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    New Frontier Sugar Digest

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    Von Lee De Luna
    The Supreme Court ruled that New Frontier Sugar Corp was not eligible for corporate rehabilitation because Equitable PCI Bank had already foreclosed on the company's properties before the rehabilitation receiver was appointed. Specifically: - New Frontier filed for corporate rehabilitation in August 2002, but Equitable PCI Bank had already foreclosed on New Frontier's properties in March and May 2002 and acquired title to the properties, which comprised most of New Frontier's assets. - Under the rules, the suspension of claims against a corporation begins only when the rehabilitation receiver is appointed, which for New Frontier was in August 2002. - Therefore, Equitable PCI Bank's foreclosure actions before this date were valid, leaving

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    New Frontier Sugar Digest

    Uploaded by

    Von Lee De Luna
    199 views1 page
    The Supreme Court ruled that New Frontier Sugar Corp was not eligible for corporate rehabilitation because Equitable PCI Bank had already foreclosed on the company's properties before the rehabilitation receiver was appointed. Specifically: - New Frontier filed for corporate rehabilitation in August 2002, but Equitable PCI Bank had already foreclosed on New Frontier's properties in March and May 2002 and acquired title to the properties, which comprised most of New Frontier's assets. - Under the rules, the suspension of claims against a corporation begins only when the rehabilitation receiver is appointed, which for New Frontier was in August 2002. - Therefore, Equitable PCI Bank's foreclosure actions before this date were valid, leaving

    Original Description:

    NEW FRONTIER SUGAR DIGEST FRIA

    Original Title

    NEW FRONTIER SUGAR DIGEST

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    The Supreme Court ruled that New Frontier Sugar Corp was not eligible for corporate rehabilitation because Equitable PCI Bank had already foreclosed on the company's properties before the rehabilitation receiver was appointed. Specifically: - New Frontier filed for corporate rehabilitation in August 2002, but Equitable PCI Bank had already foreclosed on New Frontier's properties in March and May 2002 and acquired title to the properties, which comprised most of New Frontier's assets. - Under the rules, the suspension of claims against a corporation begins only when the rehabilitation receiver is appointed, which for New Frontier was in August 2002. - Therefore, Equitable PCI Bank's foreclosure actions before this date were valid, leaving

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    199 views1 page

    New Frontier Sugar Digest

    Uploaded by

    Von Lee De Luna
    The Supreme Court ruled that New Frontier Sugar Corp was not eligible for corporate rehabilitation because Equitable PCI Bank had already foreclosed on the company's properties before the rehabilitation receiver was appointed. Specifically: - New Frontier filed for corporate rehabilitation in August 2002, but Equitable PCI Bank had already foreclosed on New Frontier's properties in March and May 2002 and acquired title to the properties, which comprised most of New Frontier's assets. - Under the rules, the suspension of claims against a corporation begins only when the rehabilitation receiver is appointed, which for New Frontier was in August 2002. - Therefore, Equitable PCI Bank's foreclosure actions before this date were valid, leaving

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    New Frontier Sugar v.

    RTC prohibiting payment of outstanding liabilities, and prohibiting the


    withholding of supply of goods and services from the debtor.
    Doctrine: Any transfer of property or any other conveyance, sale,
    The suspension of the enforcement of all claims against the payment, or agreement made in violation of the Stay Order or in
    corporation is subject to the rule that it shall commence only from the violation of the Rules may be declared void by the court upon motion or
    time the Rehabilitation Receiver is appointed. motu proprio.
    Nevertheless, the suspension of the enforcement of all claims
    against the corporation is subject to the rule that it shall commence
    Facts:
    only from the time the Rehabilitation Receiver is appointed.
    Petitioner New Frontier Sugar Corp is a domestic corporation
    In this case, respondent bank instituted the foreclosure
    engaged in the business of raw sugar milling. In 2002, it filed a Petition
    proceedings against petitioner’s properties on March 13, 2002 and a
    for the Declaration of State of Suspension of Payments with Approval of
    Certificate of Sale at Public Auction was issued on May 6, 2002, with
    Proposed Rehabilitation Plan under the Interim Rules of Procedure on
    respondent bank as the highest bidder. The mortgage on petitioner’s
    Corporate Rehabilitation. The RTC, then, issued a Stay Order appointing
    chattels was likewise foreclosed and the Certificate of Sale was issued
    Manuel B. Clemente as rehabilitation Receiver.
    on May 14, 2002.
    Respondent Equitable PCI Bank, one of petitioner’s creditors
    On the other hand, the petition for corporate rehabilitation was
    filed an opposition alleging that petitioner is not qualified for corporate
    filed only on August 14, 2002 and the Rehabilitation Receiver
    rehabilitation, as it can no longer operate because it has no assets left,
    appointed on August 20, 2002. Respondent bank, therefore, acted
    and that the financial statements, schedule of debts and liabilities,
    within its prerogatives when it foreclosed and bought the property, and
    inventory of assets, affidavit of general financial condition, and
    had title transferred to it since it was made prior to the appointment of
    rehabilitation plan submitted by petitioner are misleading and
    a rehabilitation receiver.
    inaccurate since its properties have already been foreclosed and
    Hence it was correct for CA to uphold the dismissal the petition
    transferred to respondent bank before the petition for rehabilitation
    for rehabilitation as petitioner has no more assets to speak of, because
    was filed, and petitioner, in fact, still owes respondent bank deficiency
    its properties reclosed by respondent bank comprise the bulk, if not the
    liability.
    entirety, of its assets.
    Both the RTC and CA ruled that petitioner no has sufficient
    assets and properties to continue with its operations and answer its
    liabilities, and that it is no longer eligible for rehabilitation.

    Issue:
    Whether the petitioner is eligible for rehabilitation - No

    Ruling:
    Under the Interim Rules of Procedure on Corporate
    Rehabilitation, the RTC, within five (5) days from the filing of the
    petition for rehabilitation and after finding that the petition is sufficient
    in form and substance, shall issue a Stay Order appointing a
    Rehabilitation Receiver, suspending enforcement of all claims,
    prohibiting transfers or encumbrances of the debtor’s properties,

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