and recommend to the court the best
way to salvage and protect the interests of the creditors,
stockholders and the general public;
(m) To study the rehabilitation plan proposed by the
debtor or any rehabilitation plan submitted during the
proceedings, together with any comments made thereon;
(n) To prohibit and report to the court any encumbrance,
transfer or disposition of the debtor's property outside of

the ordinary course of business or what is allowed by the

court;
(o) To prohibit and report to the court any payments
outside of the ordinary course of business;
(p) To have unlimited access to the debtor's employees,
premises, books, records and financial documents during
business hours;
(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;

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.
Section 24. Discharge of Rehabilitation Receiver. - Upon
termination
of
the
rehabilitation
proceedings,
the
rehabilitation receiver shall submit his final report and
accounting with such period of time as the court will allow
him. Upon approval of his report and accounting, the court
shall order his discharge.
RULE 4
DEBTOR-INITIATED REHABILITATION
Section 1. Who May Petition. - Any debtor who foresees the
impossibility of meeting its debts when they respectively fall
due, may petition the proper regional trial court for
rehabilitation.
A group of companies may jointly file a petition for
rehabilitation under these Rules when one or more of its
constituent corporations foresee the impossibility of meeting
debts when they respectively fall due, and the financial
distress would likely adversely affect the financial condition
and/or operations of the other member companies of the
group is essential under the terms and conditions of the
proposed rehabilitation plan.
Section 2. Contents of Petition. -

(c) Payments shall be made to the

accordance with the provisions of the plan;

creditors

in

(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

(a) The petition filed by the debtor must be verified and

must set forth with sufficient particularity all the following
material facts: (1) the name and business of the debtor;
(2) the nature of the business of the debtor; (3) the
history of the debtor; (4) the cause of its inability to pay
its debts; (5) all the pending actions or proceedings
known to the debtor and the courts or tribunals where
they are pending; (6) threats or demands to enforce
claims or liens against the debtor; and (7) the manner by
which the debtor may be rehabilitated and how such
rehabilitation may benefit the general body of creditors,
employees and stockholders.
(b) The petition shall be accompanied by the following
documents:
(1) An audited financial statement of the debtor at
the end of its last fiscal year;
(2) Interim financial statements as of the end of the
month prior to the filing of the petition;

(3) A Schedule of Debts and Liabilities which lists all

the creditors of the debtor, indicating the name and
last address of record of each creditor; the amount of
each claim as to principal, interest, or penalties due
as of the date of filing; the nature of the claim; and
any pledge, lien, mortgage judgement or other
security given for the payment thereof;
(4) An Inventory of Assets which must list with
reasonable specificity all the assets of the debtor,
stating the nature of each asset, the location and
condition thereof, the book value or market value of
the asset, and attaching the corresponding
certificate of title thereof in case of real property, or
the evidence of title or ownership in case of movable
property, the encumbrances, liens or claims thereon,
if any, and the identities and addresses of the
lienholders and claimants. The Inventory shall
include a Schedule of Accounts Receivable which
must indicate the amount of each, the persons from
who due, the date of maturity and the degree of
collectibility categorizing them as highly collectible
to remotely collectible;
(5) A rehabilitation plan which conforms with the
minimal requirements set out in Section 18 of Rule 3;
(6) A Schedule of Payments and Disposition of Assets
which the debtor may have effected within three (3)
months immediately preceding the filing of the
petition;
(7) A Schedule of Cash Flow of the debtor for three
(3) months immediately preceding the filing of the
petition, and a detailed schedule of the projected
cash flow for the succeeding three (3) months;
(8) A Statement of Possible Claims by or against the
debtor which must contain a brief statement of the
facts which might give rise to the claim and an
estimate of the probable amount thereof;
(9) An Affidavit of General Financial Condition which
shall contain answers to the questions or matters
prescribed in Annex "A" hereof;
(10) At least three (3) nominees for the position of
rehabilitation receiver as well as their qualifications
and addresses, including but not limited to their
telephone numbers, fax numbers and e-mail
address; and
(11) A certificate attesting under oath that (i) the
filing of the petition has been duly authorized; and
(ii) the directors and stockholders of the debtor have
irrevocably approved and/or consented to, in
accordance with existing laws, all actions or matters
necessary and desirable to rehabilitate the debtor
including, but not limited to, amendments to the
articles of incorporation and by-laws or articles of
partnership; increase or decrease in the authorized
capital stock; issuance of bonded indebtedness;
alienation, transfer, or encumbrance of assets of the
debtor; and modification of shareholders' rights.
(c) Five (5) copies of the petition shall be filed with the
court.
Section 3. Verification by Debtor. - The petition filed by the
debtor must be verified by an affidavit of a responsible officer
of the debtor and shall be in a form substantially as follows:
"I, ___________________, (position) of (name of petitioner), do
solemnly swear that the petitioner has been duly authorized
to file the petition and that the stockholders and board of
directors (or governing body) have approved and/or

