!e$ An% )o*+o*ises )o*+o*ises on a*ounts a*ounts o+ +es)heduling +es)heduling o ti*ing ti*ing o a%*ent a%*ents s 6% the de6to+ de6to+ shall 6e 6inding 6inding on )+edito )+edito+s +s +ega+dl +ega+dless ess o &hethe+ o+ not the lan is su))essull% i*le*ented. !0*hasis ou+s.$ To st+ess, st+ess, the +eha6ilitat +eha6ilitation ion lan, on)e a+oved, is 6inding 6inding uon the de6to+ and all e+sons &ho *a% 6e ae)ted 6% it, in)luding the )+edito+s, &hethe+ su)h e+sons have o+ have not a+ti)iated in the +o)eedings o+ have oosed the lan o+ &hethe+ thei+ )lai*s have o+ have not 6een s)heduled.
>H
et
a4
vs. vs.
The sta% o+de+ shall 6e ee)tive +o* the date o its issuan)e until the dis*is dis*issal sal o the etiti etition on o+ the te+*in te+*inati ation on o the +eha6il +eha6ilita itatio tion n +o)eedings. # Unde+ the Inte+i* Rules, the etition shall 6e dis*issed i no +eha6ilitation lan is a+oved 6% the )ou+t uon the lase o 8 da%s +o* the date o the initial hea+ing. The )ou+t *a% g+ant an etension 6e%ond 6e%ond this this e+iod e+iod onl% i it aea+s aea+s 6% )onvin) )onvin)ing ing and )o*el )o*ellin ling g eviden)e that the de6to+ *a% su))essull% 6e +eha6ilitated. In no instan)e, ho&eve+, shall the e+iod o+ a+oving o+ disa+oving a +eha6ilitation lan e)eed 8 *onths +o* the date o iling o the etition 5 To&n and Count+% 0nte++ises, In). vs. uisu*6ing +., #8> /CRA >8 G>>H
Ba%a Ba%an n
In o+de+ to ee)tivel% ee+)ise su)h Fu+isdi)tion, /e)tion # !)$, PD 9>5A e*o&e+s the Regional T+ial Cou+t to aoint one o+ *o+e +e)eive+s o the +oe+t%, +eal and e+sonal, &hi)h is the su6Fe)t o the ending a)tion 6eo+e the Co**ission &heneve+ &heneve+ ne)essa+% ne)essa+% in o+de+ to +ese+ve +ese+ve the +ights o the a+ties5litigants andKo+ +ote)t the inte+est o the investing u6li) and )+edito+s. Unde+ /e)tion #, Rule o the Inte+i* Rules, i the )ou+t inds the etition to 6e sui)ient in o+* and su6stan)e, it shall issue, not late+ than ive !"$ da%s +o* the iling o the etition, an O+de+ &ith the ollo&ing e+tinent ee)tsE !a$ aointing a Reha6ilitation Re)eive+ and iing his 6ond !6$ sta%ing sta%ing eno+) eno+)e*e e*ent nt o all )lai*s, )lai*s, &hethe &hethe++ o+ *one% *one% o+ othe+&ise and &hethe+ su)h eno+)e*ent is 6% )ou+t a)tion o+ othe+&ise, against the de6to+, its gua+anto+s and su+eties not solida+il% lia6le &ith the de6to+ !)$ +ohi6iting the de6to+ +o* selling, en)u*6e+ing, t+anse++ing, o+ disosing in an% *anne+ an% o its +oe+ties e)et in the o+dina+% )ou+se o 6usiness !d$ +ohi6iting the de6to+ +o* *a'ing an% a%*ent o its lia6ilities outstanding as at the date o iling o the etition . . . !0*hasis sulied$
;ie&ed ;ie&ed in the o+egoing o+egoing light, light, the CA )annot )annot 6e aulte aulted d o+ uholding the RTC?s g+ant o a &+it o ossession in avo+ o Met+o6an' on anua+% >". I the u+)hase+ at the o+e)losu+e sale, uon osting o the +e=uisite 6ond, is entitled to a &+it o ossession even du+ing the +ede*tion e+iod unde+ /e)tion 7 o A)t @@", as a*ended, it has 6een )onsistentl% +uled that the+e is no +eason to &ithhold said &+it ate+ the ei+ation o the +ede*tion e+iod &hen no +ede*tion is ee)ted 6% the *o+tgago+. Indeed, the +ule is settled that the +ight o the u+)hase+ to the ossess ossession ion o the o+e)lo o+e)losed sed +oe+ +oe+t% t% 6e)o*es 6e)o*es a6solut a6solute e ate+ ate+ the +ede*tion e+iod, &ithout a +ede*tion 6eing