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THE Steel Corporation of the Philippines (SCP) has asked the Court
of Appeals (CA) to reconsider its earlier decision ordering the
termination of the proceedings in the Batangas City Regional Trial
Court for the rehabilitation of SCP.
In a 43-page motion for reconsideration, the SCP
asked the CA’s Twelfth Division to recall its July 3, 2008, ruling because
it has no authority to order the termination of the rehabilitation
proceedings pending in the lower court.
Besides a reversal of the CA ruling, the SCP
also called for the consolidation of the suit initiated by the Banco
de Oro-Equitable PCI Bank with the separate petition for review
filed by steel company, which is pending before the CA’s Eleventh
Division that has already issued a temporary restraining order on
June 18, 2008, enjoining the Batangas City RTC, Branch 2, from
implementing its order for rehabilitation of SCP.
While conceding that the CA has the power to
review the December 3, 2007, decision of the Batangas City RTC,
Branch 2, the SCP stressed that the exercise of that power with
respect to whether or not the rehabilitation proceedings should be
terminated is still premature at this time.
The steel firm noted that the appellate court
cannot order the termination of the rehabilitation proceedings
because the “RTC has not yet made a finding that the
rehabilitation plan may no longer be implemented in accordance with
its terms, conditions, restrictions, or assumptions.”
Citing Section 1 of Rule 2 of the Interim Rules,
the SCP insisted that” it is the RTC, not the Court of Appeals,
who has authority to determine whether the rehabilitation plan may
no longer be implemented in accordance with its terms, conditions,
restrictions, or assumptions and, correspondingly, to terminate the
rehabilitation proceedings.”
In ordering the termination of the
proceedings for the rehabilitation of the debt-ridden SCP on July 3,
the CA cited Section 27, Rule 4 of the Interim Rules of
Procedure on Corporate Rehabilitation, which provides the mechanism
for the termination of the proceedings for rehabilitation of a
distressed company.
The CA said the rehabilitation plan adopted by
Judge Maria Cecilia I. Austria, presiding judge of Batangas City RTC,
Branch 2, may no longer be implemented in accordance with the terms,
conditions and assumptions set forth in the approved rehabilitation
plan considering the heavy debt burden and business financial status
of SCP.
-- William B. Depasupil
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