GENERAL BANKING LAW OF 2000

SECTION 47. Foreclosure of Real Estate Mortgage. In the event of

foreclosure, whether judicially or extrajudicially, of any mortgage on
real estate which is security for any loan or other credit
accommodation granted, the mortgagor or debtor whose real
property has been sold for the full or partial payment of his
obligation shall have the right within one year after the sale of the
real estate, to redeem the property by paying the amount due under
the mortgage deed, with interest thereon at the rate specified in
the mortgage, and all the costs and expenses incurred by the bank
or institution from the sale and custody of said property less the
income derived therefrom. However, the purchaser at the auction
sale concerned whether in a judicial or extrajudicial foreclosure
shall have the right to enter upon and take possession of such
property immediately after the date of the confirmation of the
auction sale and administer the same in accordance with law. Any
petition in court to enjoin or restrain the conduct of foreclosure
proceedings instituted pursuant to this provision shall be given due
course only upon the filing by the petitioner of a bond in an amount
fixed by the court conditioned that he will pay all the damages
which the bank may suffer by the enjoining or the restraint of the
foreclosure proceeding. Notwithstanding Act 3135, juridical persons
whose property is being sold pursuant to an extrajudicial
foreclosure, shall have the right to redeem the property in
accordance with this provision until, but not after, the registration
of the certificate of foreclosure sale with the applicable Register of
Deeds which in no case shall be more than three (3) months after
foreclosure, whichever is earlier. Owners of property that has been
sold in a foreclosure sale prior to the effectivity of this Act shall
retain their redemption rights until their expiration. (78a)
BULK SALES LAW
Bulk sales laws are intended to prevent business owners from defrauding or evading creditors by
transferring all (or a substantial portion) of the assets of the business to another individual or entity. The law
is also intended to avert the possibility of businesses selling their assets below fair market value in a
sweetheart sale, in which the owner of the business manages to maintain a degree of control. For example,
the law applies when the business assets are sold to another business that is controlled by the same owner.
Virtually all states have adopted the Uniform Commercial Code that gives notice to creditors of bulk transfers
of a businesss assets.

Generally, when an existing business incorporates there is no plan to defraud creditors. These companies
are simply changing the form of the business, and have every intention of honoring the debts of any
previous incarnations. In cases where the corporation receives the assets of the unincorporated business
and assumes its debts, the bulk sales law is a mere formality. The corporation is accountable for the debts of
the business transferring the assets in proportion to the value of the transferred assets.
Concern arises when the business transferring all of its assets to the corporation has debts that the
corporation does not assume. The corporations officers should confer with a lawyer to ensure that the
corporation will not be held legally responsible for those debts when it takes the assets from the other
business. Bulk sales laws are intended to facilitate settling disputes around this issue.
If the company that is transferring the assets has debts that the corporation is not going to assume, the
Fraudulent Transfers Act requires the corporation to take a number of steps before it can issue equities:

The corporation must prepare a Notice to Creditors of Bulk Transfer. The notice is printed in a
general circulation paper that covers the judicial district in which the property being transferred is
located, at least 12 business days prior to the date of transfer of the property.

The notice must also be published in the judicial district where the principal executive office of the
prior business is located.

Copies must be filed in each judicial district or county where the property is located and where the
prior business had its principal executive office, with the county tax collector and the county recorder,
at least 12 business days prior to the transfer.

If the creditors have no objection to the transfer, the corporation can take possession and title to the assets,
free of all creditors claims. If, on the other hand, the prior businesss creditors have claims against the
property, then special rules come into play under Section 6-106 Commercial Code. When a bulk transfer is
about to be made the notice to creditors (Sections 6-105) has to state:

The names and business addresses of the transferor and transferee

All other business names and addresses used by the transferor within the last three years

Whether all of the debts of the transferor will be paid in full, and if so, the address to which creditors
should send their bills

If the debts of the transferor are not to be paid in full as they become due, or if there is any doubt about that,
the notice must also state the following:

Location and general description of the property to be transferred

Estimate of the transferors total debts

Address where the schedule of property and list of creditors may be inspected

Whether the transfer is to pay existing debts

The amount of the debts and to whom they are owed

Whether the transfer is for new consideration

The time and place where creditors of the transferor should file their claims

The notice must either be delivered personally or be sent by registered or certified mail to everyone on the
list of creditors provided by the transferor. It must also be sent to all other people whom the transferee
knows to hold or declare claims against the transferor.
In cases where the corporation is attempting to gain ownership of the property of a prior business in return
for its stock, and where the creditors are asserting their rights, the corporation must either pay the creditors
(which essentially means they are paying twice for the property) or place the shares in the care of the court
and let it determine ownership. In this scenario the corporation may wind up with unforeseen shareholders,
leading to unforeseen difficulties.