545 Phil. 604
SANDOVAL-GUTIERREZ, J.:
On May 4, 2000, the Hearing Panel of the SEC Securities Investigation and Clearing Department, finding the petition for rehabilitation sufficient in form and substance, issued a sixty-day Suspension Order (a) suspending all actions for claims against the ASB Group of Companies pending or still to be filed with any court, office, board, body, or tribunal; (b) enjoining the ASB Group of Companies from disposing of their properties in any manner, except in the ordinary course of business, and from paying their liabilities outstanding as of the date of the filing of the petition; and (c) appointing Atty. Monico V. Jacob as interim receiver of the ASB Group of Companies.
- The total assets of petitioner ASB Group of Companies, together with petitioner ASB Allied Companies, amount to Nineteen Billion Four Hundred Ten Million Pesos (P19,410,000,000.00).
- The Projects were financed with loans or borrowings from bank and individual creditors which resulted in petitioner Group of Companies having a total liability in the amount of Twelve Billion Seven Hundred Million Pesos (P12,700,000,000.00).
- On account of the sudden non-renewal and/or the massive withdrawal by creditors of their loans to petitioner ASB Holdings, Inc., coupled with the recent developments in the country, like, among others, (i) the glut in the real estate market; (ii) the severe drop in the sale of real properties; (iii) the depreciation of the peso vis-a-vis the dollar; and (iv) the decreased investor confidence in the economy, petitioner Group of Companies was unable to complete and sell some of its projects on schedule and, hence, was unable to service its obligations as they fell due.
- Petitioner Group of Companies possesses sufficient property to cover its obligations. However, petitioner Group of Companies foresees its inability to pay its obligations within a period of one (1) year.
- Because of the inability of the Group of Companies to pay its obligations as they respectively fall due, its secured and non-secured creditors pressed for payments of due and maturing obligations and threatened to initiate separate actions against it, which will adversely affect its operations and shatter its hope in rehabilitating itself for the benefit of its investors and creditors and the general public.
- There is a clear, present and imminent danger that the creditors of petitioner Group of Companies will institute extrajudicial and judicial foreclosure proceedings and file court actions unless restrained by this Honorable Commission.
- The institution of extrajudicial and judicial foreclosure proceedings and the filing of court actions against petitioner Group of Companies will necessarily result in the paralization of its business operation and its assets being lost, dissipated or wasted.
- There is, therefore, a need for the suspension of payment of all claims against petitioner Group of Companies, in the separate and combined capacities of its member companies, while it is working for its rehabilitation.
- Petitioner Group of Companies has at least seven hundred twelve (712) creditors, three hundred seventeen (317) contractors/suppliers and four hundred ninety-two (492) condominium unit buyers, who will certainly be prejudiced by the disruption of the operations of petitioner ASB Group of Companies which seeks to protect the interest of the parties from any precipitate action of any person who may only have his individual interest in mind.
- The business of petitioner ASB Group of Companies is feasible and profitable. Petitioner Group of Companies will eventually be able to pay all its obligations given some changes in its management, organization, policies, strategies, operations, or finances.
- With the support of this Honorable Commission, petitioner Group of Companies is confident that it will be able to embark on a sound and viable rehabilitation plan, with a built-in debt repayment schedule through the optimal use of their present facilities, assets and resources. Although a proposed rehabilitation plan is attached to this petition, a detailed and comprehensive rehabilitation proposal will be presented for the approval of this Honorable Commission, with the foregoing salient features:
- Servicing and eventual full repayment of all debts and liabilities, focusing on debt restructure and possible liquidation through dacion en pago, transfer and assignment, or outright sale of assets, in order to lighten the debt burden of petitioner Group of Companies;
- Forming of strategic alliances with third party investors, including joint ventures and similar arrangements;
- Contributing specified properties from petitioner ASB Allied Companies;
- Streamlining the operations of petitioner ASB Group of Companies, and the effective management of its revenues and funds towards the strengthening of its financial and business positions; and
- Stabilizing the operations of petitioner Group of Companies, and preparing it to take advantage of future opportunities for growth and development.
Metropolitan Bank and Trust Co. | ||
Principal Amount | - | Principal (amount) plus any interest due and unpaid as of April 30, 2000, less any prepaid interest, without any penalties and charges. |
Form of Agreement | - | Dacion en Pago Agreement |
Purpose | - | To retire existing loans. |
Tenor | - | Immediate Dacion en Pago of related properties, subject to the approval of the Securities and Exchange Commission (SEC). |
Effective Date | - | September 1, 2000, subject to the approval of the SEC. |
Dacion En Pago Arrangement | - | ASB will dacion the bank's equity in St. Francis Square and apply the excess dacion value on its BSA Twin Tower loan. Further, Makati Hope, Buendia cor. Malugay, 21 Annapolis (which is expected to be released by PNB) and # 28 & 23 Eisenhower St., will be dacioned to Metrobank, the excess of which will also be applied to Metrobank's exposure on BSA Twin Towers. In return, State Condominium will be freed up and placed in the ASB creditors' asset pool. Further, Metrobank shall also undertake the completion of BSA Twin Towers. |
Outstanding Loan Balance After Dacion En Pago | - | None[5] |
PREMISES CONSIDERED, the objections to the rehabilitation plan raised by the creditors are hereby considered unreasonable.On July 10, 2001, petitioner bank filed with the SEC En Banc a Petition for Certiorari,[8] docketed as EB-725, alleging that the SEC Hearing Panel, in approving the Rehabilitation Plan, committed grave abuse of discretion amounting to lack or excess of jurisdiction; and praying for the issuance of a temporary restraining order and/or a writ of preliminary injunction to enjoin its implementation. Subsequently, the ASB Group of Companies filed their Opposition[9] to the petition, to which petitioner bank filed its Reply.[10]
Accordingly, the Rehabilitation Plan submitted by petitioners is hereby APPROVED, except those pertaining to Mr. Roxas' advances, and the ASB-Malayan Towers. Finally, Interim Receiver Mr. Fortunato Cruz is appointed as Rehabilitation Receiver.
