Republic of the Philippines

REGIONAL TRIAL COURT

SIXTH JUDICIAL REGION
Branch 53, Bacolod City

GONZAGA REAL ESTATE

ENTERPRISES, INC.; et. al.,
Plaintiffs, Corporate Case No. 12-084

vs.

MA. CORAZON V. DULAY, et. al.,

Defendants.
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FORMAL OFFER OF EVIDENCE

(In Support of the Application

For the Appointment of a Receiver/ Management Committee)

Plaintiffs, by counsel, most respectfully and formally offer in

evidence the following documentary evidence:

Exhibits Description Remarks/Purpose

A Amended Complaint To show that there is an urgent
need for the appointment of a
receiver or management
committee to protect and
preserve the assets of the
corporation, which has suffered a
massive dissipation, loss and
wastage of its assets, and whose
remaining assets are in imminent
danger of being further
dissipated, wasted or lost if the
management of the affairs,
possession and control of the
Corporation are left in the hands
of Defendants.
B By-laws of GREEN, Inc. To prove that the Corporation is
duly organized in accordance
with the laws of the Philippines,
with principal office at Rizal St.,
Bacolod City, Philippines.
C Letter dated October To prove that Plaintiff Ma. Villa J.

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 30, 2007 Gonzaga sent a letter addressed
to herein Defendants concerning
C-1 The signature on top of Defendants’ deviation from the
the words "MA. VILLA J. agreed practice of electing a
GONZAGA" member from each family group
into the board of directors of the
Corporation, as well as to
formally demand for a copy of
the annual financial statements
of the Corporation.

D Letter dated November To prove that Defendant Ma.

26, 2007 Corazon V. Dulay wrote a letter,
attaching therewith a copy of the
E Balance Sheet as of July 2007 financial statements of the
31, 2007 Corporation, and the contents of
the 2007 financial statements.
F Statement of Income
and Expenses for the
Year Ending July 31,
2007

G Letter dated November To prove that Plaintiff Ma. Villa J.

29, 2007 Gonzaga wrote letters in
response to the letter dated
H Letter dated January November 26, 2007 of Defendant
18, 2008 Ma. Corazon V. Dulay

I Balance Sheet as of July To show the contents of the

31, 2008 (“2008 2008 Balance Sheet presented by
Balance Sheet”) the Defendants during the
October 20, 2008 annual
I-1 Cash – stockholders’ meeting.
P150,540
To show the material
I-2 Accounts Receivable - discrepancies in entries for the
P10,949,529 same items for the same fiscal
period between the figures as
I-3 Total Property and presented in the 2008 Balance
Equipment - Sheet and the 2008 Comparative
P1,880,070 Figures in the 2009 Balance
Sheet (Exhibit P), as prima facie
I-4 Total Assets – evidence of falsification.
P12,832,386

I-5 Total Liabilities –

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 P1,500,162

I-6 Total Stockholders’

Equity - P11,332,224

I-7 Total Liabilities and

Stockholders’ Equity -
P12,832,386

J Statement of Income To show the contents of the

and Expenses For the 2008 Income Statement
Fiscal Year Covering presented by the Defendants
August 1, 2007 to July during the October 20, 2008
31, 2008 annual stockholders’ meeting.
(“2008 Income
Statement”) To show that Defendants' gross
mismanagement, excessive
J-1 Net Revenues – compensation, abusive and
P2,051,908 wasteful use of corporate funds
and assets have already caused
J-2 Per Diem - P619,000.00 GREEN to lose the amount of
P406,852.00 in the year 2008.
J-3 Salaries, Wages and
Allowances - To show the material
P410,650 discrepancies in entries for the
same items for the same fiscal
J-4 Employees’ Benefits – period between the figures as
P175,770 presented in the 2008 Income
Statement and the 2008
J-5 Legal, Professional and Comparative Figures in the 2009
Audit Fees – Income Statement (Exhibit Q), as
P122,500 prima facie evidence of
falsification.
J-6 Representation and To show that because of the
Entertainment – material misstatements in the
P137,488 2009 Income Statement, a loss of
P406,852 (Exhibit J) became
J-7 Directors' Fees – income in the amount of
P78,000 P10,718 (Exhibit Q) for the same
fiscal year ending in July 31,
J-8 Total Cost and 2008.
Expenses - P2,460,526

K Digital disc containing a To prove the contents of the

copy of the audiotape audiotape recording of the
recording of the proceedings of the Corporation’s

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 October 20, 2008 annual stockholders’ meeting
annual stockholders' held on October 20, 2008, which
meeting of GREEN confirms and corroborates the
facts as alleged in the Complaint.

