In The Matter of The Dissolution of The Bataan Manila Ferry Services, Inc.

[SEC-SICD * CASE NO. 2973. September 25, 1990.] IN THE MATTER OF THE DISSOLUTION OF THE BATAAN MANILA FERRY SERVICES, INC., RAMON M. ZOSA, ET AL. , petitioners . D E C I S I O N This treats of the petition for dissolution of Bataan-Manila Ferry Services, Inc. In support thereof, it was alleged that at the meeting of the stockholders on April 1, 1986, the dissolution of said corporation was resolved by the affirmative vote of the stockholders holding or representing at least two-thirds (2/3) of all the shares of stock issued or subscribed; that if the corporation will continue its operation, it will result in very serious financial losses and it will be unable to pay all just demands against it, without a reasonable security to those who deal with it due to serious business reverses; that a schedule of the present claims and demands against the corporation is attached to the petition so that the creditors and other interested parties may be given an opportunity to present their objection; that from the foregoing, it becomes necessary to invoke the jurisdiction of this Commission under P.D. 902-A and Section 119 of the Corporation Code to direct the manner in which the liquidation of the corporate assets should be made. The National Investment and Development Corporation (hereinafter referred to for brevity as NIDC),thru counsel, filed its opposition and supplemental opposition thereto, alleging, among others, that this Commission has not acquired jurisdiction to try and decide the petition and the petition is injurious to the interest of NIDC, and is nothing but an attempt to escape payment of the corporation's huge obligations. In its opposition, herein NIDC argued that while the Commission deemed it proper to require in its order of June 2, 1986 the publication of the Order for three (3) consecutive weeks in a newspaper of general circulation published in the Municipality or City where the principal office of the corporation is situated, this Commission, however, failed to require in the same Order that a similar copy thereof be posted for three (3) consecutive weeks in three (3) public places in the Municipality or City where the corporation's principal office is situated. Moreover, oppositor NIDC intimated that the corporation owes the total sum of P30,011,260.51 as of April 30, 1986; that the dissolution of the herein petitioner corporation will be injurious to the oppositor because its assets are not enough to satisfy its unpaid and outstanding obligations of P30,011,260.51. Furthermore, the mortgaged properties of the petitioner corporation were auctioned off pursuant to NIDC's petition for the extra-judicial foreclosure thereof on June 17 and July 14, 1986; that at these auction sales the mortgaged properties of the corporation were sold in the total amount of P1,393,000.00; that the aforementioned proceeds were credited to the corporation's account with NIDC in the amount of P29,817,000.00 thereby leaving the huge amount of P28,418,000.00 still unpaid and outstanding; that the only way NIDC can recover the foregoing indebtedness is to institute a civil action for deficiency against the corporation within the prescribed period of ten (10) years from date of default; that if the dissolution will be granted, then NIDC cannot recover the foregoing amount anymore. Hearings were conducted and the petitioner corporation presented and offered its evidence. We have considered the opposition filed by oppositor NIDC to the instant petition for dissolution. From the evidence on record, it was clearly established that the basic requirements needed for voluntary dissolution provided for by the statute, particularly Section 119 of the Corporation Code had been complied with, including the posting in three (3) public places in the municipality. The statute, it will be noted, imposes no condition upon the power of the holders of two thirds of the outstanding capital stock to dissolve the corporation. Jurisprudence is replete with rulings to the effect that some sufficient grounds must exist before the courts will declare the forfeiture of a corporate charter. From the facts narrated in the petition and the evidence on record, we find sufficient basis to warrant the dissolution of petitioner corporation. As told, the corporation has totally stopped its business operations, and admittedly all its mortgaged properties were auctioned off in favor of oppositor NIDC by virtue of the extra-judicial foreclosure (Exhibit "E").Moreover, the entire assets of petitioner corporation is now owned by oppositor NIDC. Thus, we are now impelled by an extreme sense of urgency to give ample protection for the best interest not only of the corporation and stockholders but also other creditors. WHEREFORE, judgment is hereby rendered dissolving the Bataan Manila Ferry Services, Inc. pursuant to Section 119 of the Corporation Code Accordingly, the petitioner corporation is hereby directed to appoint a Receiver to collect such assets and pay just debts of the corporation. Let copy of the Decision be furnished the Records Division, Administrative and Finance Department for inclusion in the corporate file. LibLex SO ORDERED. (SGD.) ENRIQUE L. FLORES, JR. Hearing Officer