G.R. No. 190462 - STEEL CORPORATION OF THE PHILIPPINES, VS. EQUITABLE PCI BANK, INC., (NOW KNOWN AS BDO UNIBANK, INC.). [G.R. No. 190538]DEG - DEUTSCHE INVESTITIONS-UND ENTWICKLUNGSGESELLSCHAFT MBH, VS. EQUITABLE PCI BANK, INC., (NOW KNOWN AS BDO UNIBANK, INC.) AND STEEL CORPORATION OF THE PHILIPPIN

Ruling

Accordingly, on September 11, 2006, Equitable PCI Bank, Inc., now known as Banco de Oro-EPCI, Inc. (BDO-EPCIB), which accounted for 27.45% of the total liabilities of SCP, filed a creditor-initiated petition--to place the SCP under corporate rehabilitation pursuant to the provisions of Section 1, Rule 4 of the Interim Rules of Procedure on Corporate Rehabilitation--entitled In the Matter of the Petition to have Steel Corporation of the Philippines Placed under Corporate Rehabilitation with Prayer for the Approval of the Proposed Rehabilitation Plan . BDO-EPCIB included its proposed rehabilitation plan in the said petition. Finding the petition to be sufficient in form and substance, the Rehabilitation Court issued an Order dated September 12, 2006, directing, among others, the stay of enforcement of all claims, whether for money or otherwise and whether such enforcement is by court action or otherwise, against SCP, its guarantors, and sureties not solidarily liable with it. The Rehabilitation Court likewise appointed Atty. Santiago T. Gabionza, Jr. as the Rehabilitation Receiver for SCP. SCP did not oppose the petition but instead filed its own counter rehabilitation plan and submitted it for the consideration of the Rehabilitation Court. Other creditors filed their respective comments on the petition. On November 23, 2006, the Rehabilitation Court issued an Order, giving due course to the petition and directing Atty. Gabionza to evaluate the rehabilitation plan proposed by BDO-EPCIB and the proposals of the other participating creditors, and to submit his recommendations. The Rehabilitation Court also directed Atty. Gabionza to consider SCP's counter rehabilitation plan in drafting his recommended rehabilitation plan. In a Compliance dated March 6, 2007, Atty. Gabionza submitted his recommended rehabilitation plan. The said plan contained the salient features of the rehabilitation plans separately submitted by SCP and BDO-EPCIB, as well as his own comments. The plan was summarized by the Rehabilitation Court as follows: Thus, after considering the comments of the other participating creditors and evaluating the proposals of SCP and the petitioner, Atty. Gabionza recommended the following terms and conditions for rehabilitation plan, to wit: Fresh equity infusion of P3.5 Billion, out of which P3 Billion shall be used for debt reduction, and the balance of P500 Million as additional working capital. The P3 Billion allocated for debt repayment shall first service the secured credits and excess thereafter will be applied to clean creditors and suppliers. The remaining short term and long term debt balances after debt reduction will be restructured over a period of 12 years inclusive of a 2 year grace period on principal payments. There shall be 20 equal semi-annual payments of principal to commence at the end of the grace period. Interest rates for the restructure debt shall be 8% per annum fixed for the duration of the loan and shall be payable qua