Question

1. In January 2022, Mr. Santos formed a corporation called XYZ Corporation to engage in the importation and distribution of electronic gadgets. The Articles of Incorporation was duly registered with the Securities and Exchange Commission (SEC) and specified that the corporation shall have a term of 50 years. The corporation started its operations immediately after registration. However, after only 3 years of operation, XYZ Corporation encountered financial difficulties and incurred substantial losses. As a result, the corporation was no longer able to pay its debts and obligations.

A group of creditors sought to file a case for involuntary dissolution of XYZ Corporation, claiming that it is already insolvent and unable to continue its business. Meanwhile, Mr. Santos, as the majority shareholder, believes that the corporation can still recover from its current financial situation and wants to continue its operations.

Discuss the legal implications of involuntary dissolution of a juridical person and the rights and responsibilities of the shareholders and creditors in such a situation. Cite the relevant provisions of the Civil Code.