ee)ted 6% the +oe+t% o&ne+ o&ne+.. /in)e /in)e the 6asis o this this +ight +ight to ossess ossession ion is the u+)hase+ u+)hase+?s ?s o&ne+shi o the +oe+t%, the *e+e iling o an e a+te *otion o+ the issuan)e o the &+it o ossession &ould sui)e, and no 6ond is +e=ui+ed. 5 /io)hi 2ishe+% 0nte++ises, In). vs. BPI, #"9 /CRA 87 G>H As +ovided in the Inte+i* Rules, the 6asi) +o)edu+e is as ollo&sE ollo&sE . The etition is iled &ith the a+o+iate Regional T+ial Cou+t >. I the etition is ound to 6e sui)ient in o+* and su6stan)e, the t+ial )ou+t shall issue a /ta% O+de+, &hi)h shall +ovide, a*ong othe+s, o+ the aoint*ent o a Reha6ilitati Reha6ilitation on Re)eive+ the iing iing o the initial initial hea+ing on the etition a di+e)tive to the etitione+ to u6lish the O+de+ in a ne&sae+ o gene+al )i+)ulation in the Philiines on)e a &ee' o+ t&o !>$ )onse)utive &ee's and a di+e)tive to all )+edito+s and all inte+ested
171 Corporation Law 2016: JVL & JSD
a+ties !in)luding the /e)u+ities and 0)hange Co**ission$ to ile and se+ve on the de6to+ a ve+iied )o**ent on o+ oosition to the etition, &ith suo+ting aidavits and do)u*ents @. Pu6li)ation o the /ta% O+de+ . Initial hea+ing on an% *atte+ +elating to the etition o+ on an% )o**ent andKo+ oosition iled in )onne)tion the+e&ith. I the t+ial )ou+t is satisied satisied that the+e is *e+it in the etition, etition, it shall give due )ou+se to the etition ". Ree Ree++ ++al al o+ o+ evalu evaluat atio ion n o the the +eha +eha6i 6ili lita tati tion on lan lan to the the +eha6ilitation +e)eive+ &ho shall su6*it his +e)o**endations to the )ou+t #. Modi Modii i)a )ati tions ons o+ +evi +evisi sion ons s o the the +eha6 +eha6il ilit itat atio ion n lan lan as ne)essa+% 7. /u6*is /u6*issio sion n o inal inal +eha6il +eha6ilita itatio tion n lan lan to the t+ial t+ial )ou+t )ou+t o+ a+oval 8. A+ovalKdisa+oval o +eha6ilitation lan 6% the t+ial )ou+t As an oi)e+ o the )ou+t and an ee+t, the +eha6ilitation +e)eive+ la%s an i*o+tant i*o+tant +ole in )o+o+ate )o+o+ate +eha6ilitation +eha6ilitation +o)eedings. +o)eedings. In P+%)e Co+o+ation v. Cou+t o Aeals, 7 the Cou+t held that, (the u+ose o the la& in di+e)ting the aoint*ent o +e)eive+s is to +ote)t the inte+ests o the )o+o+ate investo+s and )+edito+s.( 8 /e)tion o the Inte+i* Rules o P+o)edu+e P+o)edu+e on Co+o+ate Co+o+ate Reha6ilitation Reha6ilitation enu*e+ates the o&e+s and un)tions o the +eha6ilitati +eha6ilitation on +e)eive+E !$ ve+i% the a))u+a)% a))u+a)% o the etition, in)luding its annees su)h as the s)hedule o de6ts and lia6ilities and the invento+% o assets su6*itted in suo+t o the etition !>$ a))et and in)o+o+ate, &hen Fustiied, a*end*ents to the s)hedule o de6ts and lia6iliti lia6ilities es !@$ +e)o**end +e)o**end to the )ou+t the disallo&an) disallo&an)e e o )lai*s and +eFe)tion o a*end*ents to the s)hedule o de6ts and lia6ilities that la)' sui)ient +oo and Fustii)ation !$ su6*it to the )ou+t and *a'e availa6le o+ +evie& 6% the )+edito+s a +evised s)hedule o de6ts and lia6ilities !"$ investigate the a)ts, )ondu)t, +oe+ties, lia6ilities, and inan)ial )ondition o the de6to+, the oe+ation o its 6usiness and the desi+a6ilit% o the )ontinuan)e the+eo, and an% othe+ *atte+ +elevant to the +o)eedings o+ to the o+*ulation o a +eha6ilitation lan !#$ ea*ine unde+ oath the di+e)to+s di+e)to+s and oi)e+s oi)e+s o the de6to+ and an% othe+ &itnesses that he *a% dee* a+o+iate !7$ *a'e availa6le to the )+edito+s do)u*ents and noti)es noti)es ne)essa+% ne)essa+% o+ the* to ollo& ollo& and a+ti)iate a+ti)iate in the +o)eedings +o)eedings !8$ +eo+t to the )ou+t an% a)t as)e+tained 6% hi* e+taining to the )auses
