[Answer/discuss the question below, or see 2017 bar exam Mercantile Law Instructions; Also check the other 2017 Mercantile Law Questions:1, 2, 3, 4, 5, 7, 8, 9, 10, 11, and 12; See also 2017 Bar Exam: Information, Discussions, Tips, Questions and Results]
Hortencio owned a modest grocery business in Laguna. Because of the economic downturn, he incurred huge financial liabilities. He remained afloat only because of the properties inherited from his parents who had both come from landed families in Laguna. His main creditor was Puresilver Company (Puresilver), the principal supplier of the merchandise sold in his store. To secure his credit with Puresilver, he executed a real estate mortgage with a dragnet clause involving his family’s assets worth several millions of pesos.
Nonetheless, Hortencio, while generally in the black, now faces a situation where he is unable to pay his liabilities as they fall due in the ordinary course of business. What will you advise him to do to resolve his dire financial condition? Explain your answer. (5%)
Wyatt, an internet entrepreneur, engaged in a sideline business of creating computer programs for selected clients on a per project basis and for servicing basic computer problems of his friends and family members. His main job was being an IT consultant at Futurex Co., a local computer company.
Because of his ill-advised investments in the stock market and the fraud perpetrated against him by his trusted confidante, Wyatt was already drowning in debt, that is, he had far more liabilities than his entire assets.
What legal recourse remained available to Wyatt? Explain your answer. (5%)