2.

 Hacienda Luisita Incorporated vs Presidential Agrarian Reform Council

G.R. No. 171101 April 24, 2018

FACTS: 

In July 5, 2011, the Court directed petitioner Hacienda Luisita Incorporated (HLI) to, among other things,
pay the 6,296 qualified farm-worker beneficiaries (FWBs) of the hacienda the unspent or unused balance of the
proceeds of the sale of the 580.51-hectare lot received by the company. On November 22, 2011, the Court, acting
on several incidents, issued a Resolution denying, in the main, petitioner's motion for reconsideration and standing
firm in its Decision of July 5, 2011. 

To determine if the PhP 1,330,511,500 proceeds of the sale were actually used or spent for legitimate
corporate purposes, DAR is ordered to engage the services of a reputable accounting firm approved by the parties
to audit the books of HLI and Centennary Holdings, Inc, its owned subsidiary. Any unspent or unused balance and
any disallowed expenditures as determined by the audit shall be distributed to the 6,296 original FWBs.
Essentially, to arrive at what shall As to the meaning of the term "legitimate corporate expenses,” the following
are deducted therefrom: 1. 3% of the proceeds that were already paid to the FWBs; 2. tax expenses relating to the
transfer of titles to the transferees; and 3. expenditures incurred by the Company for legitimate corporate
expenses. As to the meaning of the term "legitimate corporate expenses,"  the Court clarified it by referring to the
definition of "ordinary and necessary expenses" used for taxation purposes.

ISSUE: Are there any unused balance and any disallowed expenditures that may be distributed to farm-worker
beneficiaries?

RULING:

No. all three members of the audit panel have determined that the legitimate corporate expenses of HLI
for the years 1998 up to 2011, coupled with the taxes and expenses related to the sale and the 3 % share already
distributed to the FWBs, far exceed the proceeds of the sale of the adverted 580.51-hectare lot. In net effect,
there is no longer any unspent or unused balance of the sales proceeds available for distribution. The July 5, 2011
Decision and November 22, 2011 Resolution of the Court insofar as it directed that "any unspent or unused balance
and any disallowed expenditures as determined by the audit shall be distributed to the 6,296 original FWBs" are
considered fully complied with.