o the de6to+?s +o6le*s, +aud, +ee+en)es, disositions, en)u*6+an)es, *is)ond *is)ondu)t u)t,, *is*an *is*anage* age*ent ent,, and i++egul i++egula+i a+itie ties s )o**it )o**itted ted 6% the sto)'holde+s, di+e)to+s, *anage*ent, o+ an% othe+ e+son !9$ e*lo% su)h e+son o+ e+sons su)h as la&%e+s, a))ountants, a+aise+s, and sta sta as a+e a+e ne)es ne)essa sa+% +% in e+o e+o+* +*in ing g his his un)t un)tio ions ns and dutie duties s as +eha6ilitation +e)eive+ !$ *onito+ the oe+ations o the de6to+ and to i**edi i**ediate atel% l% +eo+t +eo+t to the )ou+t )ou+t an% *ate+i *ate+ial al adve+se adve+se )hange )hange in the de6to+ de6to+?s ?s 6usiness 6usiness !$ !$ evaluat evaluate e the eisti eisting ng assets assets and lia6il lia6iliti ities, es, ea+nings and oe+ations o the de6to+ !>$ dete+*ine and +e)o**end to the )ou+t the 6est &a% to salvage and +ote)t the inte+ests o the )+edito+s, sto)'holde+s, and the gene+al u6li) !@$ stud% the +eha6ilitation lan +oosed 6% the de6to+ o+ an% +eha6ilitation lan su6*itted du+ing the +o)eedings, togethe+ &ith an% )o**ents *ade the+eon !$ +ohi6it and +eo+t +eo+t to the )ou+t )ou+t an% en)u*6+ en)u*6+an)e an)e,, t+ans t+anse+ e+,, o+ disosi disositi tion on o the de6to+?s +oe+t% outside o the o+dina+% )ou+se o 6usiness o+ &hat is allo&ed 6% the )ou+t !"$ +ohi6it and +eo+t to the )ou+t an% a%*ents outside o the o+dina+% )ou+se o 6usiness !#$ have unli*ited a))ess to the de6to+? de6to+?s s e*lo% e*lo%ees, ees, +e*is +e*ises, es, 6oo's, 6oo's, +e)o+ds +e)o+ds,, and inan)i inan)ial al do)u*ents do)u*ents du+ing 6usiness 6usiness hou+s !7$ inse)t, inse)t, )o%, hoto)o%, hoto)o%, o+ hotog+ah an% do)u*ent, ae+, 6oo', a))ount, o+ lette+, &hethe+ in the ossess ossession ion o the de6to+ de6to+ o+ othe+ othe+ e+sons e+sons !8$ !8$ gain gain ent+% ent+% into into an% +oe+ +oe+t% t% o+ the u+ose u+ose o inse)t inse)ting ing,, *easu+i *easu+ing, ng, su+ve% su+ve%ing, ing, o+ hotog+ahing hotog+ahing it o+ an% designated +elevant o6Fe)t o+ oe+ation oe+ation the+eon !9$ ta'e ossession, )ont+ol, and )ustod% o the de6to+?s assets !>$ noti% the a+ties and the )ou+t as to )ont+a)ts that the de6to+ has de)ided to )ontinue to e+o+* o+ 6+ea)h !>$ 6e notiied o, and to attend all *eetings o the 6oa+d o di+e)to+s and sto)'holde+s o the de6to+ !>>$ +e)o**end an% *odii)ation o an a+oved +eha6ilitation lan as he *a% dee* a+o+iate !>@$ 6+ing to the attention o the )ou+t an% *ate+ial )hange ae)ting the de6to+?s a6ilit% to *eet the o6ligations unde+ the +eha6ilitation lan !>$ +e)o**end the aoint*ent o a *anage*ent )o**ittee in the )ases +ovided o+ unde+ P+esidential De)+ee No. 9>5A, as a*ended !>"$ +e)o**end the te+*ination o the +o)eedings and the dissolution o the de6to+ i he dete+*ines that the )ontinuan)e in 6usiness o su)h entit% is no longe+ easi6le o+ +oita6le o+ no longe+ &o+'s to the 6est inte+est o the sto)'holde+s, a+ties5litigants, )+edito+s, o+ the gene+al u6li) and !>#$ al% to the )ou+t o+ an% o+de+ o+ di+e)tive that he *a% dee* ne)essa+% o+ desi+a6le to aid hi* in the ee+)ise o his o&e+s.
