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MANILA – The Court of Appeals has turned down Philippine National Bank’s bid to set aside the stay order issued in 2004 by the Pasig regional trial court hearing Bayan Telecommunications Inc.’s rehabilitation.
In a 34-page order penned by Associate Justice Amelita Tolentino and promulgated on May 23, 2012, the CA said the rehabilitation court’s stay order on Bayan’s assets didn’t impair PNB’s status as a secured creditor.
Citing Presidential Decree 902-A, the CA said the pari passu principle didn’t impair the rights of secured creditors.
“PNB’s preferred status over the unsecured creditors is retained but the enforcement of such preference is suspended pending the rehab and in the event of bankruptcy and consequent dissolution of Bayan, PNB can still enforce its preferred claim upon the debtor company,” the CA ruling read.
Bayan owes its creditors P33.32 billion. Under its rehab plan, P8.11 billion in accrued interest would be converted into a 28 percent stake in the Lopez-owned telco. The P25.21 billion in principal amount would be restructured through a new debt instrument payable over 15 years.
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