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    North Bulacan Corp v. PBCOM

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    Hyuga Neji
    This case involves North Bulacan Corporation's (NBC) petition for corporate rehabilitation after PBCOM discontinued financial support for NBC's low-cost housing project. The RTC granted NBC's petition and ordered PBCOM to release housing units. However, the CA dismissed the petition because NBC violated several rules of corporate rehabilitation by submitting unverified pleadings and documents not in compliance with the rules. Additionally, over 180 days had passed without an approved rehabilitation plan. The RTC abused its discretion by disregarding the rules in granting NBC's petition based on insufficient evidence. PBCOM won the case.

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    North Bulacan Corp v. PBCOM

    Uploaded by

    Hyuga Neji
    105 views2 pages
    This case involves North Bulacan Corporation's (NBC) petition for corporate rehabilitation after PBCOM discontinued financial support for NBC's low-cost housing project. The RTC granted NBC's petition and ordered PBCOM to release housing units. However, the CA dismissed the petition because NBC violated several rules of corporate rehabilitation by submitting unverified pleadings and documents not in compliance with the rules. Additionally, over 180 days had passed without an approved rehabilitation plan. The RTC abused its discretion by disregarding the rules in granting NBC's petition based on insufficient evidence. PBCOM won the case.

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    This case involves North Bulacan Corporation's (NBC) petition for corporate rehabilitation after PBCOM discontinued financial support for NBC's low-cost housing project. The RTC granted NBC's petition and ordered PBCOM to release housing units. However, the CA dismissed the petition because NBC violated several rules of corporate rehabilitation by submitting unverified pleadings and documents not in compliance with the rules. Additionally, over 180 days had passed without an approved rehabilitation plan. The RTC abused its discretion by disregarding the rules in granting NBC's petition based on insufficient evidence. PBCOM won the case.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    105 views2 pages

    North Bulacan Corp v. PBCOM

    Uploaded by

    Hyuga Neji
    This case involves North Bulacan Corporation's (NBC) petition for corporate rehabilitation after PBCOM discontinued financial support for NBC's low-cost housing project. The RTC granted NBC's petition and ordered PBCOM to release housing units. However, the CA dismissed the petition because NBC violated several rules of corporate rehabilitation by submitting unverified pleadings and documents not in compliance with the rules. Additionally, over 180 days had passed without an approved rehabilitation plan. The RTC abused its discretion by disregarding the rules in granting NBC's petition based on insufficient evidence. PBCOM won the case.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    North Bulacan Corporation v.

    PBCOM
    • NBC’s business: development of low and medium-cost housing.
    • Parent Co. Centro Ville entered into a joint venture agreement with First Sarmiento Holdings for the
    development of low and medium-cost housing projects.
    • JVA was later amended, Centro Ville was substituted by NBC.
    • Initially, Land Bank offered P100M for the construction. But NBC accepted PBCOM’s offer to finance
    the project.
    • Later, PBCOM discontinued its financial support because of a cease-and—desist order by the BSP
    against the bank. This prompted NBC to seek help from Cocolife and Land Bank but they refused to
    provide financial assistance.
    • NBC filed a Petition for CorpRehab with the RTC-Mandaluyong. On 17 Jul 2007, these NBC Motions
    were granted:
    1. Order PBCom to release 12 TCTs of finished housing units
    2. Order Pag-IBIG to issue Letters of Guaranty to PBCom representing the take-out value of the
    finished units
    3. Allow NBC to use the proceeds to make emergency repairs and restoration works
    • Judge Villarante retired. Judge Sorongon took over and on 24 jan 2008, issued an order giving due
    course to NBC’s petition.
    • PBCom filed a petition for certiorari before the CA to challenge the RTC order
    - Ground: Since the RTC was unable to approve a rehabilitation plan for NBC after 180 days from
    the date of the initial hearing in the case, it should have dismissed the petition for rehabilitation
    - CA granted, Petition for CorpRehab dismissed.
    • ISSUE: WoN CA erred in dismissing NBC’s action for corporate rehabilitation. (NO)
    • The Interim Rules of Procedure on Corporate Rehabilitation was enacted to provide a remedy for
    summary and non-adversarial rehabilitation proceedings of distressed but viable corporations.
    • These rules are to be construed liberally to obtain for the parties a just, expeditious, and
    inexpensive disposition of the case. The parties may not, however, invoke such liberality if it will
    result in the utter disregard of the rules or cause needless delay in the administration of justice.
    - Here, NBC violated several rules on corporate rehabilitation: (1) Filing of prohibited pleadings;
    (2) Filing of unverified pleadings; (3) Submission of docs that did not comply with the rules
    • Alsonder the Rehabilitation Rules, if upon the lapse of 180 days from the date of the initial hearing
    there is still no approved rehabilitation plan, the Regional Trial Court (RTC) must dismiss the
    petition.
    - Here, the RTC proceeded beyond the 180-day period even in the absence of a motion to extend
    the same and despite the lack of strong and compelling evidence which showed that NBC’s
    continued operation was still economically feasible.
    - Also, NBC misrepresented debts. Total NBC debts ballooned to P560M.
    • The RTC gravely abused its discretion when it utterly disregarded the Rules on Corporate Rehabilitation
    in the guise of liberal construction and granted the petition for rehabilitation based on insufficient
    evidence.
    • When petitioning corporation declines to comply with the simple rules of rehabilitation, when the
    documentation of its assets are inadequate, and when the creditors’ opposition offered
    insurmountable basis for shelving the entire effort, the Petition for CorpRehab need not be referred to
    a receiver for study and evaluation.
    • PBCOM Won.

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