172 Corporation Law 2016: JVL & JSD
5 Molina vs. Pa)ii) Plans, In). #"" /CRA @"# G>H The Cou+t?s Cou+t?s +uling +uling in the *o+e +e)ent +e)ent )ase o Castil Castillo lo v. Uni&ide Uni&ide 5A, as a*ended. a*ended. /e)tion #!)$ o the la& *andates that, uon aoint*ent aoint*ent o a *anage*ent )o**ittee, +eha6ilitation +e)eive+, 6oa+d, o+ 6od%, all a)tions o+ )lai*s )lai*s agains againstt )o+o+ )o+o+ati ations, ons, a+tne+ a+tne+shi shis s o+ asso)i asso)iati ations ons unde+ unde+ *anage*ent o+ +e)eive+shi ending 6eo+e an% )ou+t, t+i6unal, 6oa+d, o+ 6od% shall 6e susended. It *ate+iall% +ovidesE /e)tion # !)$. . . . . . . P+ovided, inall%, that uon aoint*ent o a *anage*ent )o**ittee, +eha6ilitation +e)eive+, 6oa+d o+ 6od%, u+suant to this De)+ee, all a)tions o+ )lai*s )lai*s agains againstt )o+o+ )o+o+ati ations, ons, a+tne+ a+tne+shi shis s o+ asso)i asso)iati ations ons unde+ unde+ *anage*ent o+ +e)eive+shi ending 6eo+e an% )ou+t, t+i6unal, 6oa+d o+ 6od%, shall 6e susended a))o+dingl%. In 2inasi 2inasia a Invest Invest*ent *ents s and 2inan)e 2inan)e Co+o+ Co+o+ati ation on v. Cou+t o Aeals G.R. No. 7>, O)to6e+ 7, 99, >@7 /CRA #, "H, the te+* te+* ()lai* ()lai*(( has 6een )onst+ )onst+ued ued to +ee+ +ee+ to de6ts o+ de*ands de*ands o a e)unia+% natu+e, o+ the asse+tion to have *one% aid. It &as +ee++ed to, in A++an:a v. B.2. -o*es, In)., G@89 Phil. @8H, as an a)tion involving *oneta+% )onside+ations and in Philiine Ai+lines v. u+ang'ing G@8 Phil. @7"H, the te+* &as identiied identiied as the +ight to a%*ent, &hethe+ o+ not it is +edu)ed +edu)ed to Fudg*ent, Fudg*ent, li=uidated o+ unli=uidated unli=uidated,, ied o+ )ontingent, )ontingent, *atu+ed o+ un*atu+ed, disuted o+ undisuted, legal o+ e=uita6le, and se)u+ed se)u+ed o+ unse)u+ed. unse)u+ed. 2u+the+*o+e, 2u+the+*o+e, the a)tions that &e+e susended )ove+ all )lai*s against a dist+essed )o+o+ation &hethe+ o+ da*ages ounded ounded on a 6+ea)h o )ont+a)t o )a++iage, )a++iage, la6o+ )ases, )olle)tion )olle)tion suits o+ an% othe+ )lai*s o a e)unia+% natu+e. Mo+e i*o+tantl%, the ne& +ules on )o+o+ate +eha6ilitation, as &ell as the inte+i* +ules, +ovide an all5
en)o*a en)o*assi ssing ng deini deinitio tion n o the te+* te+* and, thus, in)lud in)lude e all )lai*s )lai*s o+ de*ands o &hateve+ natu+e o+ )ha+a)te+ against a de6to+ o+ its +oe+t%, &hethe+ o+ *one% o+ othe+&ise. The+e is no dou6t that etitione+?s )lai* in this )ase, a+ising as it does +o* his alleged illegal dis*issal, is a )lai* )ove+ed 6% the susension o+de+ issued 6% the /0C, as it is one o+ e)unia+% )onside+ation. u+is u+is+ud +uden)e en)e is settle settled d that that the susen susension sion o +o)eed +o)eeding ings s +ee++ed to in the la& unio+*l% alies to (all a)tions o+ )lai*s( iled against a )o+o+ation, a+tne+shi o+ asso)iation unde+ *anage*ent o+ +e)eive+shi +e)eive+shi, , &ithout &ithout distin)tio distin)tion, n, e)et onl% those eenses in)u++ed in)u++ed in the o+dina+% )ou+se o 6usiness. In the ot5)ited )ase o Ru66e+&o+ld !Phils.$, In). v. N4RC G.R. No. >#77@, A+il , 999, @" /CRA 7>H, the Cou+t noted that aside +o* the given e)etion, the la& is )lea+ and *a'e *a'es s no dist distin in)t )tio ion n as to the the )lai )lai*s *s that that a+e a+e sus susend ended ed on)e on)e a *anage* *anage*ent ent )o**it )o**ittee tee is )+eated )+eated o+ a +eha6i +eha6ilit litati ation on +e)eiv +e)eive+ e+ is aointed. aointed. /in)e the la& *a'es no distin)tion distin)tion o+ ee*tions, neithe+ should this Cou+t. U6i le non distinguit ne) nos distingue+e de6e*os. Philiine Ai+lines, In). v. a*o+a G.R. No. ##99#, 2e6+ua+% #, >7, " /CRA "8, #"H de)la+es that