Rfbt Special Topics
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RFBT: Special Topics MATALUBOS, REYDEN MEIR.
BS ACCOUNTANCY 4
1. Anti-Money Laundering Law (AMLA) – R.A. 9160
Declaration of Policy
It is hereby declared the policy of the state to protect and preserve the integrity and confidentiality of bank accounts and to ensure that the Philippines shall not be used as a money laundering site for the proceeds of any unlawful activity.
Definition
Money Laundering – is committed by any person who knowingly that any monetary instrument or property represents, involves, or relates to the proceeds of any unlawful activity.
I. Covered Transactions
A transaction in cash or other equivalent monetary instrument exceeding Five Hundred Thousand pesos (Php 500,000.00). A transaction exceeding One Miliion pesos (Php 1,000,000.00) in cases of jewelry dealers in precious meatals and dealers in precious stones.
II. Suspicious Transactions
1.) No underlying legal or trade obligation or economic justification
2.) The client is not properly identified
3.) The amount involved is not commensurate with business financial capacity
4.) the transaction is structured to avoid being the subject of reporting requirements in AMLA.
5.) Transactions which is observed to deviate from the profile of the client
6.) Any transactions that is similar , analogous or identical to any of the foregoing.
III. Covered persons required to report AMLC
1. ) Banks , Pawnshops, Money Changers, Remittance Centers, and all other entity regulated by BSP.
2.) Insurance Companies, Holdings, Insurance Brokers and other entity regulated by Insurance Commissions.
3.)Securities Dealers , brokers, salesmen, investment houses, and other entity regulated by SEC.
IV. Persons excluded to report transactions to AMLC
1. Lawyers, if acting as independent legal professionals in relation to its client.
2. Certified Public Accountants, if acting as independent legal professionals in relation to its client.
V. Transaction Reporting
Covered persons shall report to the AMLC all covered transactions and suspicious transactions within five (5) working days , unless the AMLC prescribes any period not exceeding fifteen (15) working days from occurrence (date discovery not date of transaction)
VI. Freeze Order
The Court of Appeals may issue a freeze order which shall be effective immediately and shall not exceed six (6) months .
Notwithstanding with R.A. 1405, AMLC may inquire or examine any particular deposit or account upon order of Court of Appels based on exparte application.
VII. Can AMLC may inquire into bank account without court order ?
Predicate crimes may authorize AMLC to inquire bank accounts even without Court order from Court of Appeals such as the ff.:
1. Kidnapping for Ransom
2. R.A. 9165
3. Hijacking, destructive arson, murder
4. Felonies
5. Terrorism, Financing and conspiracy to commit terrorism.
QUIZ
1. Which of the following is a covered person, therefore required to report to AMLC reportable or suspicious transactions.
A. Stock Brokers
B. Lawyers acting as independent legal counsel
C. CPA, acting as independent external auditor
D. None of the Above
2. Quasi banks , insurance agents , dealers of securities and brokers are not required to report to AMLC any suspicious transactions since they are covered persons to report.
ANSWER: A. Stock Brokers
FALSE. They are required.
3. Regional Trial Court shall have the jurisdiction of money laundering cases committed by public officers.
False. Sandiganbayan have jurisdiction in this case.
2. Financial Rehabilitation and Insolvency Act (FRIA) – R.A. 10142
Definition of Insolvency
Insolvency shall refer to (1) the financial condition of the debtor that is generally unable to pay its liabilities as they fall due in the ordinary course of business or (2) financial condition of a debtor when he has liabilities greater than his assets.
I. Suspension of Payments
An individual debtor who has sufficient property to cover all his debts but foresees the impossibility of meeting them may file a petition that he should be declared in the State of Suspension of Payments by the court of the city or province attaching his
1. Schedule of Debts and Liabilities
3. Proposed agreement with Creditors
2. Inventory of Assets
I.A. Effect of Suspension of payments
1.) Creditors will be called for meeting and be directed to present written evidence of their claims.
2.) Publication, within 7 days from issuance of order, in a newspaper in general circulation once a week for two consecutive week,.
3.) Forbidding the individual debtor from disposing of his property and making any payment outside of the necessary expenses.
4.) The creditor cannot sue to collect claims from debtor except for the secured creditors (secured property are not subject to suspension order.
5.) The order shall lapse when three (3) months have passed, no proposed agreement have been accepted or such is denied.
I.B. Approval and Rejection of Suspension Order
1. The presence of creditors holding at least three-fifths (3/5) of the liabilities shall constitute a quorum for approval of order.
