b. Rehabilitation Receiver and Rehabilitation Plan

Rehabilitation Receiver and Rehabilitation Plan

In involuntary rehabilitation proceedings initiated by creditors under Republic Act No. 10142, the verified petition must establish the substantial likelihood that the debtor may be rehabilitated and must specifically include, among other items, a Rehabilitation Plan and the names of at least three nominees to the position of rehabilitation receiver¹. In the course of the proceedings, expenses incurred for the fees of the rehabilitation receiver and of the professionals engaged by them are classified as administrative expenses, being reasonable and necessary expenses arising from or connected with the conduct of rehabilitation or liquidation proceedings².

Although a rehabilitation court exercises authority over the debtor's rehabilitation, its powers are circumscribed by the doctrine of judicial stability or non-interference, which dictates that no court can interfere by injunction with the judgments or orders of a co-equal court of concurrent jurisdiction³. Under La Savoie Development Corporation v. Buenavista Properties, Inc., G.R. Nos. 200934-35, 28 September 2020, a rehabilitation court lacks the authority to enjoin the regular orders or judgments of another regional trial court, since only the Court of Appeals or the Supreme Court has the authority to halt such execution³. However, an order of the rehabilitation court reducing a penalty awarded to a creditor remains valid and binding³.