Financial Rehabilitation and Insolvency Act (FRIA)

Answer No. Statement

1 The following are administrative expenses referring to reasonable
and necessary expenses, except:
A. THOSE ARISING FROM FILING PETITION
B. THOSE FOR THE PAYMENT OF NEW OBLIGATIONS OBTAINED AFTER THE
COMMENCEMENT DATE
C. THOSE INCURRED IN THE ORDINARY COURSE OF BUSINESS OF THE
CREDITOR AFTER THE COMMENCEMENT DATE
D. THOSE INCURRED FOR THE FEES OF THE REHABILITATION RECEIVER OR
LIQUIDATOR AND OF THE PROFESSIONALS ENGAGED BY THEM
2 It refers to the power of a parent corporation to direct or govern
the financial and operating policies of an enterprise so as to
obtain benefits from its activities.
A. LIEN
B. CLAIM
C. CONTROL
D. RIGHT
3 He is one whose claim or portion thereof is neither secured nor
preferred nor subordinated.
A. GENERAL UNSECURED CREDITOR
B. INDIVIDUAL DEBTOR
C. RECEIVER
D. GROUP OF DEBTORS
4 Which of the following is not covered by a group of debtors?
A. CORPORATIONS THAT ARE FINANCIALLY RELATED TO ONE ANOTHER AS
PARENT CORPORATIONS
B. PARTNERSHIPS THAT ARE OWNED AT LEAST 40% BY THE SAME PARTNERS
C. PARTNERSHIPS THAT ARE OWNED MORE THAN 50% BY THE SAME PERSON
D. SINGLE PROPRIETORSHIPS THAT ARE OWNED BY THE SAME PERSON
5 It refers to all claims or demands of whatever nature or character
against the debtor or its property, whether for money or
otherwise, liquidated or unliquidated, fixed or contingent,
matured or unmatured, disputed or undisputed.
A. LIEN
B. CLAIM
C. CONTROL
D. RIGHT
6 It shall refer to a corporation which has control over another
corporation either directly or indirectly through one or more
intermediaries.
A. SUBSIDIARY
B. AFFILIATE
C. PARENT
D. STOCK CORPORATION
7 It shall refer to a natural person holding a management position
described in or contemplated by a juridical entity's articles of
incorporation, bylaws or equivalent documents, except for the
corporate secretary, the assistant corporate secretary and the
external auditor.
A. LIQUIDATOR
B. OFFICER
 C. RECEIVER
D. OWNER
8 There is failure of rehabilitation in the following cases, except:
A. UNDER THE REHABILITATION PLAN SUBMITTED BY THE DEBTOR, THE
DEBTOR CAN BE REHABILITATED WITHIN A REASONABLE PERIOD
B. DISMISSAL OF THE PETITION BY THE COURT
C. THE DEBTOR FAILS TO SUBMIT A REHABILITATION PLAN
D. THE COMMISSION OF FRAUD IN SECURING THE APPROVAL OF THE
REHABILITATION PLAN OR ITS AMENDMENT
9 It shall refer to the ownership interest of third parties in
property held by the debtor, including those covered by trust
receipts or assignments of receivables.
A. AFFILIATE
B. SUBSIDIARY

C. PARENT
D. OWNERSHIP INTEREST
10 It refers to a statutory or contractual claim or judicial charge
on real or personal property that legality entities a creditor to
resort to said property for payment of the claim or debt secured
by such lien.
A. CLAIM
B. CONTROL
C. RIGHT
D. LIEN
11 When should a Commencement order be issued if the court finds the
petition for rehabilitation to be sufficient in form and
substance?
A. 5 WORKING DAYS FROM THE FILING OF THE PETITION
B. 20 WORKING DAYS FROM THE FILING OF THE PETITION
C. AT LEAST 60 DAYS FROM THE DATE OF THE FILING
D. 10 DAYS FROM THE TIME OF ITS ISSUANCE
12 Who may serve as a rehabilitation receiver?
A. REGULAR PERSON
B. JURIDICAL PERSON
C. PRIMARY PERSON
D. ANY QUALIFIED NATURAL PERSON
13 It shall refer to a lien on property, the possession of which has
been transferred to a creditor or a representative or agent
thereof.
A. PROPERTY LIEN
B. POSSESSORY LIEN
C. REPRESENTATIVE LIEN
D. ENCUMBERED PROPERTY LIEN
14 Which of the following is a responsibility of a rehabilitation
receiver?