2. Double Majority Rule: To approve the proposal of insolvent debtor the vote of a.) at least 2/3 of the creditors are required and b.) the claims represented by said majority constitute at least 3/5 of the total liabilities of the debtor.
3. The proposed agreement is deemed rejected when the quorum for meeting was not met or if it was met, double majorities for the approval of proposed agreement have not been met achieved.
4.) If approved, the court shall order that the agreement shall be carried and creditors shall be bound by its terms.
5.) If rejected , all rights which the creditors had before the order shall revert to them and the creditor may be made subject to the insolvency proceedings established by this act.
II. Voluntary Liquidation by Insolvent Individual Debtor
Voluntary Liquidation is initiated by the debtor itself. An individual debtor whose properties are not sufficient to cover his liabilities and owing debts exceeding Five Hundred Thousand pesos (Php 500,000.00) , may apply to be discharged from his debts by filling a petition with the court of the province he resided by attaching
a.) schedule of his debts and liabilities and
b.) inventory of his assets.
If the court finds the petition sufficient in form and substance, it shall issue the Liquidation Order within five (5) working days.
III. Involuntary Liquidation by Insolvent Debtor
This application is initiated by any creditor or group of creditors with a claim , or with claims aggregating at least Five Hundred thousand pesos (Php 500,000.00) may file a verified petition for liquidation with court of the province or city in which the individual debtor resides.
iii.1. Acts of Insolvency which must be alleged by the creditors in the petition
1. The creditor is about to depart or being absent with intent to defraud his creditors
2. That he conceals himself to avoid the service of legal process or is removing any of his property to avoid being attached on legal process.
3. That he has suffered his property for purpose of hindering or delaying the liquidation.
4. That he has transferred by gift, sale, assignment grant or transfer to his estate his properties in contemplation of insolvency.
5. That being a tradesman, he has generally defaulted in the payment of his obligations for a period of (30) days.
iii.2. Effects of Involuntary Liquidation
Upon filling such creditor’s petition, the court shall issue a Show Cause order requiring the individual debtor to show cause, at a time any place fixed by the court, why he should not be adjudged an insolvent.
Upon showing of good cause, the court may issue Order forbidding the individual debtors from making any payments of any debts and transferring his property. This order shall not impair the rights of a secured creditor to enforce his lien.
If after trial , the issues are found in favor of creditors , the court shall issue the Liquidation Order.
IV. Corporate Rehabilitation
Definition of Terms
Rehabilitation shall refer to the restoration of the debtor to a condition of successful operation and solvency, if it was shown that its continuance of operation is economically feasible and its creditors can recover by way of the present payments projected in the plan, more if the debtor continues as a going concern than if it is immediately liquidated.
Rehabilitation Plan shall refer to any plan by which the financial well-being and viability of an insolvent debtor can be restored using various means such as Debt forgiveness, debt restructuring, reorganization, dacion en pago and sale of business or setting up a new business or other similar arrangements as may be approved by the court or creditors.
IV.1. Court-Supervised Rehabilitation
1. Voluntary Court-Supervised Rehabilitation
Must approved by the owner or by majority of the partners or majority of BOD , authorized by stockholder rep. 2/3 outstanding capital stock.
GROUNDS
1. The debtor is generally unable to pay its or his liabilities as they fall due in ordinary course of business
2. The debtor has liabilities that are greater than his assets
2. Involuntary Court supervised Rehabilitation
Any group of creditors with a claim of aggregate of at least One Million Pesos (Php 1,000,000.00) or at least 25% of the subscribed capital or partners contribution , may initiate involuntary proceedings against the debtor by filing petition for rehabilitation.
IV.2. Court Action on Petition for Rehabilitation
If the court finds the petition for rehabilitation to be sufficient in form and substance , it shall issue a Commencement Order within 5 working days from filling of petition. The rehabilitation proceeding shall commence upon the issuance of the Commencement Order.
The rehabilitation proceedings of an insolvent debtor shall commence upon issuance by the rehabilitation court of Commencement order which shall include among other a Stay order or suspension order.
IV.3. Effects of Issuance by Rehabilitation court of stay or suspension order
It shall suspend all actions or proceedings for the enforcement of claims against the debtor.
It shall suspend all actions to enforce any judgement , attachment or other provisional remedies against the debotor.
It shall prohibit the debtor from alienating his property.
It shall prohibit the debtor from making any payment , except for the right of a secured creditor which would not be impair by this act.
