August 21, 1985

Mr. Roberto R. Palmares

Palmares Law Office
Gorones Building, Mezzanine 1
Juan Luna St., Cebu City

Sir :

This refers to your letter dated June 24, 1985 wherein you manifested
your opposition to the merger of German B. Arañez, Inc., and Asean Timber
and Development Corporation. cdtai

You alleged that your client, Cebu Liberty Lumber Co., is a creditor of
German B. Arañez for a substantial amount. According to the merger
agreement between the said two entities, the absorbing company would
absorb and assume all the liabilities of the absorbed company. Up to the
present however, your client has not been paid, hence, you are requesting
this Commission to take remedial steps to compel the merged companies to
pay their obligation to your client.
A verification of our records disclosed that the merger of the above-
named corporations was approved by this Office on June 30, 1984.
Regarding the legal effects of merger, the Corporation Code provides:
"SECTION 80. Effects of merger or consolidation. — . . .
5. The surviving or consolidated corporation shall be
responsible and liable for all the liabilities and obligations of each of
the constituent corporations in the same manner as if such surviving
or consolidated corporation had itself incurred such liabilities or
obligations; and any pending claim, action or proceeding brought by
or against any of such constituent corporations may be prosecuted by
or against the surviving or consolidated corporation. The rights of
creditors or liens upon the property of any of such constituent
corporations shall not be impaired by such merger or consolidation." cda

Thus, Asean Timber and Development Corporation, the surviving

company in the instant case, is under obligation to assume the liabilities of
German B. Arañez, Inc., the absorbed company. However, it appearing that
your complaint does not involve any controversy arising out of intra-
corporate relations, the Commission regrets to inform you that it cannot take
cognizance of your complaint/request.
It is, therefore, advised that since the liability arose out of contractual
obligation, you settle the matter with Asean Timber and Development
Corporation itself, and should you believe that your client's claim cannot be
settled amicably, you may file a proper action with the regular courts.
Please be advised accordingly. cdtai

Very truly yours,

CD Technologies Asia, Inc. © 2021 cdasiaonline.com

 (SGD.) JULIO L. SULIT, JR.
Associate Commissioner

CD Technologies Asia, Inc. © 2021 cdasiaonline.com