Co, Andrea Martha Isobel L.

BSAN 2A

PART I.
A. The Financial Rehabilitation and Insolvency Act (FRIA) tackles insolvency in
a way that it points out to the inability of a person, may it be a natural or
juridical person, to pay their obligations once they fall due. Insolvency, as a
result, shows that there are greater liabilities than assets of the debtors.

B. The criminal liability that both Yves and Sarah will be liable for is under BP
22. Even though Sarah is the one who owns the account, Yves was the one
who borrowed the money, also known as the ‘accomodation party’, ergo,
being the both should be held liable in this case. Although they have
anticipated replenishment, they should have at least ordered a stop payment
as to not pursue the bouncing of the check; assuming that they were unable to
do so, it serves as prima facie evidence that they were knowledgeable that
there is an insufficiency of funds.

C. a) Yes, the case against Wusang Insurance Corp. should be suspended. As

long as the commencement order states under the Commencement Order
thereof, it is considered that it shall halt any other proceedings relating to this
case.
b) For Mr. Cassano, the criminal case shall not be suspended, since the
Commencement Order was only applicable to FRIA cases. Pointing out that the
cases of Wusang Insurance Corp. and Mr. Cassano are not under the same
criminal and legal liability.

D. Yes. Julia is still liable for the violation of BP 22. Since the requisites for
being liable to BP 22 is 1) the issuance of the check, 2) that she has the
knowledge that there is insufficiency of the funds, 3) and that the check was
dishonored. Despite informing Gerald of the insufficiency of funds, it is already
assumed that she should be held liable for this case.

E. a) No, D Medical Inc. should not be considered insolvent. Since they still
have more assets than liabilities, they do not meet requirements of insolvency
but rather should be considered not liquid. It just so happen that they are
unable to meet current obligations or liabilities that make them not liquid but
not insolvent.
 b) They can file a suspension of payments under FRIA. Since they still have
assets to cover their debts although it will fall pass due of its liabilities, they
can still be granted the suspension of payments.
c)DMed can avail of the following: Court-Supervised Rehabilitation,
Pre-Negotiated Rehabilitation, and the Out-of-Court or Informal Rehabilitation
Agreement. As long as they conform to all the requisites of the
aforementioned proceedings, they can avail of those. All parties involved
should be informed of their availment of either of those proceedings, willingly
agreeing to it.
d) Yes, it is still possible for the rehabilitation proceedings’ conversion to
liquidation. As long as the petition is sufficient in form and substance, it is not
far from possible to be converted.

PART II.

1. A
2. B
3. C
4. C
5. D
6. B
7. C
8. A
9. A
10. C
11. D
12. C
13. D
14. C
15. D
16. D
17. A
18. D
19. A
20. D
21. D
22. B
23. D
24. D
25. C

PART III.
1) FALSE. Price Ceiling is the…
2) TRUE.
3) FALSE. …to the public is Substandard Product
4) FALSE. …manufactured is Expired Product
5) TRUE.
6) FALSE. Full Warranty refers to…
7) FALSE. …on July 15, 2014.
8) FALSE. …Cash Price means the…
9) TRUE.
10) TRUE.
11) TRUE.
12) FALSE. …the Court of Appeals takes…
13) TRUE.
14) TRUE.
15) FALSE. …shall not be entitled to participate in the rehabilitation
proceedings but shall be entitled to receive distributions arising
therefrom.