Professional Documents
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4.2. QUALIFICATIONS:
The Commissioners must be natural-born citizens of the
Philippines
at least forty (40) years of age for the Chairperson and
at least thirty-five (35) years of age for the Commissioners,
of good moral character, or unquestionable integrity, of
known probity and patriotism, and
with recognized competence in social and economic
disciplines
Majority of Commissioners, including the Chairperson, shall be
members of the Philippine Bar.
INTRA-CORPORATE CONTROVERSIES
How to determine? Two-tiered test
FIRST TEST: Relationship Test
SECOND TEST: Nature of the Controversy Test
Relationship Test
Case involving:
a. Relationship between Corporation and State;
b. Relationship between Corporation and public in general;
c. Relationship between shareholders, members and officers of the
Corporation;
d. Relationship between and among shareholders and members.
Examining the case before us in relation to these two criteria, the Court finds
and so holds that the case is essentially an intra-corporate dispute. It
obviously arose from the intra-corporate relations between the parties, and
the questions involved pertain to their rights and obligations under the
Corporation Code and matters relating to the regulation of the corporation.
We further hold that the nature of the case as an intra-corporate dispute was
not affected by the subsequent dissolution of the corporation.
It should be noted that the SCCs are still considered courts of general
jurisdiction. Section 5.2 of R.A. No. 8799 directs merely the Supreme
Court's designation of RTC branches that shall exercise jurisdiction
over intra-corporate disputes. Nothing in the language of the law
suggests the diminution of jurisdiction of those RTCs to be designated
as SCCs. The assignment of intra-corporate disputes to SCCs is only
for the purpose of streamlining the workload of the RTCs so that
certain branches thereof like the SCCs can focus only on a particular
subject matter.
iv. GD Express v. CA
G.R. No. 136978, May 8, 2009
Held:The RTC exercising jurisdiction over an intra-corporate dispute
can be likened to an RTC exercising its probate jurisdiction or sitting as
a special agrarian court. The designation of the SCCs as such has not
in any way limited their jurisdiction to hear and decide cases of all
nature, whether civil, criminal or special proceedings.
Issue: Whether the RTC has jurisdiction over the illegal dismissal
case filed against Broadcom Asia, Inc. (Broadcom) and Dante
Arevalo (Arevalo), the President of Broadcom.
Held: It is the LA, and not the regular courts, which has the
original jurisdiction over the subject controversy. An intra-corporate
controversy, which falls within the jurisdiction of regular courts, has
been regarded in its broad sense to pertain to disputes that involve
any of the following relationships: (1) between the corporation,
partnership or association and the public; (2) between the
corporation, partnership or association and the state in so far as its
franchise, permit or license to operate is concerned; (3) between
the corporation, partnership or association and its stockholders,
partners, members or officers; and (4) among the stockholders,
partners or associates, themselves. Settled jurisprudence, however,
qualifies that when the dispute involves a charge of illegal
dismissal, the action may fall under the jurisdiction of the LAs upon
whose jurisdiction, as a rule, falls termination disputes and claims
for damages arising from employer-employee relations as provided
in Article 217 of the Labor Code. Consistent with this jurisprudence,
the mere fact that Cosare was a stockholder and an officer of
Broadcom at the time the subject controversy developed failed to
necessarily make the case an intra-corporate dispute.
There are two circumstances which must concur in order for an
individual to be considered a corporate officer, as against an
ordinary employee or officer, namely: (1) the creation of the position
is under the corporations charter or by-laws; and (2) the election of
the officer is by the directors or stockholders. It is only when the
officer claiming to have been illegally dismissed is classified as such
corporate officer that the issue is deemed an intra-corporate dispute
which falls within the jurisdiction of the trial courts. Cosare,
although an officer of Broadcom for being its AVP for Sales, was not
a "corporate officer" under the contemplation of the law.