L 2008 Supplemental To prove the excessive spending

Expense Report of the directors and officers of
the Corporation, which caused
the Corporation to suffer a loss of
P406,852.00 for the fiscal year
ending on July 31, 2008.

To prove that Defendants Ma.

Corazon V. Dulay and Roberto G.
Vasquez were already receiving
compensation as officers of the
Corporation under “Salaries,
Wages and Allowances”.

To prove that despite the losses

of the Corporation, the
Defendants knowingly disbursed
the following amounts to
themselves to the great damage
of the Corporation:

1. Per Diems – P619,000

2. Employees’ Benefits –
P160,000
3. Directors’ Fees – P78,000
TOTAL P857,000

To prove that between the

conflicting figures for the same
items for the same fiscal period
in the 2008 Income Statement
and the 2008 Comparative
figures in the 2009 Income
Statement, the 2008 Income
Statement is supported by the
Supplemental Expense Report,
with dates, particulars, voucher
reference numbers, check
numbers and amounts, which
shows that the 2008 Income
Statement represents a true
accounting of the 2008 income
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 and disbursements of GREEN,
Inc., while the 2009 Income
Statement contains false
information.

M Letter dated April 12, To prove that Plaintiff Ma. Villa J.

2011 Gonzaga sent a letter addressed
to the Defendants, asking the
M-1 Signature on top of the Defendants to explain why no
words "MA. VILLA J. stockholders’ meeting was held
GONZAGA" for the years 2009 and 2010, and
contained a formal request for
copies of the Corporation’s
financial statements, for the
fiscal years ending on July 31,
2009 and July 31, 2010,
respectively.

To prove that no stockholders’

meetings were held in the fiscal
years 2009 and 2010.

N Statement of To prove that Defendants Ma.

Management Corazon V. Dulay and Roberto G.
Sub- Responsibility dated Vasquez made the false
markings October 8, 2009 statement that the 2009
Financial Statements were
N-1 “approved and submitted to the
N-2 stockholders of the company”,
N-3 when in truth, no financial
N-4 statements were ever presented,
approved and submitted to the
stockholders of the company,
since no stockholders’ meetings
were held during the year 2009.

To prove that Defendants have

full knowledge and control over
the 2009 Financial Statements,
having stated that Defendants
are responsible for all
information and representation
contained in the 2009 Financial
Statements and that they review
such financial statements before
the statements are approved and
submitted to the management of
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 the Corporation.

O-1 and O-2 Independent Auditor's To prove that Defendants, as

Report dated management, are responsible for
November 10, 2009 (2 the 2009 Financial Statements.
pages)
P Balance Sheet as of July To show that Defendants’
31, 2009 (“2009 falsified entries in the
Balance Sheet”) corporation's financial
statements to cover up their
P-1 Cash – gross mismanagement, excessive
P408,669 compensation, abusive and
wasteful use of corporate funds.
P-2 Accounts Receivable –
P30,179 To show the discrepancies in
entries for the same items for the
P-3 Property and same fiscal period between the
Equipment – Net - figures as presented in the 2008
P12,276,775 Balance Sheet (Exhibit I) and the
2008 Comparative Figures in the
P-4 Total Assets – 2009 Balance Sheet, and to prove
P13,090,516 that the 2009 Balance Sheet
contain material misstatements.
P-5 Total Liabilities –
P1,340,722

P-6 Total Equity -

P11,749,794

P-7 Total Liabilities and

Equity - P13,090,516

Q Statement of Income To show the material

and Expenses for the discrepancies in entries for the
Year Ending July 31, same items for the same fiscal
2009 period between the figures as
(“2009 Income presented in the 2008 Income
Statement”) Statement and the 2008
Comparative Figures in the 2009
Q-1 Revenues – Income Statement (Exhibit P), as
P1,159,798 prima facie evidence of
falsification.
Q-2 Cost of Revenues –
P984,977
To show that Defendants’
falsified entries in the
Q-3 Operating Expenses –
corporation's financial
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 P161,049 statements to cover up their
gross mismanagement, excessive
compensation, abusive and
wasteful use of corporate funds.

