Title
Nestle Philippines, Inc. vs. Uniwide Sales, Inc.
Case
G.R. No. 174674
Decision Date
Oct 20, 2010
Nestle and Nestle Waters challenged Uniwide's rehabilitation plan, citing bias and supervening events. The Supreme Court dismissed the petition as premature, deferring to SEC's expertise on feasibility.
rehabilitation plan
termination of proceedings
feasibility
A

Case Digest (G.R. No. 174674)

Facts:

  • Parties and Nature of the Case
    • Petitioners:
      • Nestle Philippines, Inc.
      • Nestle Waters Philippines, Inc. (formerly Hidden Springs & Perrier, Inc.)
    • Respondents:
      • Uniwide Sales, Inc.
      • Uniwide Holdings, Inc.
      • Naic Resources and Development Corporation
      • Uniwide Sales Realty and Resources Club, Inc.
      • First Paragon Corporation
      • Uniwide Sales Warehouse Club, Inc.
    • The case is a petition for review challenging decisions and orders rendered by the Court of Appeals and actions taken by the Securities and Exchange Commission (SEC) regarding a rehabilitation case.
  • Rehabilitation Proceedings Initiation and Developments
    • On 25 June 1999, respondents filed a petition at the SEC for:
      • Declaration of suspension of payment
      • Appointment of a rehabilitation receiver
      • Approval of a rehabilitation plan
      • This petition was docketed as SEC Case No. 06-99-6340, and approved by the SEC on 29 June 1999.
    • Subsequent filings by the Interim Receivership Committee:
      • 18 October 1999: Filed the initial rehabilitation plan anchored on a return to core business operations, debt reduction, loan restructuring, and other measures.
      • 14 February 2000: Filed an Amended Rehabilitation Plan (ARP) to account for the anticipated entry of Casino Guichard Perrachon with P3.57 billion in fresh capital.
      • 11 October 2001: Filed a Second Amendment to the Rehabilitation Plan (SARP) following the withdrawal of Casino Guichard Perrachon, later approved by the SEC on 23 December 2002.
  • Petitioners’ Objections and Subsequent Motions
    • As unsecured creditors, petitioners contested the SARP:
      • They appealed before the SEC for the revocation of the 23 December 2002 Order approving the SARP, seeking improvements in its terms with the consultation of all unsecured creditors.
      • The SEC denied petitioners’ appeal on 13 January 2004 for lack of merit.
    • Petitioners then took the matter to the Court of Appeals:
      • A petition for review was filed, resulting in the 10 January 2006 Decision which denied the petition for review for lack of merit.
      • Petitioners further moved for reconsideration and filed a supplemental motion after receiving a letter on 25 January 2006 regarding the transfer of supermarket operations to Suy Sing Commercial Corporation.
  • Development of Rehabilitation Plan Amendments and Subsequent SEC Orders
    • Progression of rehabilitation measures after petitioners’ review:
      • 11 July 2007: The rehabilitation receiver filed a Third Amendment to the Rehabilitation Plan (TARP).
      • 29 September 2008: A Revised Third Amendment (revised TARP) was submitted after opposition from secured creditors regarding the immediate settlement of unsecured creditors’ obligations through a dacion of part of respondents’ Metro Mall property.
    • SEC Actions Related to Revised TARP:
      • 30 July 2009: The Hearing Panel issued an Order directing the reappraisal of Metro Mall property due to claims of depreciation.
      • 17 September 2009: The Hearing Panel directed respondents to show cause why the rehabilitation case should not be terminated, and sought input from creditors regarding the continuation of the rehabilitation proceedings.
      • 6 November 2009: A motion for reconsideration was filed by respondents but was denied as a prohibited pleading.
      • 13 January 2010: The Hearing Panel disapproved the revised TARP and terminated the rehabilitation case, thus dissolving the stay order.
    • Subsequent Developments Involving SEC En Banc:
      • 22 January 2010: Respondents filed an appeal to challenge the Hearing Panel’s resolution, leading to the docketing of SEC En Banc Case No. 01-10-193.
      • 18 March 2010: The SEC en banc issued an order to preserve the status quo pending the outcome of the appeal.
      • 27 April 2010 and 30 September 2010: Further Orders and consolidation of SEC En Banc cases (No. 12-09-183 and No. 01-10-193) were made, addressing technical and intricate issues regarding the continuation or termination of the rehabilitation proceedings.
  • Petition for Review and Grounds Raised by Petitioners
    • The instant petition for review, filed on 3 November 2006, seeks to determine:
      • Whether the SARP should be revoked due to its alleged infeasibility caused by the transfer of supermarket operations.
      • Whether the rehabilitation proceedings should be terminated under Section 4-26, Rule IV of the SEC Rules of Procedure on Corporate Recovery.
    • Petitioners assert that the terms and conditions of the SARP are:
      • Unreasonable and biased in favor of the respondents.
      • Prejudicial to their interests as unsecured creditors, making the rehabilitation plan impracticable to implement.

Issues:

  • Whether the transfer of the respondents’ supermarket operations to Suy Sing Commercial Corporation has rendered the Second Amendment to the Rehabilitation Plan (SARP) incapable of implementation.
  • Whether the rehabilitation proceedings should be terminated as provided under Section 4-26, Rule IV of the SEC Rules of Procedure on Corporate Recovery.
  • Whether the petition for review should be evaluated on its merits or dismissed as premature due to ongoing SEC administrative proceedings (SEC En Banc Case Nos. 12-09-183 and 01-10-193) addressing the same issues.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)
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