Approval of the Rehabilitation Plan The plan shall be deemed rejected unless approved by all classes of creditors whose right are adversely modified or affected by the plan. The plan is said to be deemed approved by class of creditors if members of said class holding more than fifty (50%) of the total claims of said class vote for its favor.
Other types of Rehabilitation
1. Pre-negotiated Rehabilitation
2. Out-of-Court
QUIZ (True or false)
An individual debtor who possess insufficient property to cover all his debts and foresees the impossibility of meeting them may file a petition that he be declared in the state of suspension of payments.
The Involuntary rehabilitation must be approved by the owner in case of sole business, majority of partners in case of partnership and majority vote of BOD and authorized vote stockholders representing 2/3 of OC.
False. “sufficient”
False. Voluntary Rehabilitation
Besh Corp has total 1.5M worth of debt to A,B,C,D,E and F (each has collectible of Php 250,000 to Besh Corp). After having acquired evidence which is a valid ground, A, B and C can initiate for involuntary proceedings by filing a petition for rehabilitation.
False. The aggregate debts of A , B, and C is only 750,000 (the 1m threshold was not met.)
3. Intellectual Property – R.A. 8293 I.
Patents is a exclusive right granted for product , process or an improvement of a product or process which is new, inventive and useful. This exclusive rights gives the creditor the right to exclude others from making, using, or selling the product invention during the life of patents.
MODES OF CREATION
LAW ON PATENTS
It must be registered with IPO to be protected by law.
TERM OF PATENTS
A patent has a term of protection for 20 years providing an investor significant commercial gain.
Requisites of Patentable Inventions
1. It must be a technical solution to a problem in any field of human activity.
2. It must be new (novelty). An invention is not considered new if it forms part of the prior art.
3. It must involve an inventive step. An invention involves an inventive step when , having regard with prior art , it is not obvious to a person skilled in the art at the time of filing.
4. It must be industrially applicable, meaning it can be produced and used in any industry.
Non-Patentable Inventions
1. Discoveries, scientific theories and mathematical methods. 2. Schemes , rules and methods of performing mental acts, playing games or doing business and programs for computers. 3. Method for treatment of the human or animal body by surgery or therapy. 4. Aesthetic Creations 5. Anything which is contrary to public order or morality.
FIRST TO FILE RULE
If two or more persons have made the invention separately and independently of each other, the right to the patent shall belong to the person who filed an application for the same invention first.
TEST OF PATENT INFRINGEMENT
1. Literal Infringement – The court must juxtapose the claims of the patent and the accused product within the overall context of the claims and specifications, to determine whether there is exact identity of all material elements.
2. Doctrine of Equivalent infringement- Infringement also takes place when a device appropriates a prior invention by incorporating its innovative concept and although some modification and change, it performs substantially the same function in the same with same results.
II. The on Trademarks and Trade Names
DEEINITION
MODES OF CREATION OF RIGHT
Trademark – visible sign capable of distinguishing the goods of an enterprise and shall include a stamped or marked container of services. Trademarks, service mark and collective mark must be registered with IPO to be protected by law while trade name need not to be registered.
TERMS OF TRADEMARK AND SERVICE MARK
It has a term of 10 years but subject to unlimited renewal . Therefore it has indefinite life.
Test of Trademark Infringement
1. Dominancy Test – Infringement takes place when the competing trademark contains the essential features of another . Imitation or an effort to imitate is unnecessary. The question is whether the use of the marks is likely to cause confusion or deceive purchase.
2. Holistic Test – it considers the entirety of the marks , including labels and packaging , in determining confusing similarity . The focus is not only on the predominant words but also on other features appearing on the labels.
III. The Law on Copyright
COPYRIGHT – It is a legal protection extended to the owner of the rights in an original work.
MODE OF CREATION A RIGHT – From the moment of creation without the need or form of expression. Works are protected by sole fact of their creation , irrespective of their mode or form of expression.
TERM OF COPYRIGHT – The term of protection of copyright for original and derivative works is the life of the author plus (50) years after his death. The terms shall begin on the first day of January of subsequent year following the death.
Infringement of Copyright
It consist in infringing any right secured or protected under the code. It may also consist in aiding or abetting such infringement. The law also provides for the liability of a person who at the time when copyright subsists in a work, he know or ought to know , the infringing copy of the work for the purpose of
1. Selling or exposing the work for trade
2. Distributing the article for the purpose of trade to the prejudice the rights of the copyright owner.
3. Trade exhibit of the article in public.
QUIZ
The first to file rule is also applicable for registration of trademarks and copyrights.
