Court junks rehab plea of Uniwide affiliate
MANILA, Philippines—A company affiliated with debt-strapped Uniwide Group of Companies lost its bid for a court-assisted corporate rehabilitation and was cited for “forum shopping,” in view of a similar case lodged in the Securities and Exchange Commission in 1999.
Forum shopping refers to the filing of multiple suits involving the same parties and the same cause of action, either simultaneously or successively, to obtain favorable judgment.
The Securities and Exchange Commission declared the Uniwide group’s decade-long corporate rehabilitation a failure in 2010, placing it in the brink of dissolution and liquidation.
In a resolution dated March 8, the Regional Trial Court of Las Piñas junked a petition for corporate rehabilitation filed by the Uniwide Sales Realty and Resources Corp. (USRRC), which would have given the firm debt relief and protection from creditors running after its assets.
Although USRRC had indicated in its court petition several cases filed by its parent company in the SEC and the withdrawal of the rehabilitation petition, the court noted that the company did not mention that the rehab plea was junked by the SEC hearing panel and that the case was on appeal. What the company was apparently withdrawing was the appeal for reconsideration of the SEC decision.
A mere motion to withdraw, without the approval of the SEC, will not exempt petitioner from any ruling that the corporate regulator makes on the issue, said the RTC ruling penned by presiding judge Salvador Timbang Jr.
“With the act of forum shopping committed by the petitioner and with the non-inclusion of certain facts and events in this petition as mentioned above, this court is constrained to believe that the herein petition was filed only to delay the enforcement by the creditors of their rights,” Timbang said in the five-page ruling.
Based on audited financial statements as of end-2011, USRRC had total assets of P965 million while liabilities stood at P3.47 billion. An appraisal report given by Cuervo Appraisers pegged the total market value of its properties at P2.53 billion.
The company’s receiver, Rogelio Bondoc Jr., had recommended that the rehabilitation be considered, saying it could be made feasible through “the redevelopment of the assets of the petitioner, in particular the Metromall property.”
The receiver also noted that the claims of creditors Philippine National Bank and Grandholdings Investments (a special purpose vehicle that inherited the claims of Allied Banking Corp.) had amounted to P1.19 billion, suggesting that Uniwide would still be left with something after paying these creditors since the market value of the properties was higher at P2.53 billion.
Both PNB and Grandholdings, however, were opposing the petition for corporate rehabilitation, noting that USRRC had a pending appeal with the SEC en banc on the SEC hearing panel’s termination of rehabilitation proceedings.
PNB has a claim of P4.08 billion (as of February 2010) from Uniwide while Grandholdings’ claim is worth P3.03 billion (as of December 2012).
For its part, PNB said the P750-million loan it extended to the Gows’ Uniwide Holdings Inc. was secured by a property under the name of petitioner USRRC. The bank had also opposed the appointment of Bondoc as the company’s receiver.
In 2010, the SEC hearing panel denied the Uniwide group’s petition to make further changes to the rehabilitation plan, which was being opposed by the majority of its creditors. “Their story is no different from other overreaching business empires which ran up ruinous debts that must one day be paid,” the report from the SEC hearing panel had said.
The PSE then suspended the trading of Uniwide Holdings.
The SEC hearing panel had junked the Uniwide group’s rehabilitation plan.