This case has been cited 2 times or more.
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2012-12-05 |
VILLARAMA, JR., J. |
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| In Rizal Commercial Banking Corporation v. Intermediate Appellate Court,[73] the Court disallowed the foreclosure of the debtor company's property after the latter had filed a Petition for Rehabilitation and Declaration of Suspension of Payments with the SEC. We ruled that whenever a distressed corporation asks the SEC for rehabilitation and suspension of payments, preferred creditors may no longer assert preference but shall stand on equal footing with other creditors. Foreclosure shall be disallowed so as not to prejudice other creditors, or cause discrimination among them. In 1999, the Court qualified this ruling by stating that preferred creditors of distressed corporations shall stand on equal footing with all other creditors only after a rehabilitation receiver or management committee has been appointed.[74] More importantly, the Court laid the guidelines for the treatment of claims against corporations undergoing rehabilitation: 1. All claims against corporations, partnerships, or associations that are pending before any court, tribunal, or board, without distinction as to whether or not a creditor is secured or unsecured, shall be suspended effective upon the appointment of a management committee, rehabilitation receiver, board, or body in accordance with the provisions of Presidential Decree No. 902-A. | |||||
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2007-02-27 |
SANDOVAL-GUTIERREZ, J. |
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| One last word. The purpose of rehabilitation proceedings is to enable the company to gain new lease on life and thereby allows creditors to be paid their claims from its earnings.[25] Rehabilitation contemplates a continuance of corporate life and activities in an effort to restore and reinstate the financially distressed corporation to its former position of successful operation and solvency.[26] This is in consonance with the State's objective to promote a wider and more meaningful equitable distribution of wealth to protect investments and the public.[27] The approval of the Rehabilitation Plan by the SEC Hearing Panel, affirmed by both the SEC En Banc and the Court of Appeals, is precisely in furtherance of the rationale behind P.D. No. 902-A, as amended, which is "to effect a feasible and viable rehabilitation"[28] of ailing corporations which affect the public welfare. | |||||