Question

Commercial

Salvacion Printing Corporation (SPC) filed a petition for corporate rehabilitation before the Regional Trial Court acting as a Special Commercial Court. The court issued a commencement order and eventually approved a rehabilitation plan requiring all creditors to accept a 40% reduction in their outstanding claims and to convert the remaining 60% balance into equity in the rehabilitated corporation. BDO Capital Bank (BCB), a secured creditor holding a real estate mortgage over SPC's printing facilities worth PHP 80 million, voted against the plan and refused to be bound by it. BCB argued that as a secured creditor, it had a superior right to the mortgaged assets and could not be compelled to accept reduced claims or an equity conversion it did not consent to. SPC countered that the rehabilitation court had the authority to confirm the plan despite BCB's objection. May the rehabilitation court confirm the rehabilitation plan over BCB's objection? (Bar 2026 Syllabus)

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