the auto*ati) susension o an a)tion o+ )lai*s )lai*s against against a )o+o+a )o+o+atio tion n unde+ unde+ a +eha6il +eha6ilita itatio tion n +e)eiv +e)eive+ e+ o+ *anage*ent )o**ittee e*6+a)es all hases o the suit, that is, the enti+e +o)eedings o an a)tion o+ suit and not Fust the a%*ent o )lai*s. The +eason 6ehind the i*e+ative i*e+ative natu+e o a susension susension o+ sta% o+de+ in +elation to the )+edito+s? )lai*s )annot 6e do&nla%ed, o+ indeed the indis)+i*inate susension o a)tions o+ )lai*s intends to eedite the +eha6ilita +eha6ilitation tion o the dist+essed )o+o+ation )o+o+ation 6% ena6ling ena6ling the *anage*ent )o**ittee )o**ittee o+ the +eha6ilitat +eha6ilitation ion +e)eive+ +e)eive+ to ee)tivel ee)tivel% % ee+)ise ee+)ise itsKhis itsKhis o&e+s +ee +o* an% Fudi)ial o+ et+aFudi)ial inte+e+en)e that *ight undul% hinde+ o+ +event the +es)ue o the de6to+ )o*an%. To allo& su)h othe+ a)tions to )ontinue &ould onl% add to the 6u+den o the *anage*ent )o**ittee )o**ittee o+ +eha6ilitat +eha6ilitation ion +e)eive+, +e)eive+, &hose ti*e, eo+t and +esou+)es +esou+)es &ould 6e &asted &asted in deending )lai*s against the )o+o+ation, )o+o+ation, instead o 6eing di+e)ted to&a+d its +est+u)tu+ing and +eha6ilitation. 5 BPI 2a*il% /avings Ban', In). vs. P+%)e ases, In)., #"@ /CRA > G>H
173 Corporation Law 2016: JVL & JSD
/e)tio /e)tion n " o the Inte+i Inte+i* * Rules Rules on Co+o+ Co+o+ate ate Reha6i Reha6ilit litati ation on +ovides that (!t$he +evie& o an% o+de+ o+ de)ision o the )ou+t o+ an aeal the+e+o* shall 6e in a))o+dan)e &ith the Rules o Cou+t . . . .( Unde+ A.M. No. 5855/C, 5855/C, a etition etition o+ )o+o+ate )o+o+ate +eha6ilitation +eha6ilitation is )onside+ed a se)ial +o)eeding. > Thus, the e+iod o aeal +ovided in a+ag+ah 9 !6$ o the Inte+i* Rules Relative to the I*le*entation o Batas Pa*6ansa Blg. >9 o+ se)ial +o)eedings shall al%, > that is, the e+iod o aeal shall 6e @ da%s sin)e a +e)o+d o aeal is +e=ui+ed. 5 APR4 Develo*ent Co+. vs. /e)u+it% Ban' Co+o, #" /CRA #" G>H Indeed, Indeed, /e)tion /e)tion # !6$ o the Inte+i* Rules o P+o)edu+e o Co+o+ate Co+o+ate Reha6ilitation &hi)h the aellate )ou+t )ited in the ea+lie+5=uoted o+tion o its de)ision, +ovides +ovides that a sta% o+de+ does not al% to su+eties su+eties &ho a+e solida+il% lia6le &ith the de6to+. In 4i*son and A+ollado?s )ase, thei+ solida+% lia6ilit% &ith APR4 is do)u*ented. 4ia6ilit% o the /u+et% The lia6ilit% o the /u+et% is solida+% and not )ontingent uon the u+suit 6% the Ban' o &hateve+ +e*edies it *a% have against the De6to+ o+ the )ollate+alsKli )ollate+alsKliens ens it *a% ossess. I an% o the ua+anteed O6ligation is not aid o+ e+o+*ed on due date !at stated *atu+it% o+ 6% a))ele+ation$, the /u+et% shall, &ithout need o+ an% noti)e, de*and o+ an% othe+ a)t o+ deed, i**ediatel% 6e)o*e lia6le the+eo+ and the /u+et% shall a% and e+o+* the sa*e. 4i*son 4i*son and A+oll A+ollado ado,, as su+eti su+eties, es, &hose &hose lia6il lia6ilit% it% is solida solida+% +% )annot, )annot, the+eo+e, )lai* +ote)tion +o* the +eha6ilitation )ou+t, the% not 6eing the inan)iall%5dist+essed )o+o+ation that *a% 6e +esto+ed, not to *ention that the +eha6ilitation )ou+t has no Fu+isdi)tion ove+ the*. A+ti)le ># o the Civil Code )lea+l% is not on thei+ sideE ART. >#.The )+edito+ *a% +o)eed against an% one o the solida+% de6to+s o+ so*e o+ all o the* si*ultaneousl%. The de*and *ade against an% an% one one o the* the* shal shalll not not 6e an o6st o6sta) a)le le to thos those e &hi) &hi)h h *a% *a% su6se=uentl% su6se=uentl% 6e di+e)ted against the othe+s, so long as the de6t has not 6een ull% )olle)ted.