False. There’s no such thing
The court founds out that the entire trademarks of JOLLYME Products including the packaging , labelling and business structure are very similar to registered trademarks of JOLLIBEE. Neneng, a loyal customer of JOLLIBEE even confused with two fast foods that she unintentionally had dined in at JOLLYME . A holistic test had aided the court to test the infringement.
True.
Philippine Deposit Insurance Corporation Law (R.A. 10846)
PDIC is a government instrumentality created by bvirtue of this act to insure the deposits of all banks which are entitle to the benefits of the insurance.
INURABLE DEPOSITS
1. Savings Deposit
2. Special Savings
3. Demand/ Checking Account
4. Certificate of Time Deposits
5. Negotiable Order of Withdrawal
MAXIMUM DEPOSIT INSUARNCE COVERAGE
PDIC shall pay deposit insurance on all valid deposits up to the maximum deposit insurance coverage of Php 500,000 per depositor of a closed bank.
If a depositor has single accounts and joint accounts , the insured deposits is up to Php 1,000,000.00
PERIOD OF FILLING Deposits
have two (2) years from PDIC’s takeover of the closed bank to file their deposit insurance claims.
LAW ON BANK SECRECY – R.A. 1405
All deposits of whatever nature in banks or banking institutions in the Philippines and investment in government bonds are absolutely confidential.
Confidentially of the domestic bank deposits is not absolute under exceptions of R.A. 1505, AMLC, criminal laws, etc.
FOREIGN CURRENCY DEPOSIT ACT – R.A. 6426
All foreign currency deposits are absolutely confidential and cannot be examined. Foreign currency deposits are also exempt from attachment , garnishment or any other order or process of any court.
General Banking Law – R.A. 8791
SINGLE BORROWERS LIMIT (SBL)
ADDITIONAL LIMIT OF LOAN
The total amount of loans , credit accommodations and guarantees may be extended by a bank to any person, partnership or corporation shall not exceeded twenty percent (20%) of the net worth of such bank. The total amount of loans , credit accommodations and guarantees may be increased by additional by an additional ten percent (10%) of the net worth of such bank.
DILIGENCE REQUIRED BY LAW TO BE OBSERVED BY BANKS
For demand deposits , savings , time deposit – HIGH STANDARD OF INTEGRITY OR EXTRA-ORDINARY DILIGENCE.
For other services – DILIGENCE OF A GOOD FATHER OF FAMILY.
Conservatorship of Banks
GROUNDS FOR PLACING A BANK UNDER CONSERVATORSHIP
The monetary board finds that a bank or quasi-bank is in the state of continuing inability or unwillingness to maintain a condition of liquidity deemed adequate to protect the interest of the depositors.
PERIOD – The conservatorship shall not exceed one (1) year.
BANK RECEIVERSHIP
GROUNDS FOR BANK RECEIVERSHIP
The bank is unable to pay its liabilities as they become due in the ordinary course of business.
Bank has insufficient realizable assets, as determined by BSP
Bank cannot continue in business without involving probable losses to its depositors or creditors
Bank has willfully desist order
QUIZ (CPAR)
1. (PDIC) in case of bank closure , may the PDIC go directly to liquidation proceedings without the 90- day receivership proceedings?
A. No because it violates the right to due process of the closed bank.
B. Yes, in order to speed up and enhance the recovery rate for creditors
C. No , because PDIC law and General Banking law requires 90 day receivership.
D. Yes, but only if there is consent by at least majority of BOD and ratification by at least 2/3 of the outstanding of a closed bank.
2. (PDIC) A has two separate single bank deposits with 2M and 3M , respectively, in the same bank closed by BSP. Aside from that, A has single joint account of P1M with B in the same bank . How much is the maximum insured amount by PDIC?
A. 1,500,000
c. 500,000
B. 750,000
d. 1,250,000
3. (GENRAL BANKING LAW) What is the maximum limit of loan to be granted by a bank to a single borrower?
A. It shall at no time exceed 20% of the net worth of such bank.
B. It shall at no time exceed 30% of the net worth of such bank.
C. It shall at no time exceed 40% of the net worth of such bank.
D. It shall at no time exceed 15% of the net worth of such bank.
TRUE OR FALSE
A bank has its buying and selling foreign exchange transactions. Under the General Banking Law , the bank is required to exercise extraordinary diligence.
A depositor has three separate banks accounts with 1M, 2M and 3m balance respectively in a closed bank. He can only recover Php500,000 as insured by PDIC.
