MANILA, Philippines - Trans Digital Excel (TDE), creditor-turned-shareholder of Express Telecommunications Co. (Extelcom), has asked the Court of Appeals to junk the motion filed by Bayan Telecommunications (Bayantel) for reconsideration of the court’s decision dismissing the latter’s opposition to Extelcom’s rehabilitation plan.
TDE is in talks with San Miguel Corp. (SMC) for the sale of the former’s stake in Extelcom. However, Marifil Holdings, which is majority-owned by Bayantel, has said TDE’s stake in Extelcom was illegally acquired. Marifil also claims that the dilution of its stake in Extelcom from 46 percent to only five percent was illegal.
TDE said Bayantel’s motion is pro forma since it is but a mere reiteration of the reasons and arguments in previous pleadings which have already been considered and junked by the court.
In its comment filed with the CA opposing Bayantel’s motion for reconsideration, TDE pointed out that Bayantel’s claim that Extelcom’s rehabilitation plan which called for a debt-to-equity conversion is not valid because it had not been approved by two thirds of shareholders is not applicable since the approval is needed only in a debtor-initiated corporate rehabilitation. Extelcom’s rehabilitation was creditor-initiated, it said.
It emphasized that to require shareholder approval would have, in effect, given shareholders veto power over the rehabilitation plan when it is unable or unwilling to pay its debts. “This is why creditor-initiated petitions require only a rehabilitation plan, a list of nominees for rehabilitation receiver and a sworn statement that the petition is based on correct information,” TDE noted.
While Bayantel is now disputing the shareholder advances by Millicom Cellular, TDE said minutes of various Extelcom shareholder and board meetings show that Bayantel proxies and board representatives had actively participated in passing resolutions approving the said advances.
TDE also reiterated that there was no abuse of discretion on the part of the rehabilitation court and the rehabilitation receiver had not violated his fiduciary duties.
It noted that the rehabilitation court was not required to inform Bayantel directly of the proceedings since it had complied with the requirement that a notice to all parties was published in a newspaper of general circulation and it is not credible that Bayantel was ignorant of the proceedings.