Citibank vs. Urban Development Bank

[SEC CASE NO. 3002. November 16, 1987.] IN RE: PETITION WITH APPOINTMENT OF REHABILITATION RECEIVER FOR REYNOLDS PHILIPPINE CORPORATION PURSUANT TO P.D. 902-A AS AMENDED CITIBANK, N.A. ET AL. , petitioners , vs . URBAN DEVELOPMENT BANK , oppositor . O R D E R Before this Commission is the Motion to Withdraw Funds in Escrow and to order Reynolds Philippine Corporation to remit funds under Special Account, filed by State, on September 21, 1987; and upon consideration thereof, this commission finds the Motion tenable subject to certain equitable qualification. IaTSED As per certification made by Reynolds Philippine Corporation's Treasurer and Comptroller, Mr. Gonzalo A. Mendoza, dated 1 August 1986, it shows that Reynolds Philippine Corporation (Reyphil) has made some collections on the receivables assigned to State Investment House, Inc. (State) in the total amount of P3,528,233.48 as of 15 July 1986. Subject amount is presently deposited by Reyphil under a special account. Insofar as State is concerned, it is admitted that State has also collected receivables assigned by Reyphil to it in the sum of P2,567,518.46. State, by virtue of the Orders, dated June 23, and October 24, 1986, seeks that Reyphil remits the amount of P3,528,233.48 to State and said amount to be included in the receivables collected by State under escrow. Reyphil, for its part, objects thereto for reason that, if allowed, the sum total of the receivables to be placed with State under escrow will amount to P6,105,825.87, the same as a consequence, being over and above the principal amount due from Reyphil to State which is allegedly P3,052,960.00. Thus, Reyphil, in effect, is willing to remit only P485,441.54. The Commission, however, finds that the principal amount (excluding the interest) actually due from Reyphil to State is P4,389,361.87. consequently, out of the P3,528,233.48, Reyphil has to remit to State the amount of P1,821,843.41. ETDHSa As regards the matter of withdrawal of funds in escrow with FEBTC, considering the present financial predicament of State and it being under rehabilitation too, this Commission finds an imperative necessity of granting the prayer. WHEREFORE, this Commission hereby orders Reyphil to remit to State the amount only P1,821,843.41, which is part of the total collection by Reyphil on the original receivables as of July 15, 1986. Such amount may be used by State for its rehabilitation. Further, the State is hereby allowed to withdraw the funds with FEBTC under Escrow Account No. E-86-016, amounting to P2,567,518.46. All other receivables/monies shall remain with their respective accounts. TaDAHE This resolution renders moot and academic the pending "Motion for Clarification of Order of June 23, 1986, as amplified by Order of October 27, 1986" filed by Reyphil, on September 21, 1987. SO ORDERED. (SGD.) EMMANUEL R. SISON Hearing Officer (SGD.) JAMES K. ABUGAN ROLANDO MALABONGA Hearing Officer Hearing Officer (on leave)