Practice question
A machine owned by a third party was held by the debtor solely under bailment when proceedings began. Ownership is undisputed. The liquidator proposes selling it as an ordinary debtor asset solely because it was in the debtor's warehouse. Which is best?
- FRIA excludes third-party bailment property from the debtor's estate on the stated facts
- Physical possession always proves debtor ownership
- Every stored asset belongs to creditors automatically
- The liquidator may ignore undisputed ownership
- Bailment always transfers title to the bailee
Legal references
- RA 10142, Section 4(q): https://lawphil.net/statutes/repacts/ra2010/ra_10142_2010.html
Answer this question in flashcards to review your response and continue practicing.