TRO sought vs Mango Square Operations

CEBU, Philippines - If one complainant is to be believed, the people currently behind the Mango Square Mall along Gen. Maxilom Ave. in Cebu City have no right or authority to operate the business.

Kelly Luym, stockholder of Ludo and Luym Development Corporation (Ludodev) told the court in a hearing yesterday that the corporate life of Ludodev expired in 2006 yet.

Kelly, along with his brother, Paterno Luym, Jr. who is also a stockholder of Ludodev, filed a case for injunction, accounting, and damages against Johnson Eric, Timothy Ryan and John Luym, who are all board of trustees of Ludodev.

Kelly and Paterno sought the issuance of a temporary restraining order (TRO) and writ of preliminary injunction to stop the three from doing business transactions in relation to Ludodev, which is operating Mango Square.

“Although the corporate life of Ludodev expired on September 2006, the defendants have continued to operate its business until date, for their own benefit, gain and advantage,” read the complaint filed before the Regional Trial Court.

The case was first raffled off to Branch 23 and later on to Branch 7, but Judge Generosa Labra and Simeon Dumdum inhibited themselves from the case.

Branch 16, presided over by Judge Sylva Paderanga, is now handling the case.

In their complaint, Kelly and Paterno Luym stressed that the three were appointed as board of trustees but they do not have the right to continue operating the business.

But John Luym, through his counsel Dax Maloney Montealegre, filed an opposition.

For John, Kelly and Paterno failed to establish that they have a “clear legal right that needs to be protected” through the issuance of a TRO and writ of preliminary injunction.

John claimed that what they are doing are “stop-gap measures designed to preserve or enhance the value of the properties of the corporation, and thus eventually benefiting all the stockholders pending the final dissolution and liquidation of Ludodev.”

As trustees, John said, they continue to pay the taxes on the properties of Ludodev and honor the obligations contracted prior to the expiration of their corporate term.

“While it is true that the corporate life of Ludodev has expired, the reality remains that there are transactions and other contractual commitments that have to be honored beyond that expiration period. Ludodev cannot just simply drop dead,” John stated in his opposition.

But according to Kelly and Paterno, the corporate life of Ludodev expired on September 26, 2006 and under the law, the corporation ceased to exist as a juridical entity and could not continue operating its business.

Under section 122 of the Corporation Code, a corporation whose charter expires cannot continue the business for which it was established. — THE FREEMAN