Policy of FRIA
It expresses the policy of the State to encourage debtors, both juridical
and natural persons, and their creditors to collectively and realistically
resolve and adjust competing claims and property rights. (Section 2, FRIA)
Debtor
It shall refer to a sole proprietorship duly registered with the DTI, a
partnership duly registered with the SEC, a corporation duly organized and
existing under Philippine Laws, or an individual debtor who has become
insolvent.
Insolvency
It refers to the financial condition of a debtor that is generally unable to pay
its or his liabilities as they due in the ordinary course of business or has
liabilities that are greater than its or his assets.
Technical Insolvency
There are adequate assets but the Debtor has no sufficient cash to pay its
maturing liabilities.
Creditor
It refers to a natural or juridical person which or who has a claim against the
debtor that arose on or before the commencement date.
The Court may however issue orders in a Petition for Assistance filed
either by the debtor or creditor who are parties to on-going negotiation.
Cram-Down Effect
The Court may bind those unwilling creditors to the restructuring plan that
may be perfected. The notice of the Rehabilitation Plan or restructuring
agreement shall be published once a week for at least three (3) consecutive
weeks in a newspaper of general circulation in the Philippines.
a.Voluntary (Debtor-initiated)
It must be alleged that there is approval by the Majority of the Board of
Directors and stockholders representing 2/3 of the OCS.
b.Involuntary (Creditor-initiated)
1. The Petition for Rehabilitation is filed by any creditor or group of
creditors whose claims is a least either P1,000,000.00 or debts
equivalent to at least 25% of the subscribed capital stock or
partners contributions of the debtor, whichever is higher.
2. A creditor may initiate an Involuntary proceedings against a debtor
if:
There is no genuine issue of fact on law on the claims and that
the due and demandable payments thereon have not been
made at least 60 days prior to the filing of the petition.
A creditor, other than the petitioner, has initiated foreclosure
proceedings against the debtor that will prevent the debtor
from paying its debts as they become due or will render it
insolvent. (Section 13, FRIA.)
Pari Passu- Equality in Equity. All creditors will be treated alike and in
equal footing as far as the revenues and assets of the creditor If the
Court finds that it is fair to treat all as equals, the pari passu is applied.
It is not only equality in suspension of claims but also suspension in
payment. There is pro-rata distribution of assets among all creditors.
This is to alleviate the strict application of the Preference and
Concurrences of Credits in the Civil Code.
Certainly, not the rehabilitation court which has not been given the
power to resolve ownership disputes between Advent Capital and third
parties. Neither Belson nor the Alcantaras are its debtors or creditors
with interest in the rehabilitation.
Commencement Order
Immediately and within 5 days for filing of the petition, the Rehab Court is
required to issue a Commencement Order which contains therein a
Suspension or Stay Order. The rehabilitation proceedings commences after
the issuance of such order. The same is effective for the entire duration of
the rehabilitation proceedings.
The court held that the rationale behind the law (P.D. 902-A) is to effect
a feasible and viable rehabilitation, which cannot be achieved if one
creditor is preferred over the others.
d. Prohibit the debtor from making any payment of its liabilities outstanding
as of the commencement date except as may be provided.
Under the new language of the FRIA, it is clear that all expenses
incurred prior to the issuance of the stay order are deemed to be
covered by the suspensive effect of the order, and that term
Administrative expenses can only cover those types of expenses
incurred in the ordinary course of business incurred after the issuance
of the stay order.
A: No. The case is suspended. Creditor should instead take part in the
rehabilitation proceedings.
Q: After December 15, 2016, can the RTC continue to hear a case of Pogi,
Inc. vs. Debtor filed before such date pending in a separate branch?
A: Yes. This is not within the coverage of the Suspension Order. What are
suspended are claims against the corporate debtor. Except if there is a
counterclaim for a claim against the Corporate Debtor, which may either
be a permissive or compulsory CC.
a.Voluntary Liquidation
It must be approved by the majority of the Board of Directors and
stockholders representing 2/3 of the OCS.
b.Involuntary Liquidation
This is filed by any creditor or group of creditors whose claims is a least
either P1,000,000.00 or debts equivalent to at least 25% of the subscribed
capital stock or partners contributions of the debtor, whichever is higher.