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Pryce Corp vs. China Bank - G.R. No. 172302

The Supreme Court ruled that no hearing is required prior to issuing a stay order in corporate rehabilitation proceedings. The case involved a petition for corporate rehabilitation filed by Pryce Corporation that was granted by the trial court, which appointed a rehabilitation receiver. Two creditors, China Banking Corporation and BPI, objected to the approved rehabilitation plan. While the appellate court annulled the trial court's decision regarding China Banking, it upheld the decision regarding BPI. Pryce Corporation appealed, arguing the issues were already settled and that no hearing is needed for a stay order under the interim rules. The Supreme Court held that the interim rules do not require a hearing or detailed findings in a stay order, which takes effect upon issuance

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252 views1 page

Pryce Corp vs. China Bank - G.R. No. 172302

The Supreme Court ruled that no hearing is required prior to issuing a stay order in corporate rehabilitation proceedings. The case involved a petition for corporate rehabilitation filed by Pryce Corporation that was granted by the trial court, which appointed a rehabilitation receiver. Two creditors, China Banking Corporation and BPI, objected to the approved rehabilitation plan. While the appellate court annulled the trial court's decision regarding China Banking, it upheld the decision regarding BPI. Pryce Corporation appealed, arguing the issues were already settled and that no hearing is needed for a stay order under the interim rules. The Supreme Court held that the interim rules do not require a hearing or detailed findings in a stay order, which takes effect upon issuance

Uploaded by

KRISTINE VEYRA
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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G.R. No.

172302, February 18, 2014

PRYCE CORPORATION, Petitioner,


vs.
CHINA BANKING CORPORATION, Respondent.

LEONEN, J.:

FACTS:

Petition for corporate rehabilitation filed by petitioner Pryce Corporation on July 9, 2004 in the Makati Regional
Trial Court. The Rehabilitation Tribunal found the petition to have sufficient form and substance and granted a stay
on July 13, 2004, appointing General T. Mendoza as Rehabilitation Receiver. Mendoza as Receiver, he was tasked
with evaluating and making recommendations on the recovery plan proposed by the Pryce Group. After denying
these claims, he presented a revised rehabilitation plan which was approved by the court. China Banking
Corporation and Bank of the Philippine Islands, both creditors of the Pryce Group, objected to the approval of the
said recovery plan. They argued that such a plan violated the contract's non-amortization and reciprocity clauses.
However, the reformation court still maintained the reformation plan. Bank of China and BPI filed separate appeals.
In the case of the Bank of China, the decision of the recovery court was annulled. However, in BPI's case, the
amendment court's decision was upheld and affirmed. Pryce Group also appealed to this court, rejecting the request
of defendant China Banking Group. The Pryce Group argues that the question of the validity of the current
corrections court orders is a judicata matter. Plaintiff Pryce Corporation contends that the decision in BPI v. The
Pryce Group contradicted this case and raised the issue of the validity and regularity of Rehabilitation Court orders
as res judicata. Second, petitioner Pryce Corporation asserts that Rule 4, Section 6, of the Corporate Rehabilitation
Interim Rules of Procedure does not require the Rehabilitation Court to hold a hearing before issuing a temporary
restraining order

ISSUES:

Whether or not a hearing is needed prior to the issuance of a stay order in corporate rehabilitation proceedings

HELD:

NO. The Interim Rules do not require a comprehensive discussion in the stay order on the court's findings of
sufficiency in form and substance. The stay order and appointment of a rehabilitation receiver dated July 13, 2004 is
an "extraordinary, preliminary, for one party remedy." The effectivity period of a stay order is from the date of its
issuance until dismissal of the petition or termination of the rehabilitation proceedings. The Interim Rules do not
require a hearing before the issuance of a stay order, but the trial court has ample discretion to call a hearing when it
is not confident that the allegations in the petition are sufficient in form and substance.

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