THE ex-officio chairman of the Land Bank of the Philippines (LandBank) and Finance Secretary Carlos G. Dominguez III flagged the delay in the resolution of pending rehabilitation and insolvency cases, prompting the Supreme Court (SC) to remind Regional Trial Courts (RTCs) designated as special commercial courts to stick to the time limit set by law.
Dominguez informed the Office of the Court Administrator (OCA) about commercial cases that have remained pending in the lower courts without any approved rehabilitation plans for more than a year, which is already beyond the maximum period set by Republic Act 10142.
Under Section 72 of the law, also called the Financial Rehabilitation and Insolvency Act of 2010, the court shall have a maximum period of one year from the date of filing of the petition to confirm a rehabilitation plan. If no rehabilitation plan is confirmed within the said period, the proceedings may upon motion or motu propio, be converted into one for the liquidation of the debtor.
In a letter to Court Administrator Jose Midas P. Marquez, Dominguez said LandBank is a creditor-party in numerous rehabilitation and insolvency proceedings “where there appears to be a questionable trend of unwarranted delay and/or circumvention of court proceedings.”
In some cases, debtors have resorted to unscrupulously filing petitions for rehabilitation or insolvency “for the sole purpose of absconding from their obligations while protecting their assets without genuine intention of rehabilitating businesses or settling obligations,” Dominguez said in his letter.
“Further, case records where the LandBank is a creditor-party suggest that some case proceedings may have been deliberately delayed,” he added.
Dominguez also pointed out that “the delay in the resolution of rehabilitation cases and the failure of the courts to observe the mandated period to resolve these cases defeat the purpose of RA 10142 of ensuring a timely, fair, transparent, effective and efficient rehabilitation or liquidation of debtors.”
Thus, Dominguez urged the High Tribunal to “ensure that courts comply with their mandate” in resolving cases involving rehabilitation, insolvency and liquidation proceedings, among other related commercial disputes.
In response to Dominguez’s appeal, the SC “strongly reminded” RTCs to act without delay in acting on rehabilitation, insolvency and other related commercial cases pending before their respective salas.
Under Circular 105-2021 issued by the OCA, the high tribunal said judges of RTCs designated as “special commercial courts” should follow the time limit set in deciding commercial cases.
In the circular, Marquez warned judges that “failure to decide cases and other matters within the reglementary period constitutes gross inefficiency and warrants the imposition of administrative sanctions against the erring magistrate” as stated in the SC ruling on Gallego v. Doronila. He also urged them to “remain in full control of the proceedings in [their] sala” and “adopt a firm policy against improvident postponements.”