Co+o+ate +eha6ilitation is deined as (the +esto+ation o the de6to+ to a osition o su))essul oe+ation and solven)%, i it is sho&n that its )ontinuan)e o oe+ation is e)ono*i)all% easi6le and its )+edito+s )an +e)ove+ 6% &a% o the +esent value o a%*ents +oFe)ted in the lan *o+e *o+e i the the )o+ )o+o+ o+at atio ion n )onti )ontinue nues s as a going going )on)e )on)e+n +n than than i it is i**ediatel% i**ediatel% li=uidated.( li=uidated.( "# It &as i+st int+odu)ed int+odu)ed in the Philiine Philiine legal s%ste* th+ough PD 9>5A, as a*ended. "7 The intention o the la& is (to ee)t ee)t a easi6le easi6le and via6le +eha6ilitati +eha6ilitation on 6% +ese+ving a lounde+ing lounde+ing 6usiness as a going )on)e+n, 6e)ause the assets o a 6usiness a+e oten *o+e valua6le &hen so *aintained than the% &ould 6e &hen li=uidated.( "8 This This )on)et )on)et o +ese+ +ese+vin ving g the )o+o+ )o+o+ati ation?s on?s 6usiness 6usiness as a going going )on)e+n &hile it is unde+going +eha6ilitation is )alled de6to+5in5ossession o+ de6to+5in5la)e. This *eans that the de6to+ )o+o+ation !the )o+o+ation unde+going +eha6ilitation$, th+ough its Boa+d o Di+e)to+s and )o+o+ate oi)e+s, +e*ains in )ont+ol o its 6usiness and +oe+ties, su6Fe)t onl% to the *onito+ing o the aointed +eha6ilitation +e)eive+. "9 The )on)et o de6to+5in5 de6to+5in5ossessi ossession, on, is )a++ied )a++ied out *o+e a+ti)ula+l a+ti)ula+l% % in the /0C Rules, the +ule that is +elevant to the instant )ase. # It states the+ein that the inte+i* +eha6ilitation +e)eive+ o the de6to+ )o+o+ation (does not ta'e ove+ the )ont+ol and *anage*ent o the de6to+ )o+o+ation.( # 4i'e&ise, the +eha6ilitation +e)eive+ that &ill +ela)e the inte+i* +e)eive+ is tas'ed onl% to *onito+ the su))essul i*le*entation o the +eha6ilitation lan. #> The+e is nothing in the )on)et o )o+o+ate )o+o+ate +eha6ilitation +eha6ilitation that &ould iso a)to de+iv de+ive e #@ the Boa+d o Di+e)t Di+e)to+s o+s and )o+o+ate )o+o+ate oi)e+s oi)e+s o a de6to+ de6to+ )o+o+ation, su)h as A/B Realt%, o )ont+ol su)h that it )an no longe+ eno+)e its +ight to +e)ove+ its +oe+t% +o* an e++ant lessee. To 6e su+e, )o+o+ate +eha6ilitation i*oses seve+al +est+i)tions on the de6to+ )o+o+ation. )o+o+ation. The +ules enu*e+ate enu*e+ate the +ohi6ited +ohi6ited )o+o+ate a)ti a)tion ons s and t+ans t+ansa) a)ti tions ons # !*os !*ostt o &hi) &hi)h h invol involve ve so*e so*e 'ind 'ind o disos disositi ition on o+ en)u*6+ en)u*6+an)e an)e o the )o+o+ )o+o+ati ation? on?s s assets$ assets$ du+ing du+ing the enden)% o the +eha6ilitation +o)eedings 6ut none o &hi)h tou)h on the de6to+ )o+o+ation? )o+o+ation?s s +ight to sue. The i*li)ation i*li)ation the+eo+e the+eo+e is that ou+ )on)et o +eha6ilitation does not +est+i)t this a+ti)ula+ o&e+, save o+ the )aveat that all its a)tions a+e *onito+ed )losel% 6% the +e)eive+, &ho )an see' see' an annul*e annul*ent nt o an% +ohi6 +ohi6ite ited d o+ ano*alo ano*alous us t+ansa) t+ansa)tio tion n o+ ag+ee*ent ente+ed into 6% the oi)e+s o the de6to+ )o+o+ation.
