D.M. CONSUNJI, INC., PETITIONER, VS. ANNABELLE ABAYA, ET AL., ROBERT H. BLOCK AND LANDMARK ENTERTAINMENT GROUP, JARVIS YU CO, SPOUSES RAY J. CONCEPCION AND TERESITA CONCEPCION, …
REYES, JR., A. J.:
The reasons given by the court a quo in dismissing the petition for rehabilitation of URPHI are vividly stated in the Order of December 9, 2005, as follows:
“This is the second time that the court encountered the petitioner on this matter that would have resulted to its rehabilitation. Initially, it filed a petition for rehabilitation of URPHI docketed as SEC CASE No. MCO4-079) but was dismissed by the court in its order dated January 19, 2004.
A scrutiny of the petition, the oppositions thereto, the reply to the oppositions, would show that the petition for rehabilitation of URPHI is a scheme to defraud certain creditors and favoring certain creditors because despite its being in financial distress, URPHI was able to settle its obligation to Export and Industry Bank, Inc. in the amount of P171,000,000.00, inclusive of interest and penalties on January 05, 2004 a few days before it filed the rehabilitation which is suspicious as the Rehabilitation Plan (Annex “H”) of the petition calls for the infusion of P150,000,000.00 to jumpstart its rehabilitation.
Further, the petitioner herein has the same set of officers and stockholders of the company to be rehabilitated. Other Oppositors claimed that the petition for rehabilitation was filed in bad faith for the reason that the attachments submitted to the court are false considering that its payment of its obligation to Export and Industry Bank, Inc. was not alleged thereto.
On the matter of Rehabilitation Receiver’s Report and Recommendation, the court, finds that the receiver filed his recommendation prematurely in that, before he could file his recommendations, the court should have first given due course to the petition and referred it together with the annexes, to the receiver(.) Rule 4, Section 9, second paragraph states, thus:
‘If, after the initial hearing, the court is satisfied that there is merit in the petition, it shall give due course to the petition and immediately refer the petition and its annexes to the Rehabilitation Receiver who shall evaluate the rehabilitation plan and submit his recommendations to the court not later than one hundred twenty (120) days from the date of initial hearing.’
While the court sympathizes with the plight of URPHI’s creditors, it is best for them to confront their situation now when assets of the petitioner are still available, rather than to postpone it at a later date when nothing may be left at all.
That being so, the receiver has no basis in filing his ‘Receiver’s Report and Recommendation’ dated January 06, 2005, be it treated as a consent on, or an evaluation of, the rehabilitation plan. Accordingly, it shall not be given any consideration or application in the present petition.
WHEREFORE, the above-entitled case is hereby ordered DISMISSED.
xxx.” (Rollo, pp. 101-103)
A review of the Order sought to be reversed and set aside, in relation to the petition filed before the court a quo, will show that the lower court did not commit any reversible error and has sufficient basis in dismissing the petition for rehabilitation of URPHI filed by herein petitioner.
First, so many things were alleged in the petition before the lower court to prove that URPHI should be rehabilitated, like a) to ensure that petitioner will be paid by URPHI under a court appointed rehabilitation receiver (par. 5 thereof); b) DMCI (herein petitioner) is aware that the business of URPHI had deteriorated to such an extent that it was no longer able to pay its obligations with respect to the Financial Indebtedness as and when they fell due (Par. 13 thereof); c) (given) the current inability of URPHI to meet its maturing obligations constrained by its cash flow shortfall (par. 14 thereof); d) URPHI has difficulty in paying for its maturing liabilities and debts over the past three years (par. 15 thereof), among others. Yet, URPHI was able to settle its obligation with Export and Industry Bank, Inc., in the amount of P171,000,000.00, inclusive of interest and penalties on 05 January 2004, or, a few days before it filed the rehabilitation petition on 28 January 2004. Thus, it was correct for the lower court to deny the said petition using as justification the said payment to Export and Industry Bank, Inc., – even granting for the sake of argument that all the allegations of the petition for rehabilitation are indeed correct and can be supported by evidence.
