NSC v. TIPCO

NSC HOLDINGS, INC., petitioner vs. TRUST INTERNATIONAL PAPER CORPORATION AND ATTY. MONICO JACOB, respondents.
G.R. No. 193069
March 15, 2017

Facts:

On July 29, 2005, Trust International paper Corporation (TIPCO) filed a “Petition for Corporate Rehabilitation with Prayer for Suspension of Payments” before the RTC. The Trial Court subsequently issued a Stay Order directing the appointment of respondent Atty. Monico Jacob as the rehabilitation receiver (Receiver).

NSC filed its “Comment with Motion” alleging that certain receivables, as well as the authority to collect payments for these were being held by TIPCO for and on behalf of NSC. This was pursuant to the Trade Receivables Purchase and Sale Agreement (TRPSA) entered into by both parties. In light of the TRPSA, NSC claimed that it was a trustor, not a creditor of TIPCO. That these receivables would thereby be excluded from TIPCO’s list of assets and payables that would be subject to the rehabilitation plan.

On January 20, 2006, the Receiver submitted to the RTC his “Evaluation and Recommendation Report” (Report) which addressed NSC’s contentions. He stated that NSC was an unsecured creditor, and the receivables were covered by the rehabilitation plan.

The RTC in its First Order approved TIPCO’s proposed rehabilitation plan as amended and modified by the Recommendation and Evaluation Report. Unaware that the RTC had already approved the rehabilitation plan, NSC filed a motion for the suspension of the approval of the plan. In its Second Order, the RTC denied the motion for being a prohibited pleading. In its Third Order, the RTC agreed with the Receiver’s recommendation that the issues involved will need a full blown litigation and that it is not within the Rehabilitation Receiver to adjudicate and resolve said issues. Likewise, considering that the rehabilitation plan calls for the payment of the obligations to NSC the implementation of the rehabilitation plan shall not be suspended.

CA affirmed the Third Order in toto.

Issue:

Whether or not the NSC could still raise the issue of its inclusion as a creditor in the approved rehabilitation plan.

Held:

No. The SC agrees with the ruling of the CA that it was the First not the Third Order, that should have been appealed by the NSC; and the latter’s failure to appeal the First Order barred it from insisting that it be excluded from the rehabilitation plan as creditor.

The RTC in its First Order determined the NSC was a creditor whose claims must be paid in accordance with the approved rehabilitation plan. This makes it a final order with respect to that issue. Therefore, pursuant to the Interim Rules of Procedure on Corporate Rehabilitation (Interim Rules), petitioner should have ventilated its discontent with the First Order via a Rule 43 petition for review before the CA, and not a mere motion before the RTC.

Clearly, NSC availed of the wrong remedy and the issue on its inclusion as a creditor in the approved rehabilitation plan has already lapsed into finality.

Hence, the Supreme Court denied the petition, affirming the Court of Appeals decision and resolution.