BS ACCOUNTANCY 4
1. Anti-Money Laundering Law (AMLA) – R.A. 9160
Declaration of Policy
It is hereby declared the policy of the state to protect and preserve the integrity and confidentiality of bank accounts and to ensure that the Philippines shall not be used as a money laundering site for the proceeds of any unlawful activity.
Definition
Money Laundering – is committed by any person who knowingly that any monetary instrument or property represents, involves, or relates to the proceeds of any unlawful activity.
I. Covered Transactions
A transaction in cash or other equivalent monetary instrument exceeding Five Hundred Thousand pesos (Php 500,000.00). A transaction exceeding One Miliion pesos (Php 1,000,000.00) in cases of jewelry dealers in precious meatals and dealers in precious stones.
II. Suspicious Transactions
1.) No underlying legal or trade obligation or economic justification
2.) The client is not properly identified
3.) The amount involved is not commensurate with business financial capacity
4.) the transaction is structured to avoid being the subject of reporting requirements in AMLA.
5.) Transactions which is observed to deviate from the profile of the client
6.) Any transactions that is similar , analogous or identical to any of the foregoing.
III. Covered persons required to report AMLC
1. ) Banks , Pawnshops, Money Changers, Remittance Centers, and all other entity regulated by BSP.
2.) Insurance Companies, Holdings, Insurance Brokers and other entity regulated by Insurance Commissions.
3.)Securities Dealers , brokers, salesmen, investment houses, and other entity regulated by SEC.
IV. Persons excluded to report transactions to AMLC
1. Lawyers, if acting as independent legal professionals in relation to its client.
2. Certified Public Accountants, if acting as independent legal professionals in relation to its client.
V. Transaction Reporting
Covered persons shall report to the AMLC all covered transactions and suspicious transactions within five (5) working days , unless the AMLC prescribes any period not exceeding fifteen (15) working days from occurrence (date discovery not date of transaction)
VI. Freeze Order
The Court of Appeals may issue a freeze order which shall be effective immediately and shall not exceed six (6) months .
Notwithstanding with R.A. 1405, AMLC may inquire or examine any particular deposit or account upon order of Court of Appels based on exparte application.
VII. Can AMLC may inquire into bank account without court order ?
Predicate crimes may authorize AMLC to inquire bank accounts even without Court order from Court of Appeals such as the ff.:
1. Kidnapping for Ransom
2. R.A. 9165
3. Hijacking, destructive arson, murder
4. Felonies
5. Terrorism, Financing and conspiracy to commit terrorism.
QUIZ
1. Which of the following is a covered person, therefore required to report to AMLC reportable or suspicious transactions.
A. Stock Brokers
B. Lawyers acting as independent legal counsel
C. CPA, acting as independent external auditor
D. None of the Above
2. Quasi banks , insurance agents , dealers of securities and brokers are not required to report to AMLC any suspicious transactions since they are covered persons to report.
ANSWER: A. Stock Brokers
FALSE. They are required.
3. Regional Trial Court shall have the jurisdiction of money laundering cases committed by public officers.
False. Sandiganbayan have jurisdiction in this case.
2. Financial Rehabilitation and Insolvency Act (FRIA) – R.A. 10142
Definition of Insolvency
Insolvency shall refer to (1) the financial condition of the debtor that is generally unable to pay its liabilities as they fall due in the ordinary course of business or (2) financial condition of a debtor when he has liabilities greater than his assets.
I. Suspension of Payments
An individual debtor who has sufficient property to cover all his debts but foresees the impossibility of meeting them may file a petition that he should be declared in the State of Suspension of Payments by the court of the city or province attaching his
1. Schedule of Debts and Liabilities
3. Proposed agreement with Creditors
2. Inventory of Assets
I.A. Effect of Suspension of payments
1.) Creditors will be called for meeting and be directed to present written evidence of their claims.
2.) Publication, within 7 days from issuance of order, in a newspaper in general circulation once a week for two consecutive week,.
3.) Forbidding the individual debtor from disposing of his property and making any payment outside of the necessary expenses.
4.) The creditor cannot sue to collect claims from debtor except for the secured creditors (secured property are not subject to suspension order.
5.) The order shall lapse when three (3) months have passed, no proposed agreement have been accepted or such is denied.
I.B. Approval and Rejection of Suspension Order
1. The presence of creditors holding at least three-fifths (3/5) of the liabilities shall constitute a quorum for approval of order.
