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2 Corporate Liquidation

The document outlines the financial condition and procedures related to corporate liquidation, including the classification of assets and liabilities. It details the order of priority for creditors, distinguishing between fully secured, partially secured, and unsecured creditors, as well as the necessary documentation such as the Statement of Affairs and Statement of Realization and Liquidation. Additionally, it specifies the types of unsecured liabilities that have priority under the law.

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jannahabigael.sumalinog
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10 views1 page

2 Corporate Liquidation

The document outlines the financial condition and procedures related to corporate liquidation, including the classification of assets and liabilities. It details the order of priority for creditors, distinguishing between fully secured, partially secured, and unsecured creditors, as well as the necessary documentation such as the Statement of Affairs and Statement of Realization and Liquidation. Additionally, it specifies the types of unsecured liabilities that have priority under the law.

Uploaded by

jannahabigael.sumalinog
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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CORPORATE LIQUIDATION 2.

Creditors with priority


3. Unsecured creditors

Statement of Affairs [Format: pp. 1100]


 Estimated deficiency to unsecured
- Financial condition prepared for a
creditors – residual amount available
corporation entering into the stage of
to unsecured creditors that is not
liquidation or bankruptcy
sufficient to cover their claims

Assets
Statement of Deficiency
1. Pledged fully with fully secured creditors
- Accompanies statement of affairs to
- Expected to realize an amount at
prove the deficiency to unsecured
least sufficient to satisfy related debt
creditors
2. Pledged with partially secured creditors
- Expected to realize an amount below
related debt
Statement of Realization and
3. Free assets
Liquidation
- Not pledged and are available to
satisfy claims of creditors with priority, - Activity statement progress toward the
partially secured creditors, and liquidation of a debtor’s estate
unsecured creditors - Shows actual transaction that transpired
during the period covered

Liabilities
1. Fully secured liabilities
- Expected to be paid in full as a result
of their having sufficient collateral
(pledged assets) to satisfy the
indebtedness
2. Partially secured liabilities
- Proceeds of pledged assets are
expected to be insufficient to satisfy
the indebtedness
3. Unsecured liabilities with priority
- Priority under the law
a. Necessary funeral expenses of
debtor, wife, or children, who are
under their parental authority and
have no property of their own,
when approved by court
b. Debts due for personal services
rendered by employees, laborers,
or domestic servants
c. Compensation due to laborers or
their dependents
d. Legal expenses, and expenses
incurred in the administration of
insolvent’s estate for common
interest of creditors, when
approved by law
e. Debts, taxes, and assessments due
to National Government
f. (e) due to any province of PH
g. (e) due to any municipality of PH
4. Unsecured liabilities
- No collateral related to their
indebtedness

Capital

Order of priority in distributing assets:


1. Corresponding obligations (secured
creditors)

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