A. TO EVALUATE THE VALIDITY, GENUINENESS AND TRUE AMOUNT OF ALL
THE CLAIMS AGAINST THE CREDITOR
B. TO VERIFY AND CORRECT, IF NECESSARY, THE INVENTORY OF ALL OF
THE ASSETS OF THE CREDITOR, AND THEIR VALUATION
C. NOT TO VERIFY THE ACCURACY OF THE FACTUAL ALLEGATIONS IN THE
PETITION AND ITS ANNEXES
D. TO HAVE ACCESS TO ALL INFORMATION NECESSARY, PROPER OR RELEVANT
TO THE OPERATIONS AND BUSINESS OF THE CREDITOR AND FOR ITS
REHABILITATION
15 It shall refer to transactions in the pursuit of the individual
debtor's or debtor's business operations prior to rehabilitation
 or insolvency proceedings and on ordinary business terms.
A. EXTRAORDINARY COURSE OF BUSINESS
B. SPECIAL COURSE OF BUSINESS
C. ORDINARY COURSE OF BUSINESS
D. CAPITAL COURSE OF BUSINESS
16 A creditor is deemed to lack adequate protection in the following
cases, except:
A. THE DEBTOR FAILS OR REFUSES TO HONOR A PRE-EXISTING AGREEMENT
WITH THE CREDITOR TO KEEP THE PROPERTY INSURED
B. THE PROPERTY WAS SOLD TO THE DEBTOR FOR A SECURED DEBT
C. THE PROPERTY HAS DEPRECIATED TO AN EXTENT THAT THE CREDITOR IS
UNDER SECURED
D. THE DEBTOR FAILS OR REFUSES TO TAKE COMMERCIALLY REASONABLE
STEPS TO MAINTAIN THE PROPERTY
17 What order may a court modify if the arrangements made by the
debtor to provide insurance or maintenance of property are not
feasible?
A. STAY ORDER
B. COMMENCEMENT ORDER
C. LIQUIDATION ORDER
D. SUSPENSION ORDER
18 It shall refer, in addition to a holder of shares of a
corporation, to a member of a nonstock corporation or association
or a partner in a partnership.
A. SHAREHOLDER
B. PARTNER
C. DIRECTOR
D. STAKEHOLDER
19 An insolvent debtor may file a verified petition including the
following, except:
A. THE PRE-NEGOTIATED REHABILITATION PLAN, INCLUDING THE NAMES OF
AT LEAST TWENTY (20) QUALIFIED NOMINEES FOR REHABILITATION
RECEIVER
B. AN INVENTORY OF THE DEBTOR'S ASSETS
C. A SCHEDULE OF THE DEBTOR'S DEBTS AND LIABILITIES
D. A SUMMARY OF DISPUTED CLAIMS AGAINST THE DEBTOR AND A REPORT ON
THE PROVISIONING OF FUNDS TO ACCOUNT FOR APPROPRIATE PAYMENTS
SHOULD ANY SUCH CLAIMS BE RULED VALID OR THEIR AMOUNTS ADJUSTED
20 It shall refer to the restoration of the debtor to a condition of
successful operation and solvency, if it is shown that its
continuance of operation is economically feasible and its
creditors can recover by way of the present value of payments
projected in the plan, more if the debtor continues as a going
concern than if it is immediately liquidated.
A. REHABILITATION
B. LIQUIDATION
C. RESTORATION
D. INDEMNIFICATION
21 What order shall a court issue within five working days if the
petition is sufficient in form and substance?
A. LIQUIDATION ORDER
B. STAY ORDER
C. COMMENCEMENT ORDER
D. SUSPENSION ORDER
22 It is a period that may be agreed upon by the parties’ pending
negotiation and finalization of the out-of-court or informal
restructuring or Rehabilitation Plan.
 A. PRESCRIPTIVE PERIOD
B. GRACE PERIOD
C. STANDSTILL PERIOD
D. WALKING PERIOD
23 It is a reasonable and necessary expense incurred in the ordinary
course of business of the debtor after the commencement date.
A. GENERAL EXPENSES
B. ADMINISTRATIVE EXPENSES
C. ORDINARY EXPENSES
D. EXTRAORDINARY EXPENSES
24 It refers to a corporation that directly or indirectly, through
one or more intermediaries, is controlled by, or is under the
common control of another corporation.
A. AFFILIATE
B. CONTROLLING INTEREST
C. SUBSIDIARY
D. PARENT COMPANY
25 It is a financial condition of a debtor where he is unable to pay
his liabilities as they fall due in the ordinary course of
business or has liabilities that are greater than its or his
assets.
A. LIQUIDATION
B. BANKRUPTCY
C. INSUFFICIENCY
D. INSOLVENCY
26 What are proceedings initiated by creditors?
A. INVOLUNTARY PROCEEDINGS
B. VOLUNTARY PROCEEDINGS
C. REGULAR PROCEEDINGS
D. GENERAL PROCEEDINGS
27 The costs for compensation to the rehabilitation officer and
direct employees or independent contractors are considered as what
type of expenses?
