Case Digest (G.R. No. 205915)
Facts:
Asset Pool A (SPV‑AMC), Inc. v. Clark Development Corporation, G.R. No. 205915, November 10, 2015, Supreme Court First Division, Bersamin, J., writing for the Court.The petitioner, Asset Pool A (SPV‑AMC), Inc. (APA), is the transferee and successor‑in‑interest of United Coconut Planters Bank and Metropolitan Bank and Trust Company, the secured creditors of Mondragon Leisure and Resorts Corporation (MLRC) in connection with the development and operation of the Tourism Estate Phase I (the Mimosa Leisure Estate, MLE). The respondent is Clark Development Corporation (CDC), a government‑owned and controlled corporation that administered the MLE and initiated privatization proceedings.
APA instituted an action for specific performance and damages in the Regional Trial Court (RTC), Branch 62, Angeles City (Civil Case No. 13926), seeking to compel CDC to recognize and include the secured creditors’ claims in the privatization bidding documents for the MLE. CDC opposed. The RTC issued an order on June 24, 2008. APA sought relief in the Court of Appeals (CA) via CA‑G.R. SP No. 104129; the CA dismissed APA’s petition on September 4, 2012, and denied reconsideration on February 7, 2013.
While the appeal to the Supreme Court was pending, CDC reopened privatization by issuing the 2015 Terms of Reference (2015 TOR) with scheduled bid dates in October 2015. APA filed a Very Urgent Motion for Issuance of Temporary Restraining Order/Status Quo Order; the Supreme Court issued a TRO on October 21, 2015 enjoining CDC from implementing the 2015 TOR or otherwise disposing of the MLE. On November 6, 2015, the parties filed an Urgent Joint Motion to Render Judgment Based on a Compromise Agreement and Lift the TRO, attaching a compromise agreement executed November 6, 2015.
The compromise agreement provided, among other things, that upon Supreme Court approval CDC would pay APA PhP277.413 million representing the secured creditors’ 12.5% share in Regency Casino gross gaming revenues up to 30 June 2015; that a PhP765 million payment would be sourced from privatization proceeds and released upon signing of the Lease Agreement with a winning bidder; that APA’s and MLRC’s claims against CDC would be withdrawn/dismissed with prejudice as listed in appended schedules; that APA would assign to CDC deriv...(Subscriber-Only)
Issues:
- May the Supreme Court approve and render judgment based on the parties’ compromise agreement?
- Are the terms of the compromise agreement — including payments, assignment of rights, withdrawals/dismissals and mutual releases — valid and enforceable insofar as they are not contrary to law or public policy?
- Should the temporary restraining order be lifted and the pending appeal dismissed fol...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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