consented to, accordance with law, all actions or matters

necessary or desirable to rehabilitate the debtor. The petition
is being filed to protect the interests of the debtor, the
stockholders, the inventors and the creditors of the debtor,
which warrant the appointment of a rehabilitation receiver.
There is no petition for insolvency filed with any other body,
court of tribunal affecting the petitioner. The Inventory of
Assets and the Schedule of Debts and Liabilities contains a
full, correct and true description of all debts and liabilities and
of all goods, effects, estate and property of whatever kind of
class belonging to petitioner. The Inventory also contains a
full, correct and true statement of all debts owing or due to
petitioner, or to any person or persons in trust for petitioner
and of all securities and contracts whereby any money may
hereafter become due or payable to petitioner or by or
through which any benefit or advantage may accrue to
petitioner. The petition contains a concise statement of the
facts giving rise, or which might give rise, to any cause of
action in favor of petitioner. Petitioner has no land, money,
stock, expectancy, or property of any kind, except those set
forth in the Inventory of Assets. Petitioner has, in no instance,
created or acknowledged a debt for a greater sum than the
true and correct amount. Petitioner, its officers, directors and
stockholders have not, directly or indirectly, concealed,
fraudulently sold or otherwise fraudulently disposed of, any
part of petitioner's real or personal property, estate, effects or
rights of action, and petitioner, its officers, directors and
stockholders have not in any way compounded with any of its
creditors in order to give preference to such creditors, or to
receive or to accept any profit or advantage therefrom, or to
defraud or deceive in any manner any creditor to whom
petitioner is indebted. Petitioner, its officers, directors, and
stockholders have been acting in good faith and with due
diligence.
Section 4. Opposition to or Comment on Petition. - Every
creditor of the debtor or any interested party shall file his
verified opposition to or comment on the petition not later
than fifteen (15) days before the date of the initial hearing
fixed in the stay order. After such time, no creditor or
interested party shall be allowed to 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
requirements specified in Section 18 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
requirements specified in Section 18 of Rule 3;

the

(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
approval of the plan.

receiver

has

recommended

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.

the

(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.

RULE 5
CREDITOR-INITIATED REHABILITATION
Section 1. Who May Petition. - Any creditor or creditors
holding at least twenty percent (20%) of the debtor's total
liabilities may file a petition with the proper regional trial
court for rehabilitation of a debtor that cannot meet its debts
as they respectively fall due.
Section 2. Requirements for Creditor-Initiated Petitions. Where the petition is filed by a creditor or creditors under this
Rule, it is sufficient that the petition is accompanied by a
rehabilitation plan and a list of at least three (3) nominees to
the position of rehabilitation receiver and verified by a sworn
statement that the affiant has read the petition and that its
contents are true and correct of his personal knowledge or
based on authentic records and that the petition is being filed

to protect the interests of the debtor, the stockholders, the

investors and the creditors of the debtor.
Section 3. Applicability of Provisions Relating to DebtorInitiated Rehabilitation. - The provisions of Sections 5 to 12 of
Rule 4 shall apply to rehabilitation under this Rule.
RULE
PRE-NEGOTIATED REHABILITATION