Second, the infusion of P150,000,000.00 to jumpstart its rehabilitation as contained in the Rehabilitation Plan (Annex “H”) vis the P171,000,000.00 paid to Export and Industry Bank, Inc., is indeed suspicious considering that the payment to Export and Industry Bank would clearly show that URPHI has enough cash to settle its obligations.
Third, it was likewise alleged in the petition before the lower court that “(t)he analysis of URPHI’s cash flow projections carried out by the financial advisers set out in Annex “E” of the Rehabilitation Plan shows that URPHI is projected to be able to repay the significantly reduced amount of P1,396.85 Million over a period of ten years. A repayment term of this length is not unusual throughout Asia in restructurings of this size and where security is over the operational assets of the company” (par. 21 thereof), but the act of URPHI in paying Export and Industry Bank, Inc., to the tune of P171,000,000.00, definitely runs counter to the said allegation. Again, We agree with the lower court when it said that the petition for rehabilitation is a scheme “favoring certain creditors” – even assuming for the sake of argument that the petition for rehabilitation is not a scheme to defraud certain creditors.
Fourth, the lower took note of the fact that petitioner earlier filed a like petition before the lower court, docketed as SEC Case No. MC04-079, which was dismissed by the court in its order dated 19 January 2004. If this petition is correct, how come URPHI was able to pay Export and Industry Bank, Inc. the amount of P171,000,000.00 on 5 January 2004 or two (2) weeks before the dismissal of said petition (SEC Case No. MC04-079)? The time of payment made to Export and Industry Bank, Inc., the date of the dismissal of the first SEC petition, and the date of filing of the second SEC petition, will definitely prove that the thought of rehabilitating URPHI is indeed a scheme to defraud certain creditors and, with more reason prove that it is a scheme to favor certain creditors. Hence, We agree with the findings of the lower court on this score.
Now that the said payment made by URPHI to Export and Industry Bank, Inc., has been revealed before Us as contained in the instant petition (par. 17, petition; par. 14, Memorandum), said payment is indeed sufficient and enough basis for Us to deny the instant petition. Said payment practically negated all the allegations of the instant petition in relation to the financial standing of URPHI. In any event, had said payment been revealed before the lower court, it would not come to our surprise that said payment will be used by the lower court in dismissing said petition for rehabilitation.
Finally, this Court scrutinized the petition (Annex “B”, Petition) for rehabilitation petitioner filed before the lower court as well as the Annexes of the instant petition. And We found nothing contained in the said petition stating or revealing or showing that URPHI paid Export and Industry Bank, Inc., the amount of P171,000,000.00, inclusive of interest and penalties on 05 January 2004, or, a few days before it filed the petition for rehabilitation on 28 January 2004 (See Annex “B” of instant Petition, re stamped date RECEIVED of petition). While fraud is an intent of the mind, the admission by herein petitioner that the “data contained in the petition as well as in the rehabilitation plan were culled from reports and documents submitted by URPHI to the petitioner, the Securities and Exchange Commission (SEC), the Philippine Stock Exchange and other government and quasi-government agencies” (page 37, 3rd sentence, par. 104, Memorandum of Petitioner) is more than sufficient for this Court to conclude that herein petitioner in not disclosing the payment made to Export and Industry Bank, did not disclose the true financial standing of URPHI. This is definitely an indication of FRAUD. On this point alone, We find nothing wrong in the lower court’s order in dismissing the petition for rehabilitation and in declaring that the petition for rehabilitation of URPHI is a scheme to defraud certain creditors and favoring certain creditors. We find herein petitioner not truthful to its cause.
WHEREFORE, premises considered, the instant petition is hereby DENIED and is accordingly DISMISSED.
SO ORDERED.
Abdulwahid and Perlas-Bernabe, JJ., concur.