A. GENERAL EXPENSES
B. PRE-COMMENCEMENT CLAIMS

C. ADMINISTRATIVE EXPENSES
D. ORDINARY EXPENSES
28 Claims of separation pay for months worked prior to the
commencement date shall be considered as:
A. ADMINISTRATIVE EXPENSES
B. EXTRAORDINARY EXPENSES
C. COMPENSATION CLAIMS
D. PRE-COMMENCEMENT CLAIMS
29 Claims for salary and separation pay for work performed after the
commencement date shall be considered as:
A. ADMINISTRATIVE EXPENSES
B. GENERAL EXPENSES
C. COMPENSATION CLAIMS
D. PRE-COMMENCEMENT CLAIMS
30 Claims for actual damages, if any, arising as a result of the
election to terminate a contract against the debtor shall be
considered as:
A. PRE-COMMENCEMENT CLAIMS
B. GENERAL EXPENSES
C. TERMINATION CLAIMS
D. ADMINISTRATIVE EXPENSES
31 It shall refer to a creditor with a secured claim.
A. SECURED PARTY
B. SECURED CREDITOR
C. SECURED CLAIM
D. NATURAL PERSON
32 What is the period given to the court to confirm a Rehabilitation
Plan?
A. MINIMUM OF 6 MONTHS FROM THE DATE OF FILING
B. 60 DAYS FROM THE DATE OF FILING
C. MAXIMUM OF 1 YEAR FROM THE DATE OF FILING
D. 30 DAYS FROM THE DATE OF FILING
33 It refers to properties held by the debtor in which other persons
have an ownership interest.
A. PROPERTY LIEN
B. POSSESSORY LIEN
C. PROPERTY OF OTHERS
D. ESTATE
34 It shall refer to any corporation authorized/licensed to sell or
offer to sell pre-need plans.
A. PRE NEED COMPANY
B. BANK
C. PHILIPPINE DEPOSIT INSURANCE CORPORATION
D. QUASI-BANK
35 When shall be the hearing on the objections to the petition be
held by the court?
A. (80) DAYS FROM THE DATE OF THE SECOND PUBLICATION OF THE ORDER
B. (25) DAYS FROM THE DATE OF THE SECOND PUBLICATION OF THE ORDER
C. (150) DAYS FROM THE DATE OF THE SECOND PUBLICATION OF THE
ORDER
D. (40) DAYS FROM THE DATE OF THE SECOND PUBLICATION OF THE ORDER
36 It is when an insolvent debtor applies for a liquidation by filing
a petition for liquidation with the court. What is this type of
liquidation?
A. JURIDICAL LIQUIDATION
B. INVOLUNTARY LIQUIDATION
C. GENERAL LIQUIDATION
D. VOLUNTARY LIQUIDATION
37 The following shall be the actions of a Liquidation Order, except:
A. DECLARE THE DEBTOR INSOLVENT
B. ORDER THE LIQUIDATION OF THE DEBTOR AND, IN THE CASE OF A
JURIDICAL DEBTOR, DECLARE IT AS DISSOLVED
C. DETERMINE THE CREDITORS WHO HAVE MADE NOT TIMELY AND NOT PROPER
FILING OF THEIR NOTICE OF CLAIMS
D. DIRECT PAYMENTS OF ANY CLAIMS AND CONVEYANCE OF ANY PROPERTY
DUE THE DEBTOR TO THE LIQUIDATOR

38 Who is deemed an officer of the court with the principal duty of

preserving and maximizing the value and recovering the assets of
the debtor with the end of liquidating them and discharging to the
extent possible all the claims against the debtor?
A. LIQUIDATOR
B. REHABILITATION RECEIVER
C. OFFICER
D. REPRESENTATIVE OF THE COURT
39 Who has the responsibility to settle all accounts between the
debtor and his creditors, subject to the approval of the court?
 A. REHABILITATION RECEIVER
B. REPRESENTATIVE OF THE COURT
C. BAILEE
D. LIQUIDATOR
40 What is/are the punishment/s imposed to an owner, partner,
director, officer or other employee of the debtor who having
knowledge belief of any person having proved a false or fictitious
claim against the debtor, fail to disclose the same to the
rehabilitation receiver of liquidator within one (1) month after
coming to said knowledge or belief?