SO ORDERED.
WHEREFORE, finding the instant petition not impressed with merit, the same is DENIED DUE COURSE. No pronouncement as to costs.Petitioner bank's Motion for Reconsideration was likewise denied in a Resolution dated December 1, 2004.[14]
SO ORDERED.
In their Comment, respondent corporations comprising the ASB Group of Companies prayed for the dismissal of the instant petition for being unmeritorious.
- In not nullifying the SEC Resolution dated April 15, 2003 approving the Rehabilitation Plan. Such approval illegally compels petitioner bank to accept, through a dacion en pago arrangement, the mortgaged properties based on ASB Group of Companies' transfer values and to release part of the collateral. This forced transfer of properties and diminution of the bank's right to enforce its lien on the mortgaged properties violate its constitutional right against impairment of contracts and right to due process.
- In not finding that the Rehabilitation Plan compels petitioner bank to waive the interests, penalties and other charges that accrued after the SEC issued its Stay Order. Again, this is in violation of the constitutional mandate on non-impairment of contracts and due process.
- In not finding that only respondent ASB Holdings, Inc. suffered financial distress as stated in the Rehabilitation Plan and, as such, the coercive reach of the SEC's Stay Order under P.D. 902-A can extend only to the enforcement of claims against this distressed corporation. It cannot suspend the claims and actions against its affiliate corporations.
IV. THE REVISED REHABILITATION PLANIndeed, based on the above explanation in the Rehabilitation Plan, the dacion en pago program and the intent of respondent ASB Group of Companies to ask creditors to waive the interests, penalties and related charges are not compulsory in nature. They are merely proposals for the creditors to accept. In fact, as explained, there was already an initial discussion on these proposals and the majority of the secured creditors showed their desire to complete dacion en pago transactions, but they must be "based on MUTUALLY AGREED UPON TERMS." The SEC En Banc in its Resolution dated April 15, 2003, affirming the SEC Hearing Panel's Order of April 26, 2001 approving the Rehabilitation Plan, aptly declared:A. The Total Approach
It is apparent that ASB's corporate indebtedness needs to be reduced as quickly as possible in order to prevent rapid deterioration in equity. x x x. In order to reduce debt quickly, we must do the following:
- Complete or sell on-going projects;
- Invite secured creditors to complete dacion en pago transactions, waiving all penalties; and
- Invite unsecured creditors to purchase real estate parcels and other assets and set-off the amount of their outstanding claim against the purchase price.
The assets included in the above program include all real estate assets.
In order to determine the feasibility of the above, representatives of our financial advisors met with or had discussions with most of the secured creditors. Preliminary discussions indicate support from the secured creditors towards the concepts of the program associated with them. The majority of these secured creditors appear to want to complete dacion en pago transactions based on MUTUALLY AGREED UPON TERMS. x x x. We continue to pursue discussions with secured creditors. Based on the program, secured creditors' claims amounting to PhP5.192 billion will be paid in full including interest up to April 30, 2000. Secured creditors have been asked to waive all penalties and other charges. This dacion en pago program is essential to eventually pay all creditors and rehabilitate the ASB Group of Companies. If the dacion en pago herein contemplated does not materialize for failure of the secured creditors to agree thereto, this rehabilitation plan contemplates to settle the obligations (without interest, penalties, and other related charges accruing after the date of the initial suspension order) to secured creditors with mortgaged properties at ASB selling prices for the general interest on the employees, creditors, unit buyers, government, general public and the economy.
x x x.[20] (Underscoring supplied)
x x x, petitioner asserts that the Rehabilitation Plan is not legally feasible because respondents cannot dictate the terms of dacion.With respect to the third assigned error, we note that the same was not raised by petitioner bank in its Comment/Opposition to the Rehabilitation Plan filed with the SEC Hearing Panel. Such belated issue cannot be considered, especially because it involves a question of fact, the resolution of which is normally beyond the authority of this Court as it is not a trier of facts.[22]
We do not agree. A cursory reading of the Rehabilitation Plan debunks this assertion. The Plan provides that dacion en pago transaction will be effected only if the secured creditors, like petitioner, agree thereto and under terms and conditions mutually agreeable to private respondents and the secured creditor concerned. The dacion en pago program is essential to eventually pay all creditors and rehabilitate private respondents. If the dacion en pago does not materialize in case secured creditors refuse to agree thereto, the Rehabilitation Plan contemplates to settle the obligations to secured creditors with mortgaged properties at selling prices. This is for the general interest of the employees, creditors, unit buyers, government, general public, and the economy.[21] (Underscoring supplied)