Section 1. Pre-negotiated Rehabilitation Plan. - A debtor that

foresees the impossibility of meeting its debts as they fall due
may, by itself or jointly with any of its creditors, file a verified
petition for the approval of a pre-negotiated rehabilitation
plan. The petition shall comply with Section 2 of Rule 4 and be
supported by an affidavit showing the written 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.
Section 2. Issuance of Order. - If the court finds the petition
sufficient in form and substance, it shall, not later than five
(5) working days from the filing of the petition, issue an order
which shall:
(a) Identify the debtor, its principal business
activity/ies and its principal place of business;

or

(b) Direct the publication of the order in a newspaper of

general circulation once a week for at least two (2)
consecutive weeks, with the first publication to be made
within seven (7) days from the time of its issuance;

that the stay order shall not cover foreclosure by a

creditor of property not belonging to a debtor under
corporate rehabilitation; provided, however, that where
the owner of such property sought to be foreclosed is
also a guarantor or one who is not solidarily liable, said
owner shall be entitled to be benefit of excussion as such
guarantor;
(i) Prohibit the debtor from selling, encumbering,
transferring, or disposing in any manner any of its
properties except in the ordinary course of business;
(j) Prohibit the debtor from making any payment of its
liabilities outstanding as of the date of filing of the
petition;
(k) Prohibit the debtor's suppliers of goods or services
from withholding supply of goods and services in the
ordinary course of business for as long as the debtor
makes payments for the services and goods supplied
after the issuance of the stay order;
(l) Direct the payment in full of all administrative
expenses incurred after the issuance of the stay order;
and
(m) Direct the payment of new loans or other forms of
credit accommodations obtained for the rehabilitation of
the debtor with prior court approval.
Section 3. Approval of Plan. - Within ten (10) days from the
date of the second publication of the order referred to in
Section 2 of this Rule, the court shall approve the
rehabilitation plan unless a creditor or other interested party
submits a verified objection to it in accordance with the next
succeeding section.

(c) Direct the service by personal delivery of a copy of

the petition on each creditor who is not a petitioner
holding at least five percent (5%) of the total liabilities of
the debtor, as determined in the schedule attached to
the petition, within three (3) days;

Section 4. Objection to Petition or Rehabilitation Plan. - Any

creditor or other interested party may submit to the court a
verified objection to the petition or the rehabilitation plan. The
objection shall be limited to the following:

(d) Direct the petitioner to furnish a copy of the petition

and its annexes, as well as the stay order, to the relevant
regulatory agency;

(a) The petition or the rehabilitation plan or their

attachments contain material omissions or are materially
false or misleading;

(e) State that copies of the petition and the rehabilitation

plan are available for examination and copying by any
interested party;

(b) The terms of rehabilitation are unattainable; or

(f) Direct creditors and other parties interested (including

the Securities and Exchange Commission and the
relevant regulatory agencies such as, but not limited to,
the Bangko Sentral ng Pilipinas, the Insurance
Commission,
the
National
Telecommunications
Commission, the Housing and Land Use Regulatory Board
and the Energy Regulatory Commission) in opposing the
petition or rehabilitation plan to file their verified
objections thereto or comments thereon within a period
of not later than twenty (20) days from the second
publication of the order, with a warning that failure to do
so will bar them from participating in the proceedings;
(g) Appoint the rehabilitation receiver named in the plan,
unless the court finds that he is not qualified under these
Rules in which case it may appoint a qualified
rehabilitation receiver of its choice;
(h) Stay enforcement of all claims, whether for money or
otherwise and whether such enforcement is by court
action or otherwise, against the debtor, its guarantors
and persons not solidarily liable with the debtor;
provided, that the stay order shall not cover claims
against
letters
of
credit
and
similar
security
arrangements issued by a third party to secure the
payment of the debtor's obligations; provided further,

(c) The approval or endorsement of creditors required

under Section 1 of this Rule has not been obtained
Copies of any objection to the petition or the rehabilitation
plan shall be served on the petitioning debtor and/or
creditors.
Section 5. Hearing on Objections. - The court shall set the
case for hearing not earlier than ten (10) days and no longer
than twenty (20) days from the date of the second publication
of the order mentioned in Section 2 of this Rule on the
objections is in accordance with the immediately preceding
section, it shall direct the petitioner to cure the defect within
a period fifteen (15) days from receipt of the order.
Section 6. Period for Approval of Rehabilitation Plan. - The
court shall decide the petition not later than one hundred
twenty (120) days from the date of the filing of the petition. If
the court fails to do so within said period, the rehabilitation
plan shall be deemed approved.
Section 7. Effects of Approval of Rehabilitation Plan. Approval of the rehabilitation plan under this Rule shall have
the same legal effect as approval of a rehabilitation plan
under Section 20 of Rule 3.

