LAW AND BUSINESS: By Atty. Maricar N. San Jose

The effects of the 1997 currency crisis are still being felt by companies and businessmen today. The foreclosures and cases seeking to prevent these foreclosures are mostly offshoots of ventures that went sour due to the 1997 Asian currency crash.

As a practicing lawyer engaged mostly in commercial litigation from day one that I became licensed to do so, I have observed that debtors seem to prefer injunction cases – preventing banks and other creditors from foreclosing, or if foreclosure has been completed, from taking over their properties.

Civil cases seeking annulment of foreclosures with the remedy of temporary restraining orders/injunction clog courts. Seldom do these cases result in the continuation of the business, or the recovery of the property. In most cases, the delay only further increased interests and penalties.

What then are the options available to debtors? I decided to start with a series of articles on the remedies available to debtors. These remedies, however, do not guarantee that their problems will suddenly vanish or their properties saved. These are only options to be exercised after a debtor weighs the pros and cons of each.

To be continued…

The author is a partner at the Jaraula Evangelista San Jose & Apita Law Offices. A graduate of the Ateneo de Manila University School of Law in 1999, she teaches Commercial Law Review, Special Commercial Laws, Constitutional and Family Law at Xavier University College of Law. She may be reached for comments by email at maricarsj@hotmail.com.

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The effects of the 1997 currency crisis are still being felt by companies and businessmen today. The foreclosures and cases seeking to prevent these foreclosures are mostly offshoots of ventures that went sour due to the 1997 Asian currency crash.

As a practicing lawyer engaged mostly in commercial litigation from day one that I became licensed to do so, I have observed that debtors seem to prefer injunction cases – preventing banks and other creditors from foreclosing, or if foreclosure has been completed, from taking over their properties.

Civil cases seeking annulment of foreclosures with the remedy of temporary restraining orders/injunction clog courts. Seldom do these cases result in the continuation of the business, or the recovery of the property. In most cases, the delay only further increased interests and penalties.

What then are the options available to debtors? I decided to start with a series of articles on the remedies available to debtors. These remedies, however, do not guarantee that their problems will suddenly vanish or their properties saved. These are only options to be exercised after a debtor weighs the pros and cons of each.

To be continued…

The author is a former partner of the Jaraula Evangelista San Jose & Apita Law Offices. A graduate of the Ateneo de Manila University School of Law in 1999, she teaches Commercial Law Review, Special Commercial Laws, Constitutional and Family Law at Xavier University College of Law. She may be reached for comments by email at maricarsj@hotmail.com.

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The Supreme Court promulgated the Interim Rules on Corporate Rehabilitation in 2000 to govern the procedure in the Regional Trial Court on cases filed under Presidential Decree 902-A which were transferred to regular courts from the Securities and Exchange Commission (SEC). The key objective of the Rules was to encourage the rehabilitation of viable enterprises facing the threat of insolvency in the country and to avoid closures because of prolonged litigation.

Corporate Rehabilitation is, of course, only for corporations or partnerships and associations. It is not available to single proprietorships or individuals.  Only corporations in distress may apply for rehabilitation. To be considered distressed, it need not be insolvent, but merely illiquid. In other words, it has sufficient assets and properties, but cannot convert them into cash at the maturity of its obligations.

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The Supreme Court promulgated the Interim Rules on Corporate Rehabilitation in 2000 to govern the procedure in the Regional Trial Court on cases filed under Presidential Decree 902-A which were transferred to regular courts from the Securities and Exchange Commission (SEC). The key objective of the Rules was to encourage the rehabilitation of viable enterprises facing the threat of insolvency in the country and to avoid closures because of prolonged litigation.

Corporate Rehabilitation is, of course, only for corporations or partnerships and associations. It is not available to single proprietorships or individuals.  Only corporations in distress may apply for rehabilitation. To be considered distressed, it need not be insolvent, but merely illiquid. In other words, it has sufficient assets and properties, but cannot convert them into cash at the maturity of its obligations.

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LAW AND BUSINESS: By Atty. Maricar N. San Jose

The effects of the 1997 currency crisis are still being felt by companies and businessmen today. The foreclosures and cases seeking to prevent these foreclosures are mostly offshoots of ventures that went sour due to the 1997 Asian currency crash.

As a practicing lawyer engaged mostly in commercial litigation from day one that I became licensed to do so, I have observed that debtors seem to prefer injunction cases – preventing banks and other creditors from foreclosing, or if foreclosure has been completed, from taking over their properties.

Civil cases seeking annulment of foreclosures with the remedy of temporary restraining orders/injunction clog courts. Seldom do these cases result in the continuation of the business, or the recovery of the property. In most cases, the delay only further increased interests and penalties.

What then are the options available to debtors? I decided to start with a series of articles on the remedies available to debtors. These remedies, however, do not guarantee that their problems will suddenly vanish or their properties saved. These are only options to be exercised after a debtor weighs the pros and cons of each.

To be continued…

The author is a partner at the Jaraula Evangelista San Jose & Apita Law Offices. A graduate of the Ateneo de Manila University School of Law in 1999, she teaches Commercial Law Review, Special Commercial Laws, Constitutional and Family Law at Xavier University College of Law. She may be reached for comments by email at maricarsj@hotmail.com.

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