Practice question
The debtor and an allied creditor fraudulently coordinate approval votes. A qualified dissenting creditor timely objects and proves the connivance. The debtor says reaching the numerical majority immunizes the result. Resolve.
- The court may annul approval on the recognized fraudulent-connivance ground notwithstanding the vote totals.
- Numerical approval legalizes all proven fraud.
- Only fraudulent conduct by the commissioner could matter.
- Fraudulent connivance is never relevant in suspension of payments.
- The objection automatically transfers all assets to the objector without adjudication.
Legal references
- RA 10142, Sections 95 and 99-102, suspension of payments: https://lawphil.net/statutes/repacts/ra2010/ra_10142_2010.html
- Supreme Court A.M. 15-04-06-SC, April 21, 2015, FLSP Rules, Rule 3(A), official PHILJA publication: https://philja.judiciary.gov.ph/files/bulletin/Bul66.pdf
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