A. A FINE OF NOT MORE THAN (PHP1,000,000.00) AND IMPRISONMENT FOR
NOT LESS THAN (3) MONTHS NOR MORE THAN (5) YEARS FOR EACH
OFFENSE
B. A FINE OF NOT MORE THAN (PHP1, 000,000.00)
C. IMPRISONMENT FOR NOT LESS THAN (3) MONTHS NOR MORE THAN (5)
YEARS FOR EACH OFFENSE
D. A FINE OF NOT MORE THAN (PHP3, 000,000.00) AND IMPRISONMENT FOR
NOT LESS THAN (1) YEARS AND NOT MORE THAN (7) YEARS FOR EACH
OFFENSE
41 What is/are the penalty/ies imposed to an owner, partner,
director, officer or other employee of the debtor who knowingly
violate a prohibition or knowingly fail to undertake an obligation
established by FRIA?
A. IMPRISONMENT FOR NOT LESS THAN SIX(6) MONTHS NOR MORE THAN
THREE (3) YEARS FOR EACH OFFENSE
B. A FINE OF NOT MORE THAN (PHP3, 000,000.00) AND IMPRISONMENT FOR
NOT LESS THAN ONE (1) YEARS AND NOT MORE THAN SEVEN (7) YEARS
FOR EACH OFFENSE
C. A FINE OF NOT MORE THAN (PHP1,000,000.00) AND IMPRISONMENT FOR
NOT LESS THAN THREE(3) MONTHS NOR MORE THAN FIVE (5) YEARS FOR
EACH OFFENSE
D. IMPRISONMENT FOR NOT LESS THAN ONE (1) YEARS AND NOT MORE THAN
SEVEN (7) YEARS FOR EACH OFFENSE
42 Which of the following is not a part of the class of creditors?
A. SECURED CREDITORS
B. TRADE CREDITORS AND SUPPLIERS
C. UNSECURED CREDITORS
D. EMPLOYEES OF THE CREDITOR
43 It refers to a sole partnership registered with DTI, a partnership
registered with SEC, a corporation duly organized and existing
under Philippine laws or an individual debtor who has become
insolvent.
A. CREDITOR
B. OBLIGATOR
C. DEBTOR
D. DELEGANTE
44 It shall refer to monetary claims against the debtor, including
stockholder's advances that have been recorded in the debtor's
audited financial statements as advances for future subscriptions.
A. COMPENSATION
B. LIABILITIES
C. CONSIDERATION
D. PAYMENT
45 It refers to real or personal property of the debtor upon which a
lien attaches.
A. LIEN PROPERTY
B. ENCUMBERED PROPERTY
 C. MORTGAGE PROPERTY
D. PROPERTIES
46 Which of the following is not an exclusion from the definition the
term “debtor”?
A. CORPORATIONS
B. BANKS
C. PRE-NEED COMPANIES
D. LOCAL GOVERNMENT UNITS
47 Who are allowed to vote in the election of the liquidator?
A. ALL CREDITORS
B. CREDITORS WHO HAVE FILED THEIR CLAIMS BEFORE THE PERIOD SET BY
THE COURT
C. SECURED CREDITORS WHO WAIVE THEIR SECURITY OR LIEN
D. CREDITORS WHOSE CLAIMS ARE BARRED BY THE STATUTE OF LIMITATIONS
48 It shall refer to a secured creditor or the agent or
representative of such secured creditor.
A. SECURED CREDITOR
B. SECURED AGENT
C. SECURED REPRESENTATIVE
D. SECURED PARTY
49 Who are responsible for the promulgation of rules for the use and
release of public funds of government-owned and controlled
corporations?
A. DEPARTMENT OF FINANCE AND SECURITIES AND EXCHANGE COMMISSION
B. DEPARTMENT OF BUDGET MANAGEMENT AND DEPARTMENT OF FINANCE
C. LOCAL GOVERNMENT UNITS IN COLLABORATION WITH DEPARTMENT OF
BUDGET
D. DEPARTMENT OF FUNDS AND DEPARTMENT OF FINANCE
50 These are proceedings initiated by the debtor.
A. INVOLUNTARY PROCEEDINGS
B. GENERAL PROCEEDINGS
C. REGULAR PROCEEDINGS
D. VOLUNTARY PROCEEDINGS
No. FRIA
1 C
2 D
3 A
4 B
5 B
6 C
7 B
8 A
9 D
10 D
11 A
12 D
13 B
14 C
15 C
16 B
17 A
18 D
19 A
20 A
21 A
22 C
23 B
24 A
25 D
26 A
27 C
28 D
29 A
30 A
31 B
32 C
33 C
34 A
35 B
36 D
37 C
38 A
39 D
40 A
41 C
42 D
43 C
44 B
45 B
46 A
47 C
48 D
49 B
50 D