Saturday, November 17, 2012

Coroporate Rehabilitation; Requisites for creation of a ManagementCommittee and appointment of a Receiver, Extent of the Powers andFunctions of a Receiver


What are the requisites before a Management Committee can be created and a Receiver are appointed by the Regional Trial Court?

ANSWER:

(a.)         He Must show that the corporate property is in danger of being wasted and destroyed;
(b.)         That the business of the corporation is being diverted from the purpose for which it has been organized;
(c.)         That there is a serious paralyzation of operations all to his detriment.

In the absence of a strong showing of an imminent danger of disposition, loss, wastage, or destruction of assets or other properties of a corporation and paralysis of its business operations, the mere apprehension of future misconduct based upon prior mismanagement will not authorize the appointment of a Management Committee/Receiver. (Sy Chim vs. Siy Hi & Sons, Inc., 480 SCRA 465 [2006]).


 What is the extent of the power and function of a Rehabilitation Receiver?

ANSWER:

            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. x x x

            He shall be considered as an officer of the court.  And 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. (Section 12, A.M. No. 00-8-10-SC, Rules of Procedure on Corporate Rehabilitation)

No comments:

Post a Comment