To show that because of the

material misstatements in the
2009 Income Statement, a loss of
P406,852 (2008 Income
Statement) became income in the
amount of P10,718 (2008
Figures in 2009 Income
Statement) for the same fiscal
year ending in July 31, 2008.

R Statement of Changes To prove the contents of the

in Stockholders' Equity 2009 Financial Statements
as of July 31, 2009

S Statement of Cash To prove the contents of the

Flows for the Year 2009 Financial Statements
Ending July 31, 2009

T-1 to T-15, Notes to the Financial To prove that no explanations or

respectively Statements July 31, disclosures were made by
2009 (15 pages) Defendants to explain the
material discrepancies and
misstatements in the 2009
Financial Statements.

To prove that the following items

already declared in the 2008
Income Statement and 2008
Supplemental Expense Report
were not declared in the 2008
Figures of the 2009 Financial
Statements:

1. Per Diem - P619,000.00

2. Legal, Professional and Audit
Fees
3. Directors' Fees – P78,000

T-15-a Salaries, Wages and To prove that “Salaries, Wages

Allowances and Allowances” was changed
P110,650 from P410,650 in the 2008
Income Statement (Exhibit J-3)
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 to P110,650.

T-15-b Employees’ Benefits - To prove that “Employees’

P25,770 Benefits” was changed from
P175,770 in the 2008 Income
Statement (Exhibit J-4) to
P25,770.

T-15-c Representation and To prove that “Representation

Entertainment – and Entertainment” was changed
P17,488 from P137,488 in the 2008
Income Statement (Exhibit J-6)
to P17,488.

U Statement of To prove that Defendants have

Management’s full knowledge and control over
Sub- Responsibility for the 2010 Financial Statements,
markings Annual Income Tax having stated that Defendants
Return for the fiscal are responsible for all
U-1 year ending on July 31, information and representations
U-2 2010 contained in the 2010 Financial
U-3 Statements.
V Statement of To prove that Defendants Ma.
Management Corazon V. Dulay and Roberto G.
Sub- Responsibility dated Vasquez made the false
markings October 12, 2010 statement that the 2010
Financial Statements were
V-1 “approved and submitted to the
V-2 stockholders of the company”,
V-3 when in truth, no financial
V-4 statements were ever presented,
approved and submitted to the
stockholders of the company,
since no stockholders’ meetings
were held during the year 2010.

To prove that Defendants have

full knowledge and control over
the 2010 Financial Statements,
having stated that Defendants
are responsible for all
information and representation
contained in the 2010 Financial
Statements and that they review
such financial statements before
the statements are approved and

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 submitted to the management of
the Corporation.

W Independent Auditor's To prove that Defendants, as

Report dated management, are responsible for
November 8, 2010 the 2010 Financial Statements.

X Balance Sheet as of July To prove that the material

31, 2010 (2010 Balance misstatements contained in the
Sheet) 2008 comparative figures of the
2009 Financial Statements of the
Y Statement of Income Corporation were carried over to
and Expenses for the the 2010 Financial Statements.
Year Ending July 31, These likewise prove that since
2010 the false information was carried
over, the 2010 Financial
Z Statement of Cash Statements is materially
Flows for the Year misstated and cannot be relied
Ending July 31, 2010 on to show the true financial
position of the Corporation.
AA Statement of Changes
in Stockholders' Equity
as of July 31, 2010

BB-1 to BB- Notes to the Financial To prove that no explanations or

15, Statements July 31, disclosures were made by
respectively 2010 (15 pages) Defendants to explain the
material discrepancies and
misstatements in the 2010
Financial Statements.

