ROBINSON’S BANK CORPORATION (FORMERLY THE ROYAL BANK OF SCOTLAND [PHILS.], INC.), VS. HON. SAMUEL H. GAERLAN, HON. HAKIM S. ABDULWAHID AND HON. RICARDO R. ROSARIO, IN THEIR CAPACITY AS ASSOCIATE JUSTICES RESPECTIVELY OF THE TENTH DIVISION OF THE COURT OF APPEALS, AND TRADE AND INVESTMENT DEVELOPMENT

Ruling

Accordingly, the receiver submitted his Report with Recommendation [13] dated September 27, 2007, to which RBC and TIDCORP filed their respective Comments. [14] Apparently, the Report proposed, among others, a pari passu or equal sharing between the secured and unsecured creditors of the proceeds from WGCs cash flow made available for debt servicing. [15] In its Comment, TIDCORP among others took exception to the proposed pari passu sharing, insisting that as a secured creditor, it should enjoy preference over unsecured creditors, citing law and jurisprudence to the effect that the law on preference of credits shall be observed in resolving claims against corporations under rehabilitation. [16] It likewise claimed that WGC violated its Indemnity Agreement [17] with TIDCORP which required that while the agreement subsisted, WGC shall not incur new debts without TIDCORPs approval [18] by obtaining additional loans without the knowledge and consent of the latter. RBC filed an Opposition [19] to TIDCORPs Comment, arguing pertinently that TIDCORPs objection to a pari passu sharing of WGCs cash flow proceeds and insistence on preferential treatment goes against the legal principle that during rehabilitation, both secured and unsecured creditors stand on equal footing, and that it is only when rehabilitation is no longer feasible and liquidation is the remaining option that secured creditors shall enjoy preference over unsecured creditors; [20] that giving preference to TIDCORP would violate the Stay Order and impair the powers of the receiver; and that any change in the contractual relations between TIDCORP and WGC relative to their Indemnity Agreement comes as a necessary consequence of rehabilitation, which TIDCORP may not be heard to complain. On June 6, 2008, the RTC issued an Order [21] approving WGCs rehabilitation plan, thus: WHEREFORE, the Rehabilitation Program submitted as Attachment A of the Report with Recommendation (On the Rehabilitation Program), dated September 27, 2007, of the Rehabilitation Receiver is hereby APPROVED with the following conditions to form part thereof: 1. that with the exception of the guarantee fees to TIDCORP (also known as PHILEXIM) all obligations of the petitioner should be settled on a pari-passu basis; 2. that the Rehabilitation Program should include a schedule of the equity infusion in the amount of Eighty Three Million Pesos; 3. that Petitioner should submit to the Court, copy furnished the creditors, the schedule of contracts under negotiations with its prospective clients with informations as to their status and proposed terms and conditions within thirty (30) days from receipt of this Order; 4. that Petitioner should submit to the Court, copy furnished the creditors, a complete inventory of all the properties it bought using the proceeds from the LC/TR within thirty (30) days from receipt of this Order; and 5. that the Petitioner should include in the Rehabilitation Program the repayme