G.R. No. 229490 - La Filipina Uy Gongco Corporation and Philippine Foremost Milling Corporation vs. Harbour Centre Port Terminal, Inc.

Petitioner Metropolitan Bank and Trust Company (MBTC) is a domestic banking corporation that extended credit accommodations and loan facilities to respondent Fortuna Paper Mill and Packaging Corporation (Fortuna).
Fortuna was engaged in manufacturing special and craft papers principally sold to manufacturers of corrugated boxes, cement paper bags, and other stationery products.
Fortuna defaulted on obligations to MBTC amounting to approximately Php 259,981,915.33, secured by mortgages on properties owned by Fortuna and its sister companies.

Facing financial difficulties, labor problems, and prior disconnection of its electrical supply by Manila Electric Company (Meralco) on account of unpaid bills and a pilferage complaint, Fortuna ceased operations in 2006.
Instead of paying overdue debts, Fortuna filed a Petition for Corporate Rehabilitation with the Regional Trial Court (RTC) of Malabon, Branch 74, on June 21, 2007.
Fortuna’s Rehabilitation Plan proposed:

Program I – Resumption and continuation of business operations supported by the entry of a supposed investor, Polycity Enterprises Ltd. (Hong Kong), and a moratorium on debts and reduced interest rates.
Program II – Expansion into real estate business, specifically developing condominium projects on realty assets under the Pag-IBIG City Program.

The RTC found the Rehabilitation Petition compliant with the Interim Rules of Procedure on Corporate Rehabilitation (Rule 4, Sections 1 & 5) and issued a Stay Order.
MBTC opposed the petition, arguing Fortuna was disqualified for rehabilitation as it was already in default and the Rehabilitation Plan lacked material financial commitments and feasibility.
Despite opposition, the RTC approved the Rehabilitation Plan on December 20, 2007, finding it feasible and viable, noting the debt moratorium and potential income from real estate development.
MBTC appealed to the Court of Appeals (CA), which affirmed the RTC’s approval, dismissing MBTC’s petition. MBTC’s Motion for Reconsideration was denied.

MBTC later informed the Supreme Court that the rehabilitation proceedings were terminated by the RTC by order dated November 21, 2011, which was affirmed by the CA on August 30, 2013.
Fortuna’s motion for reconsideration was withdrawn, and the CA granted the withdrawal, rendering the rehabilitation proceedings terminated and the instant petition moot and academic.

Whether a corporation already in default or debt, like Fortuna, is qualified to file a petition for corporate rehabilitation under Rule 4, Section 1 of the Interim Rules.
Whether the Rehabilitation Plan of Fortuna complied with the minimum requirements under Rule 4, Section 5 of the Interim Rules, particularly the inclusion of material financial commitments and a proper liquidation analysis.
Whether the Rehabilitation Plan was economically feasible and viable to warrant its approval.