The rehabilitation of Express Telecommunications Co. Inc. (Extelcom) may now proceed following the dismissal by the Court of Appeals (CA) of a petition for certiorari and prohibition filed by Bayan Telecommunications Inc. (BayanTel) and Marifil Holdings Inc.
In a decision handed down on Dec. 20, 2008, the CA dismissed the petition after BayanTel had failed to question or comment on Extelcom’s rehabilitation plan within 10 days after the initial hearing of the Manila Regional Trial Court branch 24, which serves as the rehabilitation court.
The CA ruled that the Securities and Exchange Commission (SEC) did not err in approving the rehabilitation plan, which has converted Extelcom’s debts into equity without requiring its creditors to exercise deeds of assignment.
Justice Regalado Maambong, chairman of the CA’s 15th division, penned the decision, which was unanimously concurred by Justices Monina Zenarosa and Arturo Tayag. A copy of the CA decision was released over the weekend.
The case started from the petition for corporate rehabilitation, which Trans Digital, one of Extelcom’s major creditors, filed the Manila RTC.
The Manila RTC branch 24, under Judge Antonio Eugenio, was named the rehabilitation court, which subsequently named Victor Macalingcag as the rehabilitation receiver.
BayanTel, an Extelcom major creditor, and Marifil Holdings, an Extelcom major stockholder, had asked the rehabilitation court to stop the rehabilitation plan and proposed their own alternative plan, which they claimed as superior and would put Extelcom to its former viable position.
Claiming they did not learn that the SEC has increased and decreased Extelcom’s authorized capital as part of its rehabilitation plan, Marifil, as a stockholder, asked the SEC to reverse its approval of the capital stock, amended articles of incorporation, and equity restructuring.
The rehabilitation plan called for the conversion into equity of Extelcom’s debt of more than P9 billion, almost wiping out all its debts.