2. Double Majority Rule: To approve the proposal of insolvent debtor the vote of a.) at least 2/3 of the creditors are required and b.) the claims represented by said majority constitute at least 3/5 of the total liabilities of the debtor.
3. The proposed agreement is deemed rejected when the quorum for meeting was not met or if it was met, double majorities for the approval of proposed agreement have not been met achieved.
4.) If approved, the court shall order that the agreement shall be carried and creditors shall be bound by its terms.
5.) If rejected , all rights which the creditors had before the order shall revert to them and the creditor may be made subject to the insolvency proceedings established by this act.
II. Voluntary Liquidation by Insolvent Individual Debtor
Voluntary Liquidation is initiated by the debtor itself. An individual debtor whose properties are not sufficient to cover his liabilities and owing debts exceeding Five Hundred Thousand pesos (Php 500,000.00) , may apply to be discharged from his debts by filling a petition with the court of the province he resided by attaching
a.) schedule of his debts and liabilities and
b.) inventory of his assets.
If the court finds the petition sufficient in form and substance, it shall issue the Liquidation Order within five (5) working days.
III. Involuntary Liquidation by Insolvent Debtor
This application is initiated by any creditor or group of creditors with a claim , or with claims aggregating at least Five Hundred thousand pesos (Php 500,000.00) may file a verified petition for liquidation with court of the province or city in which the individual debtor resides.
iii.1. Acts of Insolvency which must be alleged by the creditors in the petition
1. The creditor is about to depart or being absent with intent to defraud his creditors
2. That he conceals himself to avoid the service of legal process or is removing any of his property to avoid being attached on legal process.
3. That he has suffered his property for purpose of hindering or delaying the liquidation.
4. That he has transferred by gift, sale, assignment grant or transfer to his estate his properties in contemplation of insolvency.
5. That being a tradesman, he has generally defaulted in the payment of his obligations for a period of (30) days.
iii.2. Effects of Involuntary Liquidation
Upon filling such creditor’s petition, the court shall issue a Show Cause order requiring the individual debtor to show cause, at a time any place fixed by the court, why he should not be adjudged an insolvent.
Upon showing of good cause, the court may issue Order forbidding the individual debtors from making any payments of any debts and transferring his property. This order shall not impair the rights of a secured creditor to enforce his lien.
If after trial , the issues are found in favor of creditors , the court shall issue the Liquidation Order.
IV. Corporate Rehabilitation
Definition of Terms
Rehabilitation shall refer to the restoration of the debtor to a condition of successful operation and solvency, if it was shown that its continuance of operation is economically feasible and its creditors can recover by way of the present payments projected in the plan, more if the debtor continues as a going concern than if it is immediately liquidated.
Rehabilitation Plan shall refer to any plan by which the financial well-being and viability of an insolvent debtor can be restored using various means such as Debt forgiveness, debt restructuring, reorganization, dacion en pago and sale of business or setting up a new business or other similar arrangements as may be approved by the court or creditors.
IV.1. Court-Supervised Rehabilitation
1. Voluntary Court-Supervised Rehabilitation
Must approved by the owner or by majority of the partners or majority of BOD , authorized by stockholder rep. 2/3 outstanding capital stock.
GROUNDS
1. The debtor is generally unable to pay its or his liabilities as they fall due in ordinary course of business
2. The debtor has liabilities that are greater than his assets
2. Involuntary Court supervised Rehabilitation
Any group of creditors with a claim of aggregate of at least One Million Pesos (Php 1,000,000.00) or at least 25% of the subscribed capital or partners contribution , may initiate involuntary proceedings against the debtor by filing petition for rehabilitation.
IV.2. Court Action on Petition for Rehabilitation
If the court finds the petition for rehabilitation to be sufficient in form and substance , it shall issue a Commencement Order within 5 working days from filling of petition. The rehabilitation proceeding shall commence upon the issuance of the Commencement Order.
The rehabilitation proceedings of an insolvent debtor shall commence upon issuance by the rehabilitation court of Commencement order which shall include among other a Stay order or suspension order.
IV.3. Effects of Issuance by Rehabilitation court of stay or suspension order
It shall suspend all actions or proceedings for the enforcement of claims against the debtor.
It shall suspend all actions to enforce any judgement , attachment or other provisional remedies against the debotor.
It shall prohibit the debtor from alienating his property.
It shall prohibit the debtor from making any payment , except for the right of a secured creditor which would not be impair by this act.
