Facts:

• The case involves Metropolitan Bank & Trust Company (petitioner) against ASB Holdings, Inc. and the ASB Group of Companies (respondents).
• The ASB Group, including ASB Realty Corporation and ASB Development Corporation, faced financial difficulties with debts totaling approximately P12.7 billion, secured by real estate mortgages.
• On May 2, 2000, the ASB Group filed a Petition for Rehabilitation with the Securities and Exchange Commission (SEC) due to financial distress from economic factors, including a real estate market glut and peso depreciation.
• The SEC issued a Suspension Order on May 4, 2000, halting all claims against the ASB Group and appointing an interim receiver.
• The ASB Group proposed a Rehabilitation Plan involving a dacion en pago arrangement to settle debts, which the petitioner bank objected to regarding property valuation and interest waivers.
• The SEC approved the Rehabilitation Plan on April 26, 2001, despite the bank's objections.
• The bank filed a Petition for Certiorari with the SEC En Banc, which was denied, leading to an appeal to the Court of Appeals.
• The appellate court upheld the SEC's decision, prompting the bank to file a petition for review on certiorari before the Supreme Court.

Issue:

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Ruling:

• The Supreme Court ruled that the approval of the Rehabilitation Plan did not impair the petitioner's lien over the mortgaged properties.
• The Court found that the Rehabilitation Plan did not compel the petitioner to waive interests, penalties, and other charges.
• The Court held that ...(Unlock)

Ratio:

• The Supreme Court reasoned that the approval of the Rehabilitation Plan and the appointment of a rehabilitation receiver merely suspended actions for claims against the ASB Group, preserving the petitioner's status as a secured creditor.
• The provisions of the loan agreements remained intact, allowing the bank to enforce its lien upon asset liquidation.
• The Court emphasized that the dacion en pago arrangement was not compulso...continue reading