Case Digest (G.R. No. 162196)
Facts:
San Jose Timber Corporation and Casilayan Softwood Development Corporation v. Securities and Exchange Commission, Tierra Factor Corporation and Other Creditors of San Jose Timber Corporation and Casilayan Softwood Development Corporation, G.R. No. 162196, February 27, 2012, Supreme Court Third Division, Mendoza, J., writing for the Court.Petitioner Casilayan Softwood Development Corporation (CSDC) was the controlling stockholder and creditor of petitioner San Jose Timber Corporation (SJTC), which held a Timber License Agreement (TLA No. 118) with the DENR and operated a logging concession in Wright, Western Samar. On February 8, 1989 the DENR issued a Moratorium Order suspending logging in Samar, prompting SJTC to cease operations and lose its income stream.
On August 7, 1990 SJTC and CSDC filed with the Securities and Exchange Commission (SEC) a petition for appointment of a rehabilitation receiver and suspension of payments (SEC Case No. 3843). The SEC Hearing Panel, by Order dated March 14, 1991, appointed a rehabilitation receiver and suspended payments subject to SJTC resuscitating operations and servicing liabilities per an approved schedule within one year. After repeated requests, the petitioners sought extensions of the waiting period to permit lifting of the DENR moratorium; the SEC extended the waiting period several times but held approval of the revised plan in abeyance.
Because the moratorium persisted, on March 4, 1996 the petitioners filed a Motion For Settlement of Claims offering creditors either full payment if they awaited rehabilitation or immediate settlement at 30% of substantiated claims. The SEC, by Order dated July 30, 1996, approved the 30% settlement subject to conditions (including funding advances by certain corporate creditors and reservation of rights for objecting creditors). The SEC later allowed sale of certain personal properties with proceeds deposited in escrow (Order, November 26, 1997).
On May 6, 2002 the SEC En Banc motu proprio terminated the rehabilitation proceedings, dismissed the petition for rehabilitation and ordered dissolution of SJTC, finding rehabilitation unduly speculative because it depended on lifting of the logging moratorium. The Court of Appeals (CA) affirmed in a September 22, 2003 decision, and denied a motion for reconsideration (Resolution, January 29, 2004). On March 8, 2004 the petitioners filed a Rule 45 petition for review before this Court.
While the petition was pending before the Court, the DENR issued an Order dated August 15, 2005 recognizing the moratorium as having lapsed and allowing SJTC to pursue its TLA until June 30, 2007 with an ...(Pro-only)
Issues:
- Was the termination of SJTC’s rehabilitation proceedings by the SEC and the affirmance by the Court of Appeals proper under the standards for corporate rehabilitation?
- Does the DENR Order of August 15, 2005 (lifting the logging moratorium and extending the TLA) constitute a supervening event that warrants reversing the CA and SEC decisions and remanding the case to the SEC for further evaluat...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)