Facts:

The case revolves around Bank of the Philippine Islands (BPI) as the petitioner against the Court of Appeals and TF KO Development Corporation (TF KO) as respondents. The legal matter was elevated to the Supreme Court of the Philippines under G.R. No. 170625, with the decision rendered on October 17, 2008. TF KO, a domestic corporation engaged in agricultural commerce and subdivision development, filed a petition on November 10, 2003, before the Regional Trial Court (RTC) of General Santos City for a declaration of suspension of payments and approval of a proposed rehabilitation plan. The case was registered as Corporate Case No. 26 and assigned to Branch 23 of the RTC.

TF KO had incurred substantial debts from various banks, amounting to P34,680,298.40 owed to BPI, P32,000,000.00 to the Land Bank of the Philippines (LBP), and P3,500,000.00 to Metropolitan Bank & Trust Co. (Metrobank). At the time of filing, both BPI and LBP had initiated foreclosure proceedings on TF KO'

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Facts:

Background and Initiation of the Case

• TF KO Development Corporation, a domestic corporation engaged primarily in agricultural commerce and subdivision development, filed a petition for declaration of suspension of payments with an accompanying rehabilitation plan.
• The petition was filed on November 10, 2003, before the Regional Trial Court (RTC) of General Santos City, docketed as Corporate Case No. 26.
• To support its rehabilitation efforts, TF KO sought relief from its outstanding loans with several creditor banks, including the Bank of the Philippine Islands (BPI), Land Bank of the Philippines (LBP), and Metropolitan Bank & Trust Co. (Metrobank).

Pre-Petition Developments and Creditors’ Positions

• At the time of filing, TF KO’s outstanding obligations were approximately:
• P32,000,000 with LBP;
• P34,680,298.40 with BPI (inclusive of interest as of February 2002);
• P3,500,000 with Metrobank.
• Both LBP and BPI had already initiated foreclosure proceedings on properties mortgaged as security against the loans.

Granting of Temporary Relief and Receiver Appointment

• Finding that the petition was sufficient in form and substance, the RTC issued a Stay Order on November 14, 2003, which halted the enforcement of claims against TF KO.
• The RTC scheduled the initial hearing for January 6, 2004, and appointed Pedro N. Suson as the rehabilitation receiver.
• The rehabilitation receiver duly accepted his assignment, posted the required bond, and took his oath of office.

RTC Orders, Comments, and Early Proceedings

• On January 7, 2004, the RTC issued an order enjoining creditor LBP and the local sheriff from further foreclosure on the real estate mortgages and directed all creditor banks to file their oppositions.
• On the same day, BPI (acting in its role as a creditor) filed a Verified Comment, objecting to the petition and the proposed rehabilitation plan on several grounds, including alleged defects in form and substance.
• Similar oppositions were filed by LBP and Metrobank, with Metrobank’s obligation later addressed through a motion for relief in which TF KO’s president, Mrs. Flora G. Ko, promised to personally settle the debt owed to Metrobank.

Submission of a Proposed Final Mode of Payment and Subsequent RTC Developments

• On March 22, 2004, the rehabilitation receiver submitted a proposed Final Mode of Payment addressing how TF KO would settle its obligations with the creditor banks.
• The proposed mode of payment detailed schedules for discharging the obligations of BPI and LBP through semiannual equal installments over eight periods and provided that Metrobank’s claim be discharged, with its obligation to be settled personally by Mrs. Ko.
• Both creditor banks objected to aspects of the proposed mode of payment, with BPI also arguing that the petition was outside the jurisdiction of Section 1, Rule 4 of the Interim Rules on Corporate Rehabilitation.

RTC Decision Approving the Rehabilitation Plan

• On January 24, 2005, the RTC rendered a decision approving the rehabilitation plan.
• The decision set forth detailed schedules for payment to BPI and LBP and directed:
• That TF KO pursue its housing development project to service its debts;
• The discharge of Metrobank’s claim subject to personal settlement by Mrs. Flora Ko;
• The prohibition on declaration and payment of dividends until full settlement of the loans;
• The commencement of the rehabilitation program and the discharge of the rehabilitation receiver from further duty, and termination of the Stay Order.

Filing of the Petition for Review and Subsequent Developments

• BPI, having received a copy of the RTC decision on January 26, 2005, secured an extension from the RTC and later filed its petition for review on February 28, 2005.
• The petition for review challenged both the RTC’s decision approving the rehabilitation and the subsequent resolutions of the Court of Appeals dismissing BPI’s review petition.
• The Court of Appeals, on July 29, 2005, issued a resolution dismissing the petition for review on several alleged procedural grounds, such as defects in the verification and certification, late filing, incomplete document submissions, and non-payment of docket fees regarding the temporary restraining order application.
• A motion for reconsideration was subsequently filed by BPI, but it was again denied on November 22, 2005.
• BPI contended that:
• The computed deadline for the petition for review factored in a national holiday (as provided under Proclamation No. 785), thus rendering the filing timely.
• The motion for reconsideration was filed on time via registered mail, with the postal stamp evidencing its timeliness.
• The procedural lapses were either minor or remedied by subsequent submissions, and the real issues should be decided on the merits.

Issue:

Timeliness and Procedural Compliance

• Whether the petition for review was timely filed, given that the last day of filing fell on a national holiday and the statutory extension rules applied.
• Whether the motion for reconsideration, duly filed via registered mail with the postal marking indicating its timely deposit, complied with the necessary procedural requirements.

Sufficiency and Effect of Alleged Procedural Defects

• Whether the alleged procedural errors—such as the missing date of issue on the IBP certification, the failure to attach certain supporting documents, and the deficiency in the certification against forum shopping—warranted a dismissal of the petition for review.
• Whether the remedial submissions made subsequent to the initial filing (e.g., the submission of the board resolution and special power of attorney, and the later attachment of supporting documents) should be considered sufficient to cure the formal lapses.

Validity of the RTC Decision on Rehabilitation

• Whether the RTC’s approval of the rehabilitation plan was legally sound, considering:
• The claim that TF KO’s obligations had matured before the filing of the petition for rehabilitation;
• The alleged lack of factual and legal bases for the rehabilitation plan;
• The contention that the petition for rehabilitation was tainted by forum shopping due to concurrent litigation.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)