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THE
Court of Appeals (CA) has issued a temporary restraining
order (TRO) enjoining a court in Batangas City from
implementing its order allowing creditors of Steel Corp.
of the Philippines (SCP) to acquire ownership and
management control of the company.
In a
three-page resolution, the CA’s Special 10th Division
stopped respondents Judge Maria Cecilia Austria, of
Branch 2 of the Regional Trial Court in Batangas City,
Equitable-PCI Bank and the court-appointed receiver,
lawyer Santiago Gabionza, from constituting a management
committee (Mancom) that will supervise the operations of
SCP.
The
appellate court also ordered the respondents to file
within 10 days their comment to the petition filed by
SCP questioning the lower court’s order approving its
rehabilitation plan.
“Now
therefore you, respondents …are hereby commanded to
desist from pursuing the constitution of a management
committee and required to file within 10 days your
comment to the petition as secondly supplemented and to
show cause why a writ of preliminary injunction should
not issue upon the expiration of the TRO. It is
understood that the TRO issue is focused on, and limited
only, to the issue of the creation of a management
committee,” the CA said in a resolution dated March 4,
2008.
The
resolution was written by Associate Justice Antonio
Bruselas Jr.
Two
others members of the division, Associate Justices
Bienvenido Reyes and Lucas Bersamin concurred with the
ruling.
In its
petition before the CA, SCP assailed the rehabilitation
plan approved by Austria as it allows its creditors led
by Equitable-PCI Bank to acquire ownership of the
company through a mandatory debt-to-equity conversion
and create a management committee to replace its board
of directors.
SCP
accused the judge of approving the rehabilitation plan
filed by Equitable-PCIB beyond the 180-day mandatory
period for such approval provided for by the interim
rules.
The
company claimed that the judge arrived at the decision
by arbitrarily reducing SCP’s equity value to be used in
the debt-to-equity conversion that she adopted in the
plan without even conducting a hearing to determine
“imminent danger or dissipation, loss, wastage or
paralization of business operations” which are the legal
grounds required by law before appointing a Mancom.
It noted
that
Austria
ignored the Supreme Court’s ruling in Pryce Corp. v CA,
China Banking Corp, which held that before a management
committee or receiver is appointed, the said
requirements must first exist.
SCP
earlier filed before the CA several cases against
Austria’s orders and decisions, as well as criminal and
administrative cases at the Ombudsman and at the Office
of the Court Administrator for alleged bias and
incompetence in putting SCP under rehabilitation.
The SCP
has also asked Chief Justice Reynato Puno and CA
Presiding Justice Conrado Vasquez Jr. to look into the
allegedly questionable proceedings that transpired
before Austria’s sala and at the appellate court
involving its rehabilitation plan.
SCP,
through its lawyer Ferdinand Topacio, found it
suspicious that the four cases which were raffled off in
separate occasions would end up with the sala of
Associate Justice Sixto Marella of the CA’s Sixteenth
Division. |
