Winding up.
SEC. 95. Winding up.—
The Administrator may, subject to the regulations prescribed, by an order in writing, direct that a co-operative shall be liquidated if:—
After an audit under Section eighty-six or an inquiry under Section ninety or an inspection under Section ninety-one; or
On an application made upon a resolution passed by three-fourths of the members of the co-operative present and qualified to vote at a special general assembly called for the purpose; or
On the expiration of its term of existence; or
The co-operative:
has not commenced its business within one year from the date of registration; or
has ceased working for one year; or
has paid in capital below that prescribed in this Act or the regulations; or
has membership below the requirements provided under Section twelve; or
has failed to account to its members for business done or to send to the Administrator the annual report required under Section fifty-three within one year after the close of its fiscal year; or
has been doing business liable to cause injury to the public; or
has persistently neglected orders duly issued under the provisions of this Act, the regulations or the by-laws; or
has not been able to be traced and no member, depositor, creditor and others with interest in it fail to show cause within one year after due notice has been given in the prescribed manner; or
For any other causes as may be prescribed by the regulations, he is of the opinion that the affairs of the cooperative ought to be wound up.
A copy of such order shall be communicated, in the prescribed manner, to the co-operative and to the federation of co-operatives, if any, of which the co-operative is a member.
Any member, depositor or creditor of the co-operative, or any person whose interest could be affected by such order may, within one month from the date of publication of such order as prescribed in the regulations, appeal to the Secretary of Commerce and Industry from such order.
The order shall take effect on the expiration of the time allowed for preferring an appeal under subsection (3) where no appeal is preferred; or where an appeal is preferred, upon rejection of the appeal by the Secretary of Commerce and Industry.
Appointment of a liquidator and necessary assistance.
SEC. 96. Appointment of a liquidator and necessary assistance.—Where an order is issued under Section ninety-five for the winding up of the affairs of a co-operative, the Administrator shall, the provisions of the Rules of Court or of any law to the contrary notwithstanding, appoint a competent person or persons to be liquidator of the cooperative and such other assistance and may retain such of the officers or employees of the co-operative as he deems necessary and fix their remuneration to be paid out of the funds of the co-operative. Pie may remove any such person and appoint another in his place.
Powers of liquidator.
SEC. 97. Powers of liquidator.—
Notwithstanding the provisions of subsections (3) and (4) of Section ninety-five, a liquidator appointed under Section ninety-six shall have the power, from the date of his appointment, to take immediate possession and control of the business, property, assets, claims, books, records, and other documents of every description of the co-operative, and he shall investigate the existing financial condition of the co-operative at the time of his appointment and make an inventory of the property, and shall draw up a balance sheet, all of which shall be forwarded to the Administrator for approval. The Administrator may, if he thinks necessary, consult the general assembly of members before such approval.
Upon the issuance of the order of liquidation of the co-operative the liquidator shall, subject to the regulations and under the control and supervision of the Administrator, have power, as far as is necessary for the beneficial winding up of the affairs of the co-operative, on behalf of the co-operative, in the name of his Office, to carry on the business thereof to do all acts and execute all documents necessary to such winding up, and in particular shall exercise the following powers:
To institute and defend suits and other legal proceedings;
To enter into any compromise or arrangement with any person between whom and the co-operative there exists any dispute and to refer such dispute to arbitration;
To determine from time to time the contribution to be made or remaining to be made by the members or past members or by the estates or nominees, or heirs or legal representatives of deceased members or by any present or former officers, board of directors, committee members to the assets of the co-operative, such contribution including debts due from such members or persons, and to revise from time to time any order of contribution to realize such contributions, until the winding up is completed;
To investigate all claims against the co-operative and, subject to the provisions of this Act, to decide questions of priority arising out of such claims and to pay in full or ratably, as the assets of the co-operative permit; and to apply the surplus, if any, remaining after payment of the claims in full, in the payment of interest from the date of the order of winding up at a rate; to be fixed by him but not exceeding the contract rate;
To pay any class or classes of creditors in full;
To calculate the costs of liquidation and to determine by what persons and in what proportions they shall be borne;
To give such directions in regards to the collection and distribution of the assets of the co-operative for winding up of the affairs of the co-operative;
To fix the time within which creditors shall prove their debts and claims or be included for the benefit of any distribution made before those debts or claims are proved; and
To dispose of, by consulting the members' general assembly, the surplus, if any, remaining after paying the claims against the co-operative in accordance with the purposes of subsection (4) of Section eighty-one and subsection (3) of Section eighty-two:
Provided, That the liquidator shall not determine the contribution, debt or dues to be recovered from any person unless an opportunity has been given to such person to answer the claim.
The liquidator shall not distribute the property of the co-operative to its members until the payment of all debts has been made or secured by deposit for payment and the approval of the Administrator is obtained.