Approval of the Rehabilitation Plan The plan shall be deemed rejected unless approved by all classes of creditors whose right are adversely modified or affected by the plan. The plan is said to be deemed approved by class of creditors if members of said class holding more than fifty (50%) of the total claims of said class vote for its favor.
Other types of Rehabilitation
1. Pre-negotiated Rehabilitation
2. Out-of-Court
QUIZ (True or false)
An individual debtor who possess insufficient property to cover all his debts and foresees the impossibility of meeting them may file a petition that he be declared in the state of suspension of payments.
The Involuntary rehabilitation must be approved by the owner in case of sole business, majority of partners in case of partnership and majority vote of BOD and authorized vote stockholders representing 2/3 of OC.
False. “sufficient”
False. Voluntary Rehabilitation
Besh Corp has total 1.5M worth of debt to A,B,C,D,E and F (each has collectible of Php 250,000 to Besh Corp). After having acquired evidence which is a valid ground, A, B and C can initiate for involuntary proceedings by filing a petition for rehabilitation.
False. The aggregate debts of A , B, and C is only 750,000 (the 1m threshold was not met.)
3. Intellectual Property – R.A. 8293 I.
Patents is a exclusive right granted for product , process or an improvement of a product or process which is new, inventive and useful. This exclusive rights gives the creditor the right to exclude others from making, using, or selling the product invention during the life of patents.
MODES OF CREATION
LAW ON PATENTS
It must be registered with IPO to be protected by law.
TERM OF PATENTS
A patent has a term of protection for 20 years providing an investor significant commercial gain.
Requisites of Patentable Inventions
1. It must be a technical solution to a problem in any field of human activity.
2. It must be new (novelty). An invention is not considered new if it forms part of the prior art.
3. It must involve an inventive step. An invention involves an inventive step when , having regard with prior art , it is not obvious to a person skilled in the art at the time of filing.
4. It must be industrially applicable, meaning it can be produced and used in any industry.
Non-Patentable Inventions
1. Discoveries, scientific theories and mathematical methods. 2. Schemes , rules and methods of performing mental acts, playing games or doing business and programs for computers. 3. Method for treatment of the human or animal body by surgery or therapy. 4. Aesthetic Creations 5. Anything which is contrary to public order or morality.
FIRST TO FILE RULE
If two or more persons have made the invention separately and independently of each other, the right to the patent shall belong to the person who filed an application for the same invention first.
TEST OF PATENT INFRINGEMENT
1. Literal Infringement – The court must juxtapose the claims of the patent and the accused product within the overall context of the claims and specifications, to determine whether there is exact identity of all material elements.
2. Doctrine of Equivalent infringement- Infringement also takes place when a device appropriates a prior invention by incorporating its innovative concept and although some modification and change, it performs substantially the same function in the same with same results.
II. The on Trademarks and Trade Names
DEEINITION
MODES OF CREATION OF RIGHT
Trademark – visible sign capable of distinguishing the goods of an enterprise and shall include a stamped or marked container of services. Trademarks, service mark and collective mark must be registered with IPO to be protected by law while trade name need not to be registered.
TERMS OF TRADEMARK AND SERVICE MARK
It has a term of 10 years but subject to unlimited renewal . Therefore it has indefinite life.
Test of Trademark Infringement
1. Dominancy Test – Infringement takes place when the competing trademark contains the essential features of another . Imitation or an effort to imitate is unnecessary. The question is whether the use of the marks is likely to cause confusion or deceive purchase.
2. Holistic Test – it considers the entirety of the marks , including labels and packaging , in determining confusing similarity . The focus is not only on the predominant words but also on other features appearing on the labels.
III. The Law on Copyright
COPYRIGHT – It is a legal protection extended to the owner of the rights in an original work.
MODE OF CREATION A RIGHT – From the moment of creation without the need or form of expression. Works are protected by sole fact of their creation , irrespective of their mode or form of expression.
TERM OF COPYRIGHT – The term of protection of copyright for original and derivative works is the life of the author plus (50) years after his death. The terms shall begin on the first day of January of subsequent year following the death.
Infringement of Copyright
It consist in infringing any right secured or protected under the code. It may also consist in aiding or abetting such infringement. The law also provides for the liability of a person who at the time when copyright subsists in a work, he know or ought to know , the infringing copy of the work for the purpose of
1. Selling or exposing the work for trade
2. Distributing the article for the purpose of trade to the prejudice the rights of the copyright owner.
3. Trade exhibit of the article in public.
QUIZ
The first to file rule is also applicable for registration of trademarks and copyrights.