Section 8. Revocation of Approved Rehabilitation Plan. - Not

later than thirty (30) days from the approval of a
rehabilitation plan under this Rule, the plan may, upon motion
and after notice and hearing, be revoked on the ground that
the approval was secured by fraud or that the petitioner has
failed to cure the defect ordered by the court pursuant to
Section 5 of this Rule.
Section 9. Effect of Rule on Pending Petitions. - Any pending
petition for rehabilitation that has not undergone the initial
hearing prescribed under the Interim Rules of Procedure for
Corporate Rehabilitation at the time of the effectivity of these
Rules may be converted into a rehabilitation proceeding
under this Rule.
RULE 7
RECOGNITION OF FOREIGN PROCEEDINGS
Section 1. Scope of Application. - This Rule applies where (a)
assistance is sought in a Philippine court by a foreign court or
a foreign representative in connection with a foreign
proceeding; (b) assistance is sought in a foreign State in
connection with a domestic proceeding governed by these
Rules; or (c) a foreign proceeding and a domestic proceeding
are concurrently taking place.
The sole fact that a petition is filed pursuant to this Rule does
not subject the foreign representative or the foreign assets
and affairs of the debtor to the jurisdiction of the local courts
for any purpose other than the petition.
Section 2. Non-Recognition of Foreign Proceeding. - Nothing in
this Rule prevents the court from refusing to take an action
governed by this Rule if (a) the action would be manifestly
contrary to the public policy of the Philippines; and (b) if the
court finds that the country of which the petitioner is a
national does not grant recognition to a Philippine
rehabilitation proceeding in a manner substantially in
accordance with this Rule.
Section 3. Petition for Recognition of Foreign Proceeding. - A
foreign representative may apply with the Regional Trial Court
where the debtor resides for recognition of the foreign
proceeding in which the foreign representative has been
appointed.
A petition for recognition shall be accompanied by:
(a) A certified copy of the decision commencing the
foreign
proceeding
and
appointing
the
foreign
representative; or
(b) A certificate from the foreign court affirming the
existence of the foreign proceeding and of the
appointment of the foreign representative; or
(c) In the absence of evidence referred to in
subparagraph (a) and (b), any other evidence acceptable
to the court of the existence of the foreign proceeding
and of the appointment of the foreign representative.
Section 4. Recognition of Foreign Proceeding. - A foreign
proceeding shall be recognized if:
(a) The proceeding is a foreign proceeding as defined
herein;
(b) The person or body applying for recognition is a
foreign representative as defined herein; and
(c) The petition meets the requirements of Section 3 of
this Rule;

Section 5. Period to Recognize Foreign Proceeding. - A

petition for recognition of a foreign proceeding shall be
decided within thirty (30) days from the filing thereof.
Section 6. Notification to Court. - From the time of filing the
petition for recognition f the foreign proceeding, the foreign
representative shall inform the court promptly of:
(a) Any substantial change in the status of the foreign
proceeding or the status of the foreign representative's
appointment; and
(b) Any other foreign proceeding regarding the same
debtor
that
becomes
known
to
the
foreign
representative.
Section 7. Provisional Relief that May be Granted upon
Application for Recognition of Foreign Proceeding. - From the
time of filing a petition for recognition until the same is
decided upon, the court may, upon motion of the foreign
representative where relief is urgently needed to protect the
assets of the debtor or the interests of the creditors, grant
relief of a provisional nature, including:
(a) Staying execution against the debtor's assets;
(b) Entrusting the administration or realization of all or
part of the debtor's assets located in the Philippines to
the foreign representative or another person designated
by the court in order to protect and preserve the value of
assets that, by their nature or because of other
circumstances, are perishable, susceptible to devaluation
or otherwise in jeopardy;
(c) Any relief mentioned in Section 9(a)(1), (2) and (7) of
this Rule.
Section 8. Effects of Recognition of Foreign Proceeding. Upon recognition of a foreign proceeding:
(a) Commencement or continuation of individual actions
or individual proceedings concerning the debtor's assets,
rights, obligations or liabilities is stayed; provided, that
such stay does not affect the right to commence
individual actions or proceedings to the extent necessary
to preserve a claim against the debtor.
(b) Execution against the debtor's assets is stayed; and
(c) The right to transfer, encumber or otherwise dispose
of any assets of the debtor is suspended.
Section 9. Relief That May be Granted After Recognition of
Foreign Proceeding. (a) Upon recognition of a foreign proceeding, where
necessary to protect the assets of the debtor or the
interests of the creditors, the court may, upon motion of
the foreign representative, grant any appropriate relief
including:
(1) Staying the commencement or continuation of
individual
actions
or
individual
proceedings
concerning the debtor's assets, rights, obligations or
liabilities to the extent they have not been stayed
under Section 8(a) of this Rule;
(2) Staying execution against the debtor's assets to
the extent it has not been stayed under Section 8(b)
of this Rule;
(3) Suspending the right to transfer, encumber or
otherwise dispose of any assets of the debtor to the