CC Statement of To prove that this formed part of

Representative dated the 2010 Financial Statements of
November 8, 2010 the Corporation and to
corroborate the matters alleged
in the Complaint.

DD Engagement To prove the allegations in

Agreement support of the prayer for the
payment of damages by
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 Defendants to the Plaintiffs,
which includes attorney’s fees.

The 2008 Financial Statements show that Defendants' gross

mismanagement, excessive compensation, abusive and wasteful use of
corporate funds and assets have already caused GREEN to lose the
amount of P406,852.00 in the year 2008. Defendants misappropriated
and siphoned the funds of the Corporation by disbursing to themselves
at the very least, the amount of P857,000 in the form of Per Diems,
Employees’ Benefits and Directors’ Fees. This amount is on top of the
salaries received by Defendants Ma. Corazon V. Dulay and Roberto G.
Vasquez.

One year after, in 2009, Defendants falsified entries in the Corporation's

financial statements to hide their excessive compensation and abuse of
corporate funds.

They covered up the losses suffered by the Corporation in the year 2008
by making it appear in the 2009 Financial Statements that the
Corporation was operating at a profit. Net loss already declared by the
Defendants in the 2008 Income Statement of P406,852 became income
in the amount of P10,718 in the 2008 Figures of the 2009 Income
Statement, for the same fiscal year 2008.

They stopped holding stockholders' meetings after the 2008

stockholders' meeting. To date, no stockholders' meetings have been
held for the past SEVEN years. They have absolute control over the
funds and assets of the corporation, and do not hesitate to cover up
their abuses by falsifying financial statements. It stands to reason that
Defendants' acts have already caused the corporation to suffer
tremendous losses and will bleed the corporation dry with their abuses
and fraudulent practices if left unhindered.

Through Defendants' unlawful acts, the Corporation has suffered a

massive dissipation, loss and wastage of its assets. If the management of
the affairs, possession and control of the corporation are left in the
hands of Defendants, the remaining assets of the Corporation are in
imminent danger of being further dissipated, wasted or lost.

While the Defendants are able to produce falsified financial statements

that paint a healthy picture of the Corporation's affairs to cover up its
losses, there is imminent danger not only of the paralyzation of the
Corporation’s business operations, but ultimately, of its collapse.

There is therefore an urgent need for the appointment of a receiver or

management committee to protect and preserve the assets of the

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corporation. The only way to stem the damage inflicted by Defendants
upon the Corporation is to immediately freeze the funds and assets of
the corporation. The only way that Defendants can be made to account
for all their acts of mismanagement and abuses, and for a thorough and
independent audit of the financial situation of the Corporation can be
made is through the appointment of an independent receiver or a
management committee to immediately take over the management of
the Corporation.

With the admission of the foregoing exhibits and the testimonial

evidence for the Plaintiffs, Plaintiffs earnestly entreat the Honorable
Court for the immediate issuance of an order appointing a receiver or
management committee, without prejudice to the presentation of
additional evidence if necessary in the hearing of the main case..

PRAYER

WHEREFORE, premises considered, Plaintiffs most respectfully

pray of this Honorable Court that the instant application be granted and
for the Honorable Court to issue an order appointing a receiver, and if
necessary, a management committee to immediately take over the
management of the Corporation, as well as the custody and control of all
assets and properties owned or possessed by the Corporation.
Other reliefs just and equitable are likewise prayed for.

Most respectfully submitted.

Bacolod City, January 22, 2016.

MICHELLE VARCA GONZAGA

Roll No. 49584
MCLE IV No. 0011199/2-5-2013
IBP No. 1008409/1-5-2016/Bacolod City
PTR No. 6343516/1-5-2016/Bacolod City
2/F St. Therese Bldg.
Cor. Rizal Locsin Sts., Bacolod City
Tel. No. 034 4340049

COPY FURNISHED:

ATTY. ROMEO CARLOS M. TING, JR.

Counsel for Defendants
Rm. 304, Capitol Subdivision Bldg.
16th Lacson St., Bacolod City

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