False. There’s no such thing
The court founds out that the entire trademarks of JOLLYME Products including the packaging , labelling and business structure are very similar to registered trademarks of JOLLIBEE. Neneng, a loyal customer of JOLLIBEE even confused with two fast foods that she unintentionally had dined in at JOLLYME . A holistic test had aided the court to test the infringement.
True.
Philippine Deposit Insurance Corporation Law (R.A. 10846)
PDIC is a government instrumentality created by bvirtue of this act to insure the deposits of all banks which are entitle to the benefits of the insurance.
INURABLE DEPOSITS
1. Savings Deposit
2. Special Savings
3. Demand/ Checking Account
4. Certificate of Time Deposits
5. Negotiable Order of Withdrawal
MAXIMUM DEPOSIT INSUARNCE COVERAGE
PDIC shall pay deposit insurance on all valid deposits up to the maximum deposit insurance coverage of Php 500,000 per depositor of a closed bank.
If a depositor has single accounts and joint accounts , the insured deposits is up to Php 1,000,000.00
PERIOD OF FILLING Deposits
have two (2) years from PDIC’s takeover of the closed bank to file their deposit insurance claims.
LAW ON BANK SECRECY – R.A. 1405
All deposits of whatever nature in banks or banking institutions in the Philippines and investment in government bonds are absolutely confidential.
Confidentially of the domestic bank deposits is not absolute under exceptions of R.A. 1505, AMLC, criminal laws, etc.
FOREIGN CURRENCY DEPOSIT ACT – R.A. 6426
All foreign currency deposits are absolutely confidential and cannot be examined. Foreign currency deposits are also exempt from attachment , garnishment or any other order or process of any court.
General Banking Law – R.A. 8791
SINGLE BORROWERS LIMIT (SBL)
ADDITIONAL LIMIT OF LOAN
The total amount of loans , credit accommodations and guarantees may be extended by a bank to any person, partnership or corporation shall not exceeded twenty percent (20%) of the net worth of such bank. The total amount of loans , credit accommodations and guarantees may be increased by additional by an additional ten percent (10%) of the net worth of such bank.
DILIGENCE REQUIRED BY LAW TO BE OBSERVED BY BANKS
For demand deposits , savings , time deposit – HIGH STANDARD OF INTEGRITY OR EXTRA-ORDINARY DILIGENCE.
For other services – DILIGENCE OF A GOOD FATHER OF FAMILY.
Conservatorship of Banks
GROUNDS FOR PLACING A BANK UNDER CONSERVATORSHIP
The monetary board finds that a bank or quasi-bank is in the state of continuing inability or unwillingness to maintain a condition of liquidity deemed adequate to protect the interest of the depositors.
PERIOD – The conservatorship shall not exceed one (1) year.
BANK RECEIVERSHIP
GROUNDS FOR BANK RECEIVERSHIP
The bank is unable to pay its liabilities as they become due in the ordinary course of business.
Bank has insufficient realizable assets, as determined by BSP
Bank cannot continue in business without involving probable losses to its depositors or creditors
Bank has willfully desist order
QUIZ (CPAR)
1. (PDIC) in case of bank closure , may the PDIC go directly to liquidation proceedings without the 90- day receivership proceedings?
A. No because it violates the right to due process of the closed bank.
B. Yes, in order to speed up and enhance the recovery rate for creditors
C. No , because PDIC law and General Banking law requires 90 day receivership.
D. Yes, but only if there is consent by at least majority of BOD and ratification by at least 2/3 of the outstanding of a closed bank.
2. (PDIC) A has two separate single bank deposits with 2M and 3M , respectively, in the same bank closed by BSP. Aside from that, A has single joint account of P1M with B in the same bank . How much is the maximum insured amount by PDIC?
A. 1,500,000
c. 500,000
B. 750,000
d. 1,250,000
3. (GENRAL BANKING LAW) What is the maximum limit of loan to be granted by a bank to a single borrower?
A. It shall at no time exceed 20% of the net worth of such bank.
B. It shall at no time exceed 30% of the net worth of such bank.
C. It shall at no time exceed 40% of the net worth of such bank.
D. It shall at no time exceed 15% of the net worth of such bank.
TRUE OR FALSE
A bank has its buying and selling foreign exchange transactions. Under the General Banking Law , the bank is required to exercise extraordinary diligence.
A depositor has three separate banks accounts with 1M, 2M and 3m balance respectively in a closed bank. He can only recover Php500,000 as insured by PDIC.
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