extent this right has not been suspended under

Section 8(c) of this Rule;

(b) Communication of information

considered appropriate by the court;

(4) Providing for the examination of witnesses, the

taking of evidence or the delivery of information
concerning the debtor's assets, affairs, rights,
obligations or liabilities;

(c) Coordination of the administration and supervision of

the debtor's assets and affairs;

(5) Entrusting the administration or realization of all

or part of the debtor's assets located in the
Philippines to the foreign representative or another
person designated by the court;
(6) Extending the relief granted under Section 7 of
this Rule;
(7) Granting any additional relief that may be
available to the rehabilitation receiver under these
laws.
(b) Upon recognition of a foreign proceeding, the court
may, at the request of the foreign representative, entrust
the distribution of all or part of the debtor's assets
located in the Philippines to the foreign representative or
another person designated by the court; provided that
the court is satisfied that the interests of local creditors
are adequately protected.
Section 10. Protection of Creditors and Other Interested
Persons. (a) In granting or denying relief under this Rule or in
modifying or terminating the relief under paragraph (c) of
this Section, the court must be satisfied that the interests
of the creditors and other interested persons, including
the debtor, are adequately protected.
(b) The court may subject the relief granted under
Section 7 or Section 9. Of this Rule to conditions it
considers appropriate.
(c) The court may, upon motion of the foreign
representative or a person affected by the relief granted
under Section 7 or Section 9 of this Rule, or on its own
motion, modify or terminate such relief.
Section 11. Actions to Avoid Acts Detrimental to Creditors. Upon recognition of a foreign proceeding, the foreign
representative acquires the standing to initiate actions to
avoid or otherwise render ineffective acts detrimental to
creditors that are available under these Rules.
Section 12. Intervention by Foreign Representative in
Philippine Proceedings. - Upon recognition of a foreign
proceeding, the foreign representative may intervene in any
action or proceeding in the Philippines in which the debtor is a
party.

by

any

means

(d) Approval or implementation by courts of agreements

concerning the coordination of proceedings;
(e) Coordination of concurrent proceedings regarding the
same debtor;
(f) Suspension of proceedings against the debtor;
(g) Limiting the relief of assets that should be
administered in a foreign proceeding pending in a
jurisdiction other than the place where the debtor has its
principal place of business (foreign non-main proceeding)
or information required in that proceeding; and
(h) Implementation of rehabilitation or re-organization
plan for the debtor.
Nothing in this Rule limits the power of the court to provide
additional assistance to the foreign representative under
other applicable laws.
Section 15. Commencement of Local Proceeding after
Recognition of Foreign Proceeding. - After the recognition of a
foreign proceeding, a local proceeding under these Rules may
be commenced only if the debtor is doing business in the
Philippines, the effects of the proceedings shall be restricted
to the assets of the debtor located in the country and, to the
extent necessary to implement cooperation and coordination
under Sections 13 and 14 of this Rule, to the other assets of
the debtor that, under local laws, must be administered in
that proceeding.
Section 16. Local and Foreign Proceedings. - Where a foreign
proceeding and a local proceeding are taking place
concurrently regarding the same debtor, the court shall seek
cooperation and coordination under Section 13 and 14 of this
Rule. Any relief granted to the foreign proceeding must be
made consistent with the relief granted in the local
proceeding.
RULE 8
PROCEDURAL REMEDIES
Section 1. Motion for Reconsideration. - A party may file a
motion for reconsideration of any order issued by the court
prior to the approval of the rehabilitation plan. No relief can
be extended to the party aggrieved by the court's order on
the motion through a special civil action for certiorari under
Rule 65 of the rules of Court. Such order can only be elevated
to the Court of Appeals as an assigned error in the petition for
review of the decision or order approving or disapproving the
rehabilitation plan.

