MORNBFI Vol. 1 - Planters Development Bank

APP. Q-5611.31.12GUIDELINES ON RECEIVERSHIP AND LIQUIDATION PROCEEDINGS OFNON-BANKS WITH QUASI-BANKING FUNCTIONS AND TRUST ENTITIES(Appendix to Section 4428Q)PART IGUIDELINES ON RECEIVERSHIP OFNBQBs/TRUST ENTITIESIntroduction. Receivership is defined as thecondition when the Monetary Boarddesignates a person, known as a “Receiver”,to take over an institution enumeratedunder Item "I" of these guidelines andadminister and hold the assets of theinstitution in trust for its creditors andstockholders.I. Coverage. These Guidelines shall coverinstitutions which shall refer to any of thefollowing:a. Non-banks with quasi-banking license(i.e. Investment houses and Financingcompanies); andb. Trust entities.II. Legal Bases for Placement underReceivershipa. Section 30, R.A. No. 7653.“Whenever, upon report of the head ofthe supervising or examining department,the Monetary Board finds that a x x xquasi-bank:1. is unable to pay its liabilities as theybecome due in the ordinary course ofbusiness: Provided, that this shall notinclude inability to pay caused byextraordinary demands induced byfinancial panic in the banking community;2. has insufficient realizable assets, asdetermined by the Bangko Sentral to meetits liabilities; or3. cannot continue in businesswithout involving probable losses to itsdepositors or creditors; or4. has willfully violated a cease anddesist order under Section 37 that hasbecome final, involving acts or transactionswhich amount to fraud or a dissipation ofthe assets of the institution; x x x"“x x x The receiver shall determine as soonas possible, but not later than ninety (90)days from takeover, whether the institutionmay be rehabilitated or otherwise placed insuch a condition so that it may bepermitted to resume business with safety toits x x x creditors and the general public:Provided, That any determination for theresumption of business of the institutionshall be subject to prior approval of theMonetary Board."“If the receiver determines that theinstitution cannot be rehabilitated orpermitted to resume business in accordancewith the next preceding paragraph, theMonetary Board shall notify in writing theboard of directors of its findings and directthe receiver to proceed with the liquidationof the institution x x x”“The actions of the Monetary Board takenunder this section or under Section 29 ofthis Act shall be final and executory, andmay not be restrained or set aside by thecourt except on petition for certiorari on theground that the action taken was in excessof jurisdiction or with such grave abuse ofdiscretion as to amount to lack or excess ofjurisdiction. The petition for certiorari mayonly be filed by the stockholders of recordrepresenting the majority of the capital stockwithin ten(10) days from receipt by theboard of directors of the institution of theorder directing receivership x x x”“The x x x appointment of a receiver underManual of Regulations for Non-Banks Financial InstitutionsAppendix Q-56 - Page 1