WHAT

WHO

WHEN

VALUE

WHEN DENIED

MODES

QUORUM

VOTE
 AUTOMATIC STAY

SUSPENSION OF
PAYMENTS
ORDER

INJUNCTION

ORDER
SUSPENDING
EXECUTION
 Suspension of Payments

Judicial insolvency proceeding where an individual debgtor submits, for

approval by his creditors, a proposed agreement containing propositions
delaying or extending the time of his debts.

Individual (Natural Person) Debtor

Illiquidity Concept of Insolvency

OR

Equity Concept of Insolvency

No value requirement

Not Illiquid

Liabiliies do not Exceed Assets

Court proceeding

Value of Claims: 3/5 of total liabilities

Number of Creditors Present: 2/3 of creditors
Value of Claims: 3/5 of total liabilities
Secured Creditors: Not Covered

Unsecured Creditor: Covered

Selling, transferring, enxumbering, or disposing, in any manner, of his

property; EXCEPT those used in the ordinary operations of commerce or of
industry in which the individual debtor is engaged

Making any payment outside of the necessary of the necessary or legitimate

expenses of his business or industry

Suspension of Exection: Property held as security is not covered

 Rehabilitation
Process (court-supervised, pre-negotiated, out-of-court) reorganizing a
debtor's financial affairs, so that a debtor may continue to exist as a financial
entity, with the creditors satisfying their claims from the debtor's future
earnings
Juridical Person-Debtor (Corporation, Partnership, Sole Proprietorship)

Economic Feasibility: restoration of the debtor to a condition of successful

operation shown through thorough analysis and examination based on
assumptions made and financial goals stated in the Rehabilitation Plan

AND
Present Value Recovery: creditors can recover by way of present value of
payments projected in the plan, more if the debtor continues as a going
concern than immediately liquidated
Involuntary court-supervised: ₱1M or at least 25% of subscribed capital stock
(or partnership contributions) whichever is higher

Insolvency appears to be irreversible and the sole purpose of the debtor is to

delay the enforcement of any of the rights of the creditors

Court-supervised Rehabilitation
Pre-negotiated Rehabilitation
Out-of Court Rehabilitation
Secured Creditors: Covered

Unsecured Creditors: Covered

Prohibiting the sale, encumbrance, transfer, or disposal in any manner of any

of its properties except in the ordinary course of business, that is in the pursuit
of the debtor's business operations prior to rehabilitation proceedings and on
ordinary business terms
Prohibiting any payment of its liabilities outstanding as of the commencement
date except as provided in the FRIA

Suspension of judgments, attachment, or other provisional remedy

(a) Debtor has assets that can generate more
cash if used in its daily operations than if sold

(b) Liquidity can be addressed by a practicable

business plan that will generate enough cash
to sustain daily operations

(c) Debtor has a definite source of financing

for the proper and full implementation of a
R/P that is anchored on realistice assumptions
and goals

(a) Absence of a sound and workable business

plan
(b) Baseless and unexplained assumptions,
targets, and goals

(c) Speculative or complete lack of capital

infusion for the execution of the business plan

(d) Cash flow cannot sustain daily operations

(e) Negative net worth and assets that are

nearly or fully depreciated
Suspending all actions or proceedings in court
or otherwise for the enforement of claims
against the debtor

Suspending all actions to enforce any

judgment, attachment, or other provisional
remedy STAY OR SUSPENSION
ORDER

INJUNCTION