Case Summary (G.R. No. 193108)
Corporate Rehabilitation Proceedings
On April 7, 2005, Respondent filed a petition for corporate rehabilitation and, on April 12, 2005, the Rehabilitation Court issued a stay order and appointed Marcelo as Rehabilitation Receiver. At filing, Respondent had approximately 34,000 outstanding PEPTrads.
Alternative Rehabilitation Plan Provisions
In April 2006, the Receiver submitted an Alternative Rehabilitation Plan (ARP) that converted planholder benefits into fixed-value entitlements as of December 31, 2004 (“Base Year-end 2004 Entitlement”). Benefits were computed at 50% of average school fees for availing planholders, the higher of Base Year-end entitlement or 50% of average fees for non-availing Group 1 planholders, and contributions plus 7% net interest for non-availing Group 2 planholders. The ARP also provided tuition support advances from the Base Year entitlements, funded by sale or forward contracts on U.S. Dollar-denominated NAPOCOR bonds.
Modified Rehabilitation Plan Provisions
Following substantial appreciation of the Philippine Peso against the U.S. Dollar, the Receiver proposed a Modified Rehabilitation Plan (MRP) in March 2008, approved by the Rehabilitation Court on July 28, 2008. Key modifications included suspension of tuition support, conversion of Peso liabilities to U.S. Dollar liabilities allocated on a pro rata basis, and payment of trust fund assets in U.S. Dollars upon bond maturity.
Court of Appeals Ruling
Petitioner challenged the MRP’s approval before the Court of Appeals, which dismissed her petition on procedural grounds—improper remedy, insufficient fees—and held that modifications were consistent with rehabilitation goals and did not impair contractual obligations.
Procedural Issues on Appeal
Before the Supreme Court, Petitioner argued that the proper mode of appeal was a Petition for Review under Rule 43, that filing and docket fees were paid, that service of the petition for extension was timely, and that her motion for reconsideration tolled the appeal period. Respondent alleged forum shopping and defective verification.
Mode of Appeal under Interim Rules
The Court held that, under the Interim Rules and A.M. No. 04-9-07-SC, all final orders of the Rehabilitation Court are appealable via Rule 43 petitions. The MRP approval was a final order—not interlocutory—because it conclusively determined suspension of tuition support, currency conversion of entitlements, and payment terms.
Docket Fees and Service Compliance
Evidence showed Petitioner paid the required P4,680.00 in fees. The petition for extension was served on August 17, 2010, within the reglementary period; the apparent late stamp was a clerical error. Her timely motion for reconsideration was not pro forma and effectively tolled her appeal period.
Verification and Forum Shopping
Although the verification jurat lacked explicit competent-identity evidence, the Court excused the defect in the interest of justice. The related petition by Parents Enabling Parents Coalition, Inc., did not present identical causes of action, precluding a finding of forum shopping.
Cram-Down Power and Constitutional Basis
Under Section 23, Rule 4 of the Interim Rules and Article III, Section 10 of the 1987 Constitution, the Rehabilitation Court may approve a plan over creditor objections if rehabilitation is feasible and opposition manifestly unreasonable. This “cram-down” power binds all affected creditors upon court approval.
Economic Rationale for Plan Modification
The Philippine Peso’s appreciation from ₱52.02 to ₱40.63 per U.S. Dollar between April 2006 and July 2008 had diluted the value of U.S. Dollar-denominated NAPOCOR bonds securing p
...continue readingCase Syllabus (G.R. No. 193108)
Facts
- Respondent Pacific Plans, Inc. (now Abundance Providers and Entrepreneurs Corporation) sold traditional open-ended educational plans (“PEPTrads”) guaranteeing full tuition and fees at enrolment rates for designated beneficiaries.
- Petitioner Marilyn Victorio-Aquino held two PEPTrads.
- As of April 7, 2005, Pacific Plans faced liabilities to approximately 34,000 planholders and filed for corporate rehabilitation under P.D. No. 902-A and the Interim Rules on corporate rehabilitation.
- On April 12, 2005, the Regional Trial Court issued a stay order, appointed Mamerto A. Marcelo, Jr. as Rehabilitation Receiver, and required creditors to comment on the petition.
Alternative Rehabilitation Plan (ARP)
- On February 16, 2006, the Rehabilitation Receiver proposed an ARP converting planholder benefits into fixed-value entitlements as of December 31, 2004 (“Base Year-end 2004 Entitlement”).
- Computation of entitlements:
• Availing planholders: 50% of SY 2005-2006 average school fees per remaining year.
• Non-availing Group 1: higher of Base Year-end 2004 Entitlement or 50% of SY 2005-2006 average fees.
• Non-availing Group 2: contributions plus 7% per annum net interest from full payment date to December 31, 2004. - Petitioner’s benefits included contributions plus 7% interest until December 31, 2005 (“Net Translated Value”), and 7% annual interest from January 1, 2006 to 2010, plus tuition support through SY 2009-2010.
- Tuition support ceilings applied by availment mode: Annual ₱20,000; Semester ₱10,000; Trimester ₱6,000.
- Funding sources for tuition support: sale of NAPOCOR bonds denominated in USD and forward sale of USD linked notes.
- April 27, 2006: RTC approved the ARP; implementation commenced under Receiver supervision.
Modified Rehabilitation Plan (MRP)
- Peso appreciation from ₱52.02/USD to ₱40.63/USD diluted the USD-denominated trust assets.
- On March 7, 2008, the Rehabilitation Receiver filed for approval of an MRP proposing:
• Suspension of tuition support advances;
• Conversion of peso liabilities to