Facts:

In the case of Banco De Oro Unibank, Inc. vs. International Copra Export Corporation and others (G.R. Nos. 218485-86 and 218493-97, April 28, 2021), the consolidated petitions for review concern a financial rehabilitation process initiated by International Copra Export Corporation (Interco), Interco Manufacturing Corporation, ICEC Land Corporation, and Kimmee Realty Corporation, collectively referred to as Interco, alleging their inability to meet debts as they became due due to various economic challenges including a global recession and rising costs. The petition was filed on September 9, 2010, in the Regional Trial Court of Zamboanga City under the provisions of the Financial Rehabilitation and Insolvency Act (FRIA). Following the issuance of a Stay Order on September 13, 2010, which led to the appointment of Atty. Julio Elamparo as rehabilitation receiver, the court proceeded to solicit opinions from creditors regarding a proposed modified rehabilitation plan. Notably, sever

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Facts:

Filing of the Petition and Initial Proceedings

• On September 9, 2010, International Copra Export Corporation (Interco), Interco Manufacturing Corporation, ICEC Land Corporation, and Kimmee Realty Corporation (collectively “Interco, et al.”) filed a Petition for Suspension of Payments and Rehabilitation before the Regional Trial Court of Zamboanga City.
• The filing was pursuant to the Financial Rehabilitation and Insolvency Act (FRIA) as a response to their anticipated inability to meet debts as they became due, a situation aggravated by regional and global economic recession, increased financial costs, and adverse creditor actions.
• A Supplement to the Petition was submitted on September 27, 2010.

Court’s Initial Determination and Orders

• The Regional Trial Court found the Petition sufficient in form and substance and issued a Stay Order on September 13, 2010.
• The Stay Order scheduled the initial hearing for November 12, 2010 and appointed Atty. Julio Elamparo as the rehabilitation receiver.
• Following the initial hearing, the Court declared that the proceedings would be governed by the 2008 Rules on Corporate Rehabilitation (subject to consistency with FRIA), directing oppositors and claimants to file their respective rejoinders and comments.

Subsequent Filings and Procedural Developments

• Creditor-claimants including Development Bank of the Philippines, Banco De Oro Unibank, Rizal Commercial Banking Corporation, Allied Banking Corporation, Philippine National Bank, and Bank of the Philippine Islands complied with the Court’s initial directions.
• On February 11, 2011, the Regional Trial Court directed the rehabilitation receiver to submit his recommendation within 90 days.
• Atty. Elamparo later sent a letter on March 3, 2011, requesting creditors to submit documents to support their claims and informing them of a general creditor meeting scheduled for April 6, 2011.
• After the creditors’ meeting on April 6, 2011, Atty. Elamparo forwarded his Compliance with Recommendation and a modified rehabilitation plan, asserting the viability of the rehabilitation.
• Various parties, notably Allied Banking and Philippine National Bank, moved to amend the Stay Order and sought clarifications regarding the Petition and ongoing proceedings.

Issuance of Orders Adopting Rules and Remand Decisions

• On May 30, 2011, the Regional Trial Court confirmed its earlier decision to apply the 2008 Rules on Corporate Rehabilitation, provided they were not contrary to FRIA.
• Subsequent comments and oppositions were filed by several creditors; the rehabilitation receiver also requested approval for the disposition of non-core assets, which was granted on October 20, 2011.
• Separate Petitions for Certiorari were filed by Banco De Oro Unibank and Rizal Commercial Banking, challenging the sale of non-core assets.
• On November 18, 2014, the Court of Appeals partially granted these certiorari petitions, remanding the case back to the rehabilitation court with clear instructions to convene the creditors to vote on the rehabilitation plan and to confirm or reject the plan in accordance with Sections 64 and 65 of FRIA.
• Petitions for Review were also filed before the Court of Appeals by several parties, raising multiple issues including alleged forum shopping, misapplication of FRIA and the alleged inaccuracy in the rehabilitation plan.

Allegations and Contentions by the Parties

• Interco, et al. contended that FRIA should not be applicable because its implementing rules were not yet promulgated, and they argued that the rehabilitation receiver acted beyond his authority by relying on the 2008 Rules on Corporate Rehabilitation.
• Banco De Oro, Philippine National Bank, Allied Banking, Rizal Commercial Banking, and Development Bank presented separate arguments alleging procedural lapses, inaccuracies in the Petition for Suspension of Payments and Rehabilitation, and erroneous remand by the Court of Appeals.
• Additionally, issues related to the legitimacy of the group of petitioning debtors (specifically whether Kimmee Realty was financially related to the other petitioning companies) and the proper implementation of the voting requirement under Section 64 of FRIA were raised.

Issue:

Forum Shopping

• Whether Interco, et al. committed forum shopping by filing multiple petitions in different forums involving the same issues and causes of action.
• Whether the filing of several petitions—despite being based on the identical arguments regarding the non-self-executory nature of FRIA and the erroneous remand by the Court of Appeals—constituted an abuse of judicial process by creating potential disruption and conflicting rulings.

Application of FRIA

• Whether the Court of Appeals erred in holding that FRIA is applicable to the Petition for Suspension of Payments and Rehabilitation, notwithstanding the absence of its own implementing rules.
• Whether the rehabilitation court had the discretion to apply the 2008 Rules on Corporate Rehabilitation alongside FRIA and if such dual application satisfied the statutory requirements laid down by FRIA.

Remand of the Case to the Rehabilitation Court

• Whether the Court of Appeals erred in remanding the case to the rehabilitation court for convening the creditors to vote on the rehabilitation plan instead of dismissing the Petition outright for alleged procedural or substantive deficiencies.
• Whether the absence of a properly designated “commencement order” or the failure to duly comply with Section 64 of FRIA (the voting requirement) warrants a different judicial remedy.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)