I'm Giancarlo Enrico S. Pozon, a Wushu instructor, investor and Barrister... That's right, Barrister; I graduated from law school and took the Bar Exams, now I'm waiting for the results. I created this blog to make Philippine Law easy to understand for the average person. It's all about free legal advice. There are many law blogs. But the problem is that many of them are written for lawyers and law students. They use words that can't be understood by ordinary people.
Many lawyers, judges and law students consider themselves as superior to most human beings because of their knowledge of the law. It bothers me since the law is supposed to serve society. Since the law is meant to serve society as a whole, it is important that is must be understood by everybody.
This does not mean that we should all become lawyers. It means that although law is a highly specialized profession, the first duty of everybody in this profession is to make the law understandable to all; that's why all these articles are free legal advice.
Like I said, this blog is about law -but it's for the ordinary people, not the lawyers. It's for the ordinary folk so they will know what is good and bad for them, and that making them aware of the law will help us all improve society as a whole. This is free legal advice for everybody!
Now let's go a little more into the proceedings under the FRIA.
FRIA proceedings are, by nature, in rem, summary and non-adversarial. Once notice of the commencement of the proceedings is published in a newspaper of general circulation, jurisdiction over all persons affected by the proceedings can now be properly acquired.
The following things must be kept in mind:
1.) Certainty and predictability in commercial affairs must be ensured and maintained
2.) The value of the debtor's assets must be preserved and maximized
3.) The rights of the creditors must be respected
4.) Creditors who are similarly situated must be treated equitably
5.) Priority of claims must be respected
Debtor
A debtor can either be an individual person or a group of debtors. A group of debtors can consist of the following:
1.) A collection of single proprietorships owned by the same person
2.) A group of partnerships where more than 50% of each one is owned by the same person
3.) Corporations financially related to each other (affiliates, subsidiaries, or parent corporations)
The following are not considered debtors under the FRIA because their rehabilitation comes under other laws:
1.) Banks (or quasi-banks)
2.) Insurance Companies
3.) Pre-need Companies
4.) LGUs and national government agencies
Government-owned financial institutions which aren't banks or quasi-banks and GOCCs are covered by FRIA unless their charters say otherwise.
If rehabilitaion isn't feasible, the rehab can be converted into a liquidation.
There are 2 kinds of creditors: secured and unsecured. Secured creditors are creditors whose claims are secured by a lien. An unsecured creditor is one whose claim (or a portion of it) isn't secured. There is also what is known as a "general unsecured creditor." This type has a claim (or part of it) that is neither secured, preferred nor subordinated under the FRIA.
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