Section 13. Cooperation and Direct Communication with

Foreign Courts and Foreign Representatives. - In matters
covered by this Rule, the court shall cooperate to the
maximum extent possible with foreign courts or foreign
representatives.

An order issued after the approval of the rehabilitation plan

can de reviewed only through a special civil action for
certiorari under Rule 65 of the Rules of Court.

The court is entitled to communicate directly with, or request

information or assistance directly from, foreign courts or
foreign representatives.

Section 2. Review of Decision or Order on Rehabilitation Plan.

- an order approving or disapproving a rehabilitation plan can
only be reviewed through a petition for review to the Court of
Appeals under Rule 43 of the Rules of Court within fifteen (15)
days from notice of the decision or order.

Section 14. Forms of Cooperation. - Cooperation may be

implemented by any appropriate means, including but not
limited to the following:
(a) Appointment of a person or body to act at the
discretion of the court;

RULE 9
FINAL PROVISIONS

Section 1. Severability. - If any provision or section of these

Rules is held invalid, the other provisions or sections shall not
be affected thereby.

(f) made or been a party to any settlement of

property in favor of any person?

Section 2. Transitory Provision. - Unless the court orders

otherwise to prevent manifest injustice, any pending petition
for rehabilitation that has not undergone the initial hearing
prescribed under the Interim Rules of Procedure for Corporate
Rehabilitation at the time of the effectivity of these Rules shall
be governed by these rules.

(19) Has the debtor recorded all sales or dispositions of

assets?

Section 3. Effectivity. - These Rules shall take affect on 16

January 2009 following its publication in two (2) newspapers
of general circulation in the Philippines.
ANNEX "A"
AFFIDAVIT OF GENERAL FINANCIAL CONDITION
(1) Are you an officer of the debtor referred to in these
proceedings?
(2) What is your full name and what position do you hold
in the debtor?
(3) What is the full name of the debtor and what is the
address of its head office?

If, so, give particulars.

(20) What were the sales for the last three years and
what percentage of the sales represented the profit or
markup?
(21) What were the profits or losses for the debtor for the
last three years?
(22) What are the causes of the problems of the debtor?
Please provide particulars?
(23) When did you first notice these problems and what
actions did the debtor take to rectify them?
(24) How much do you estimate is needed to rehabilitate
the debtor?
(25) Has any person expressed interest in investing new
money into the debtor?
(26) Are there any pending and threatened legal actions
against the debtor? If so, please provide particulars.

(5) When did the debtor commence business?

(27) Has the debtor discussed any restructuring or

repayment plan with any of the creditors? Please provide
status and details.

(6) What is the nature of its business? What is the market

share of the debtor in the industry in which it is engaged?

(28) Has any creditor expressed interest in restructuring

the debts of the debtor? If so, please give particulars.

(7) Who are the parties, members, or stockholders? How

many employees?

(29) Have employees' wages and salaries been kept

current? If not, how much are in arrears and what time
period do the arrears represent?

(4) When was it formed or incorporated?

(8) What is the capital of the debtor?

(9) What is the capital contribution and what is the
amount of the capital, paid and unpaid, of each of the
partners or shareholders?
(10) Do any of these people hold the shares in trust for
others?
(11) Who are the directors and officers of the debtors?
(12) Has the debtor any subsidiary corporation? If so,
give particulars?
(13) Has the debtor properly maintained its books and
are they updated?
(14) Were the books audited annually?
(15) If so, what is the name of the auditor and when was
the last audited statement drawn up?
(16) Have all proper returns been made to the various
government agencies requiring same?
(17) When did the debtor first become aware of its
problems?
(18) Has the debtor within the twelve months preceding
the filing of the petition:
(a) made any payments, returned any goods or
delivered any property to any of its creditors, except
in the normal course of business?
(b) executed any mortgage, pledge, or security over
any of its properties in favor of any creditor?
(c) transferred or disposed of any of its properties in
payment of any debt?
(d) sold, disposed of, or removed any of its property
except in the ordinary course of business?
(e) sold any merchandise at less than fair market
value or purchased merchandise or services at more
than fair market value?

(30) Have obligation to the government and its agencies

been kept current? If not, how much are in arrears and
what time period do the arrears represent?