When the work of the liquidator is completed he must without delay draw up and submit a final report to the Administrator and on his approval place the report before the general assembly for its sanction.
When the final report of liquidation has been sanctioned by the general assembly, the liquidator shall deposit the records of the co-operative in such place as the Administrator may direct.
Any person aggrieved by any order of the liquidator, may, in the prescribed manner, appeal to the Administrator against such order within a month from the date of the issue of the order.
Bar of suit during liquidation and cancellation of registration.
SEC. 98. Bar of suit during liquidation and cancellation of registration.—Save in so far as is expressly provided in this Act no court shall take cognizance of any civil matter connected with the liquidation or dissolution of a co-operative under this Act and when a liquidation order has been made no suit or other legal proceeding shall lie or be proceeded with against the co-operative except by leave of the Administrator and subject to such terms as he may impose.
Effect of liquidation of co-operative on past members, or on estate of deceased member.
SEC. 99. Effect of liquidation of co-operative on past members, or on estate of deceased member.—Notwithstanding the provisions of section twenty-nine, when a cooperative is directed to be liquidated under Section ninety-five, the liability of a past member and the estate of a deceased member of the co-operative, as it existed on the date of the winding up order, shall continue until all the liabilities of the co-operative are settled.
Cancellation of liquidation or registration.
SEC. 100. Cancellation of liquidation or registration.—
The Administrator may, when the members or the federation of co-operatives of which the co-operative is a member have satisfied him that they can operate the co-operative, cancel the order for the liquidation of the co-operative.
In any other case, the Administrator shall, after considering the report of the liquidator and the sanction of the general assembly, if any, order the registration of the co-operative to be cancelled and the co-operative shall cease to exist as a corporate body from the date of such order.
Arbitration.
SEC. 101. Arbitration.—
All civil controversies touching the constitution or business of a co-operative arising between members or past members of the co-operative or persons claiming through a member or past member or between members or past members or persons so claiming and any officer, director, committee member, agent or employee of the co-operative past or present, or between co-operative or its board, committee and any officer, director, committee member, agent, member or employee of the co-operative past or present, shall be referred to the Administrator for decision by himself or his nominee or, if either of the parties involved in the controversy so desires, to arbitration of three persons one of whom shall be the Administrator or his nominee and the two to be nominated by each of the parties concerned.
A controversy shall include claims by a co-operative for debts or demands due from persons noted under this subsection whether such debts or demands be admitted or not.
Provided, That if the controversy between parties is one involving complicated questions of law and fact, the Administrator may, if he thinks fit, suspend the proceedings and advise the parties to file a regular suit in a court«having jurisdiction. If no proceedings are instituted by either of the parties within six months from the date of such advice, the Administrator shall decide the controversy himself.
Where controversies are referred to arbitrators under subsection (1) the procedure and provisions of Republic Act Numbered Eight hundred seventy-six (The Arbitration Law) shall be applicable, as far as they are not inconsistent with the provisions of this Act and the regulations, and the Administrator shall exercise the authority vested in Courts of First Instance under said Act.
The awards made by the arbitrators or the nominees of the Administrator shall be appealable to the Administrator and the award made by the Administrator shall be appealable to the Secretary of Commerce and Industry.
Any award made under this section shall not be called in question by courts except on matters of law and shall be deemed to be a decree of the court to which it is sent for execution.
Power to direct payment of dues.
SEC. 102. Power to direct payment of dues.—Notwithstanding the provisions on arbitration, the Administrator may, on his own initiative or on the written request of his assistants appointed under Section eight hereof, or of a co-operative or of a federation of co-operatives for the recovery of any loan or amount due by a defaulting member, after due inquiry, make an award directing payment by such member of the amount found to be due.
Powers of Administrator and others.
SEC. 103. Powers of Administrator and others.—The Administrator, subject to any restrictions prescribed in the regulations, the auditor under section eighty-six, the liquidator under section ninety-six, the arbitrator under section one hundred one, the person appointed under section ninety-four or any person conducting an inquiry under section ninety, or an inspection under section ninety-one, shall at all reasonable times have free access to the books, accounts, vouchers, documents, securities, cash and other properties belonging to or in the custody of a cooperative and shall, in so far as is necessary for carrying out of any of the purposes of this Act, have power to summon and enforce attendance of witnesses and parties concerned who, he has reason to believe, can give valuable information in regard to any transaction of the co-operative or the management of its affairs and to compel them to give evidence upon oath and to compel the production of any books, accounts, vouchers, documents, securities, cash and other properties relating to the affairs of the cooperative at any place at the headquarters of the cooperative or at the office of the Administrator, by the same means and, as far as possible, in the same manner as that provided for the courts in civil cases.
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
