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PROMINENT lawyer has asked the House of Representatives
for the immediate passage of a bill that may help in
arresting alleged malpractices in the rehabilitation of
financially distressed companies.
Lawyer Marcial Balgos, a member of the
Supreme Court committee that drafted the Interim Rules
of Procedure on Corporate Rehabilitation, wrote a letter
to Nacionalista Party Rep. Carlos Padilla of Nueva
Viscaya asking him to help push for the passage of House
Bill 3542, or “An Act Providing for the Rehabilitation
of Distressed Corporations, Amending for the Purpose
Presidential Decree 902-A, as amended,” may help in
arresting the alleged malpractices as in the case of the
Steel Corporation of the Philippines (SCP).
The bill was principally authored by the
Deputy Speaker for
Luzon, Kabalikat ng Malayang Pilipino Rep. Amelita Villarosa of
Oriental Mindoro.
Padilla earlier delivered a privileged
speech exposing the alleged conspiracy on the takeover
of SCP.
“I read with interest your published
statements relative to problems encountered in corporate
rehabilitation cases....I agree that there is a need for
a comprehensive law on the matter adopted,” Balgos, a
senior partner of Balgos and Perez Law Firm, said in his
letter to Padilla.
Balgos noted that “the paucity of the
provisions on the matter in Presidential Decree 902-A
limited the ambit of the intentions of the SC committee
when it drafted the interim rules that are now subject
to abuse in rehabilitation cases.
Balgos said PD 902-A, which was issued
by the late President Ferdinand Marcos, did not contain
any provision on corporate rehabilitation, prompting the
chief executive to issue PD 5063 that introduced
corporate rehabilitation of domestic corporations.
In a memorandum to Villarosa dated
February 12, Balgos commended the legislator for her
bill, “which has long been overdue since the interim
rules have been subject to abuse in rehabilitation
cases.”
Balgos said the interim rules were
drafted by the SC committee since there had been no
rules to govern corporate rehabilitation as implemented
by the courts.
The committee was headed by now Chief
Justice Reynato Puno and now retired Justice Jose Vitug
as cochairmen. Besides Balgos, the other members were
Daisy Arce de Asis, Francis Ed Lim and Florencio
Orendain.
“PD 902-A, as implemented by the interim
rules, proved inadequate simply because procedural law
cannot go beyond what the substantive law provides. The
substantive law being only two brief sections of PD
902-A as amended, of necessity, the interim rules
suffered from the same paucity of PD 902-A as amended,”
Balgos said in his memorandum.
Balgos deplored that one of the most
affected industries in the country as far as
rehabilitation cases are concerned is the Philippine
steel industry, wherein several corporations are
undergoing rehabilitation, either initiated by the
companies themselves or by their creditor-banks.
“It is with respect to petitions
initiated by creditors that had become problematic
because rather than having the financially distressed
steel corporations removed and for them to be restored
to their formal position of financial stability and
profitability, takeover of business for which they have
no expertise to undertake has become the object of these
creditors,” Balgos said.
“Second, in their desire to have their
chances for takeover insured, the initiating creditor
usually connives with members of the judiciary and the
duly-appointed receivers,” he added.
Balgos emphasized that all the
foregoing, must be of necessity, provoke the
introduction of an adequate legislation on corporate
rehabilitation. |
