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    Siochi v. BPI

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    Jasmine Leaño
    The CA reversed the RTC's approval of a rehabilitation plan for several corporations owned by the Siochi family that had significant debt. The CA found that the RTC committed several procedural errors in approving the plan, including failing to refer the plan to the court-appointed rehabilitation receiver for evaluation as required. The Supreme Court affirmed the CA's decision, holding that the RTC did not follow the proper procedures for corporate rehabilitation cases established in prior cases. Specifically, the RTC hastily approved the plan in the same order giving due course to the petition and failed to have the receiver evaluate the plan as the rules require. Due to these procedural errors, the Supreme Court denied the petition and upheld the CA's reversal of the RTC's approval of the rehabilitation

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    Siochi v. BPI

    Uploaded by

    Jasmine Leaño
    212 views1 page
    The CA reversed the RTC's approval of a rehabilitation plan for several corporations owned by the Siochi family that had significant debt. The CA found that the RTC committed several procedural errors in approving the plan, including failing to refer the plan to the court-appointed rehabilitation receiver for evaluation as required. The Supreme Court affirmed the CA's decision, holding that the RTC did not follow the proper procedures for corporate rehabilitation cases established in prior cases. Specifically, the RTC hastily approved the plan in the same order giving due course to the petition and failed to have the receiver evaluate the plan as the rules require. Due to these procedural errors, the Supreme Court denied the petition and upheld the CA's reversal of the RTC's approval of the rehabilitation

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    Art III Sec 1

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    The CA reversed the RTC's approval of a rehabilitation plan for several corporations owned by the Siochi family that had significant debt. The CA found that the RTC committed several procedural errors in approving the plan, including failing to refer the plan to the court-appointed rehabilitation receiver for evaluation as required. The Supreme Court affirmed the CA's decision, holding that the RTC did not follow the proper procedures for corporate rehabilitation cases established in prior cases. Specifically, the RTC hastily approved the plan in the same order giving due course to the petition and failed to have the receiver evaluate the plan as the rules require. Due to these procedural errors, the Supreme Court denied the petition and upheld the CA's reversal of the RTC's approval of the rehabilitation

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    212 views1 page

    Siochi v. BPI

    Uploaded by

    Jasmine Leaño
    The CA reversed the RTC's approval of a rehabilitation plan for several corporations owned by the Siochi family that had significant debt. The CA found that the RTC committed several procedural errors in approving the plan, including failing to refer the plan to the court-appointed rehabilitation receiver for evaluation as required. The Supreme Court affirmed the CA's decision, holding that the RTC did not follow the proper procedures for corporate rehabilitation cases established in prior cases. Specifically, the RTC hastily approved the plan in the same order giving due course to the petition and failed to have the receiver evaluate the plan as the rules require. Due to these procedural errors, the Supreme Court denied the petition and upheld the CA's reversal of the RTC's approval of the rehabilitation

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    of 1

    LEAO, JASMINE

    Article III. Section 1. Procedural Due Process. Judicial Proceedings. Aspects of the Proceedings
    Siochi v. BPI GR 193872 [2011]
    FACTS: Petitioners Siochi Fishery Enterprises, Inc., Jun-Jun Fishing Corporation, Dede Fishing
    Corporation, Blue Crest Aqua-Farms, Inc. and Iloilo Property Ventures, Inc. are engaged in different
    businesses and have interlocking stockholders. The Siochi family owns all these business ventures.
    Petitioners borrowed from BPI and from Ayala Life Assurance, Inc. And as of 30 June 2004, petitioners
    total obligation amounted to P85,362,262.05. On July 15, petitioners filed with the RTC a petition for
    corporate rehabilitation. On the other hand, BPI filed their comment stating that the RTC had no
    jurisdiction and submitting that said rehabilitation plan was unfeasible and prejudicial to BPI. The RTC
    appointed a rehabilitation receiver and approved the petitioners rehabilitation plan, finding the plan was
    feasible and viable. Atty. Cesar Cruz was appointed as the rehabilitation receiver and he prayed that the
    RTC issue an order directing petitioners and their creditors to attend a meeting. However, the RTC denied
    this motion.
    The CA reversed the RTCs ruling stating that the proceeding was rife with procedural infirmities. The CA
    ruled that the trial court failed to refer the corporations petition for rehabilitation and Rehabilitation Plan to
    the receiver despite the explicit and clear mandate of the Interim Rules of Procedure that if the court is
    satisfied that there is merit in the petition, it shall give due course to the petition and immediately refer the
    same and its annexes to the rehabilitation receiver. Furthermore, they stated that the RTC also made a
    procedural shortcut as the finding that there was merit in the petition for rehabilitation was also included in
    the decision approving the same rehabilitation plan.
    In addition, the CA stated that the companies do not also even qualify as financially distressed as there
    were no demands for enforcement of claims. In cases where the creditors oppose the approval of the
    rehabilitation plan, the court may only approve the same upon the concurrence of two conditions; one, that
    the rehabilitation of the debtor is feasible and two, that the opposition of the creditors is manifestly
    unreasonable. However, it can be evidently observed that the companies were in dire financial conditions
    and the rehabilitation plan was unfeasible and impracticable. The proposed rehabilitation plan seemed to
    only suggest extension of loan repayment term and does not ensure actual loan repayment nor business
    recovery of petitioner corporations.
    ISSUE: W/N the CA erred in setting aside the RTCs decision due to negligence of procedural formalities.
    NO
    HELD: The Court held that while it is true that the Rules of Procedure shall be liberally construed, this
    does not mean that the courts may disregard the rules. In the case of New Frontier Sugar Corporation v.
    RTC, the Court laid down the basic procedure in corporate rehabilitation cases. The procedure is as follows:
    (1) the petition is filed with the appropriate RTC; (2) If found sufficient, the court shall issue a Stay Order,
    which shall provide for the appointment of a Rehabilitation Receiver; the fixing of the initial hearing on the
    petition; a directive to the petitioner to publish the Order in a newspaper of general circulation once a week
    for (2) consecutive weeks; and a directive to all interested parties to file and serve on the debtor a verified
    comment on or opposition to the petition, with supporting affidavits and documents; (3) Publication of the
    Stay Order; (4) Initial hearing on any comment or opposition; (5) Referral for evaluation of the
    rehabilitation plan to the receiver; (6) Modifications or revisions of the rehabilitation plan; (7) Submission
    of final rehabilitation plan and; (8) approval or dismissal of rehabilitation plan.
    From the foregoing, it is evident that CA is correct in ruling that the RTC hastily approved the plan in the
    same order giving due course to the petition. The RTC also failed to refer for evaluation the rehabilitation
    plan to the receiver. Therefore, the rehabilitation receiver was unable to submit his recommendations and
    make modifications or revisions to the rehabilitation plan as necessary. To add to this, the RTC denied the
    rehabilitation receivers motion to issue an order directing petitioners and their creditors to attend a
    meeting. Due to the following procedural infirmities, the Court denied the petition and affirmed the CAs
    decision.

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