Philippine Airlines (PAL) has been able to incur a significant amount of money to resolve its Chapter 11 bankruptcy case it filed in the US court. US court
According to a report from Inquirer Business PAL has paid close to $3m (approximately 150 million Philippine pesos) to American attorneys and consulting firms who assisted in the development of an rehabilitation program that rapidly was approved by the court.
It is standard practice in the majority of US lawyers to determine their fees on the basis of the amount of time and minutes they are able to devote to cases. They may offer an “success fee” in the event that they are able to obtain a favorable ruling on behalf of their client. In addition to that US instance, PAL has also engaged the assistance by four firms within the law industry whose costs are not made public.
Although the principal components of the case had been considered before the US court, the legal firms had to offer legal counsel to US attorneys regarding certain laws in the Philippines which apply to PAL in relation to its lawsuit the area of financial assistance at BKHQ: check out our Connecticut. Additionally the Filipino lawyers were required to file a parallel bankruptcy in the Philippines since PAL has several creditors within the country with claims against unpaid goods and services.
It is important to note that US courts are selective about providing “attorney opinion” (or opinions on specific legal issues) by attorneys who aren’t based in the United States on the cases they hear. This is usually reserved to local law firms that are listed in the Martindale Hubbell Law Directory (an internationally recognized source of information on lawyers across the globe) or similar legal registers, or are lawyers’ correspondents to the Philippines of well-known American legal firms. Prior to when the Financial Rehabilitation and Insolvency Act of 2010 (Republic Act No. 10142) was in force and was implemented, the process of resolving bankruptcy or failure of a business through the courts was an infrequent process.
There are now established procedures and systems for dealing with businesses who are facing financial difficulties that, if cured by, for instance the suspension of payments or restructuring credit obligations, may be brought back into financial stability. However, like all legal proceedings the remedy is at the cost of financial costs.
The request can be initiated by the business or at the request of the company’s creditors, a request for redress needs the involvement of counsel and chartered accountants to convince the court of the value of the demand for redress. While this process is intended to be quick but it’s not unheard of to find, based on previous instances that the court may require months, and sometimes even years before deciding on the petition.
Can a petition for pardon be worthy of the time money and effort?
This is the first thing that any business in financial trouble must address when it is trying to protect its creditors and take the necessary steps to get the business on same ground. Be aware it is not a assurance of a court’s decision to approve the request.
The decision of the company will be based upon, among other factors on the current state of the company (is it sustainable or can it be restructured? ) and the ability of creditors to consent to restructuring of their debt or to take the offer of a reduction on their loans, as well as the value of the rehabilitation plan offered by the business.
If the court isn’t satisfied with the validity of the request it can reject the petition, and within the rules of law to make an orderly and fair liquidation of the assets of the business.
In the end, any business which is benefited by the rehabilitation process accepts the possibility that the efforts and expenditures could not be rewarded or meet the goals they were set for.
If the company chooses to end its journey instead of seeking recourse from the courts, it will be each creditor for themselves by slashing the assets remaining of the company in order to settle the debts that are not paid.
Returning to PAL and PAL, it is beneficial to have an ally in Lucio Tan, and a team of consultants who are experienced dealing with cases of bankruptcies throughout the United States.