Professional Documents
Culture Documents
Bpi Family Savings Bank Vs St. Michael Med Center
Bpi Family Savings Bank Vs St. Michael Med Center
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* FIRST DIVISION.
494
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PERLAS-BERNABE, J.:
Before the Court is a petition for review on certiorari1
assailing the Decision2 dated August 30, 2012 and the
Resolu-
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The Facts
Spouses Virgilio and Yolanda Rodil (Sps. Rodil) are the
owners and sole proprietors of St. Michael Diagnostic and
Skin Care Laboratory Services and Hospital (St. Michael
Hospital), a 5-storey secondary level hospital built on their
property located in Molino 2, Bacoor, Cavite. With a vision
to upgrade St. Michael Hospital into a modern, well-
equipped and full service tertiary 11-storey hospital, Sps.
Rodil purchased two (2) parcels of land adjoining their
existing property and, on May 22, 2003, incorporated
SMMCI, with which entity they planned to eventually
consolidate St. Michael Hospital’s operations. SMMCI had
an initial capital of P2,000,000.00 which was later
increased to P53,500,000.00, 94.49% of which outstanding
capital stock, or P50,553,000.00, was subscribed and paid
by Sps. Rodil.5
In May 2004, construction of a new hospital building on
the adjoining properties commenced, with Sps. Rodil
contributing personal funds as initial capital for the project
which was estimated to cost at least P100,000,000.00.6 To
finance the costs of construction, SMMCI applied for a loan
with petitioner BPI Family Savings Bank, Inc. (BPI
Family) which gave a credit line of up to P35,000,000.00,7
secured by a Real
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24 Id., at p. 191.
25 Id., at p. 192.
26 Id., at pp. 213-219.
27 Other than BPI Family, South East Star Enterprises and Lakeside
Pharmaceuticals Phils., Inc. filed their respective comments to the
Rehabilitation Petition; id., at p. 245.
28 Id., at pp. 249-256.
29 Id., at pp. 70-73 and 245-246.
501
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30 Id., at p. 254.
31 Id., at p. 255.
502
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pay the bank and the rest to improve the hospital to make it more
competitive with the nearby medical service providers.32
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In other words, rehabilitation assumes that the
corporation has been operational but for some
reasons like economic crisis or mismanagement had
become distressed or insolvent, i.e., that it is generally
unable to pay its debts as they fall due in the ordinary
course of business or has liability that are greater than its
assets.45 Thus, the basic issues in rehabilitation
proceedings concern the viability and desirability of
continuing the business operations of the distressed
corporation,46 all with a view of effectively restoring it
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507
Note that this defect is not negated by the submission of
the financial documents pertaining to St. Michael Hospital,
which is a separate and distinct entity from SMMCI. While
the CA gave considerable weight to St. Michael Hospital’s
supposed “profitability,” as explicated in its own financial
statements, as well as the feasibility study conducted by
Mrs. Alibangbang,48 in affirming the RTC, it has
unwittingly lost sight of the essential fact that SMMCI
stands as the sole petitioning debtor in this case; as such,
its rehabilitation should have been primarily examined
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A. Lack of Material Financial Commitment to
Support the Rehabilitation Plan.
A material financial commitment becomes significant in
gauging the resolve, determination, earnestness and good
faith of the distressed corporation in financing the proposed
rehabilitation plan. This commitment may include the
voluntary undertakings of the stockholders or the
would-be investors of the debtor-corporation indicating
their readiness, willingness and ability to contribute funds
or property to guarantee the continued successful
operation of the debtor corporation during the
period of rehabilitation.50
In this case, aside from the harped on merger of St.
Michael Hospital with SMMCI, the only proposed source of
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58 Id., at p. 86.
59 Wonder Book Corporation v. Philippine Bank of Communications,
G.R. No. 187316, July 16, 2012, 676 SCRA 489, 501.
514
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