5 U*ale v. A/B Realt% Co+o+ation, #>" /CRA >" G>H
174 Corporation Law 2016: JVL & JSD
Indeed, PD 9>5A, as a*ended, +ovides that the +e)eive+ shall have the o&e+s enu*e+ated unde+ Rule "9 o the Rules o Cou+t. But Rule "9 is a +ule o gene+al ali)ation. It alies to die+ent 'inds o +e)e +e)eiv ive+ e+s s +eha6 +eha6il ilit itat atio ion n +e)e +e)eiv ive+ e+s, s, +e)e +e)eiv ive+ e+s s o entit entitie ies s unde+ unde+ *anage* *anage*ent ent,, o+dina+% o+dina+% +e)eiv +e)eive+s e+s,, +e)eiv +e)eive+s e+s in li=uid li=uidati ation on and o+ die+ die+ent ent 'inds o situat situation ions. s. >, >
Reha6ilitation +o)eedings in ou+ Fu+isdi)tion have e=uita6le and +eha6ilitative u+oses. On the one hand, the% atte*t to +ovide o+ the ei)ient ei)ient and e=uita6le e=uita6le dist+i6ution dist+i6ution o an insolvent insolvent de6to+?s +e*aining assets to its )+edito+s and on the othe+, to +ovide de6to+s &ith a (+esh sta+t( 6% +elieving the* o the &eight o thei+ outstanding de6ts and e+*itting the* to +eo+gani:e thei+ aai+s. 55 55 The The u+ose o +eha6ilitation +eha6ilitation +o)eedings +o)eedings is to ena6le the )o*an% to gain a ne& 4ease on lie and the+e6% allo& )+edito+s to 6e aid thei+ )lai*s +o* its ea+nings. The dete+*ination o the t+ue and )o++e)t a*ount due etitione+ is i*o+tant in assessing &hethe+ 2ADI *a% 6e su))essull% +eha6i +eha6ilit litate ated. d. It is thus thus ne)essa ne)essa+% +% that that etiti etitione+ one+ 6e given given the oo+tunit% to 6e hea+d 6% the +eha6ilitation )ou+t. The )ou+t should ad*it etitione+?s etitione+?s )o**ent on o+ oosition to 2ADI?s 2ADI?s etition etition o+ +eha6ilitat +eha6ilitation ion and allo& etitione+ etitione+ to a+ti)iate a+ti)iate in the +eha6ilitat +eha6ilitation ion +o)eedings to dete+*ine i indeed 2ADI )ould *aintain its )o+o+ate eiste eisten)e n)e.. A +e*and +e*and o the )ase )ase to the +eha6i +eha6ili litat tation ion )ou+t )ou+t is, the+eo+e, i*e+ative. To 6e su+e, the su))essul +eha6ilitation o a dist+essed )o+o+ation &ill 6eneit its de6to+s, )+edito+s, e*lo%ees, and the e)ono*% in gene+al. 5 Castillo vs. Uni&ide H
u+is+uden)e is settled that the susension o +o)eedings +ee++ed to in the la& unio+ unio+*l% *l% alies alies to (all (all a)tion a)tions s o+ )lai*s( )lai*s( iled iled against against a )o+ )o+o+ o+at atio ion, n, a+t a+tne ne+sh +shi i o+ asso) asso)ia iati tion on unde+ unde+ *anag *anage* e*en entt o+ +e)eive+shi +e)eive+shi, , &ithout &ithout distin)tio distin)tion, n, e)et onl% those eenses in)u++ed in)u++ed in the o+dina+% )ou+se o 6usiness. 6usiness. >> In the ot5)ited ot5)ited )ase o Ru66e+&o+ld Ru66e+&o+ld !Phils.$, In). v. N4RC, the Cou+t noted that aside +o* the given e)etion, the la& is )lea+ )lea+ and *a'es *a'es no distin distin)ti )tion on as to the )lai*s )lai*s that a+e susended susended on)e a *anage*ent *anage*ent )o**ittee is )+eated )+eated o+ a +eha6ilitat +eha6ilitation ion +e)eive+ is aointed. /in)e the la& *a'es no distin)tion o+ ee*tions, neithe+ neithe+ should this this Cou+t. Cou+t. U6i le non distin distingui guitt ne) nos distin distingue+ gue+e e de6e*os. Philiine Ai+lines, In). v. a*o+a de)la+es that the auto*ati) susen susension sion o an a)tion a)tion o+ )lai*s )lai*s against against a )o+o+ )o+o+ati ation on unde+ unde+ a +eha6ilitation +e)eive+ o+ *anage*ent )o**ittee e*6+a)es all hases o the suit, that is, the enti+e +o)eedings o an a)tion o+ suit and not Fust the a%*ent o )lai*s. The +eason 6ehind the i*e+ative i*e+ative natu+e o a susension susension o+ sta% o+de+ in +elation to the )+edito+s? )lai*s )annot 6e do&nla%ed, o+ indeed the indis)+i*inate susension o a)tions o+ )lai*s intends to eedite the +eha6ilita +eha6ilitation tion o the dist+essed )o+o+ation )o+o+ation 6% ena6ling ena6ling the *anage*ent )o**ittee )o**ittee o+ the +eha6ilitat +eha6ilitation ion +e)eive+ +e)eive+ to ee)tivel ee)tivel% % ee+)ise ee+)ise itsKhis itsKhis o&e+s +ee +o* an% Fudi)ial o+ et+aFudi)ial inte+e+en)e that *ight undul% hinde+ o+ +event the +es)ue o the de6to+ )o*an%. To allo& su)h othe+ a)tions to )ontinue &ould onl% add to the 6u+den o the *anage*ent )o**ittee )o**ittee o+ +eha6ilitat +eha6ilitation ion +e)eive+, +e)eive+, &hose ti*e, eo+t and +esou+)es +esou+)es &ould 6e &asted &asted in deending )lai*s against the )o+o+ation, )o+o+ation, instead o 6eing di+e)ted to&a+d its +est+u)tu+ing and +eha6ilitation. At this Fun)tu+e, it *ust 6e )on)ede d that the date &hen the )lai* a+ose, o+ &hen the a)tion &as iled, has no 6ea+ing at all in de)iding &hethe+ the given a)tion o+ )lai* is )ove+ed 6% the sta% o+ susension o+de+ o+de+..
175 Corporation Law 2016: JVL & JSD
4a6o+ A+6ite+ thei+ *otion to susend +o)eedings in the illegal dis*issal )ase. This, )onside+ing that at the ti*e the la6o+ )ase &as iled on August >#, >>, >>, +esond +esondent ent )o+o+ )o+o+ati ation on &as unde+goi unde+going ng +o)eed +o)eeding ings s o+ +eha6ilitat +eha6ilitation ion and &as late+ on de)la+ed to 6e in a state o susension o a%*ents. 5 Pa)ii) H The Inte+i* Rules o P+o)edu+e P+o)edu+e on Co+o+ate Co+o+ate Reha6ilitation Reha6ilitation is silent silent on the eno+)e*ent eno+)e*ent o )lai*s se)ii)all% se)ii)all% against the +oe+ties +oe+ties o a))o**odation *o+tgago+s. It onl% )ove+s the susension, du+ing the enden)% o the +eha6ilitation, o the eno+)e*ent o all )lai*s against the de6to+, its gua+anto+s and su+eties n ot solida+il% lia6le &ith the *o+tgago+. 2u+the 2u+the+*o +*o+e, +e, the ne&l% ne&l% adoted adoted Rules Rules o P+o)ed P+o)edu+e u+e on Co+o+a Co+o+ate te Reha6ilitation has a se)ii) +ovision o+ this se)ial a++ange*ent a*ong a de6to+, its )+edito+ and its a))o**odation *o+tgago+. /e)tion 7 !6$,
Rule @ o the said Rules eli)itl% allo&s the o+e)losu+e 6% a )+edito+ o a +oe+t% not 6elonging to a de6to+ unde+ )o+o+ate +eha6ilitation, as it +ovidesE /0C. 7. /ta% O+de+. . . . !6$ sta%ing eno+)e*ent o all )lai*s, &hethe+ o+ *one% o+ othe+&ise and &hethe+ su)h eno+)e*ent is 6% )ou+t a)tion o+ othe+&ise, against the de6to+, its gua+anto+s and e+sons not solida+il% lia6le &ith the de6to+ +ovided, that the sta% o+de+ shall not )ove+ )lai*s against lette+s o )+edit and si*ila+ se)u+it% a++ange*ents issued 6% a thi+d a+t% to se)u+e the a%*ent o the de6to+?s o6ligations o6ligations +ovided, +ovided, u+the+, u+the+, that the sta% o+de+ shall not )ove+ o+e)losu+e o+e)losu+e 6% a )+ed )+edit ito+ o+ o +oe +oe+t +t% % not not 6elong 6elongin ing g to a de6to de6to++ unde+ unde+ )o+ )o+o+ o+at ate e +eha6ilita +eha6ilitation tion +ovided, ho&eve+, ho&eve+, that &he+e the o&ne+ o su)h +oe+t% sought to 6e o+e)losed is also a gua+anto+ o+ one &ho is not solida+il% lia6le, said o&ne+ shall 6e entitled to the 6eneit o e)ussion as su)h gua+anto+.
176 Corporation Law 2016: JVL & JSD
