determine the best way to salvage and protect the interest of its investors and creditors; and (5) study, review and evaluate the proposed rehabilitation plan forRUBY.
Subsequently, two (2) rehabilitation plans were submitted to the SEC: the BENHAR/RUBYRehabilitation Plan of themajoritystockholdersled by Yu Kim Giang, and the Alternative Plan of the minoritystockholdersrepresented by Miguel Lim (Lim).Under the BENHAR/RUBYPlan, Benhar International, Inc. (BENHAR) — a domestic corporation engaged in the importation and sale of vehicle spare parts which is wholly owned by the Yu family and headed by Henry Yu, who is also a director andmajoritystockholder ofRUBY— shall lend its P60 million credit line in China Bank toRUBY, payable within ten (10) years. Moreover, BENHAR shall purchase the credits ofRUBY's creditors and mortgageRUBY's properties to obtain credit facilities forRUBY. Upon approval of the rehabilitation plan, BENHAR shall control and manageRUBY's operations. For its service, BENHAR shall receive a management fee equivalent to 7.5% ofRUBY's net sales.TECIHDThe BENHAR/RUBYPlan was opposed by 40% of thestockholders, including Lim, a minority shareholder ofRUBY. ALFC, the biggest unsecured creditor ofRUBYand chairman of the management committee, also objected to the plan as it would transferRUBY's assets beyond the reach and to the prejudice of its unsecured creditors.On the other hand, the Alternative Plan ofRUBY's minoritystockholdersproposed to: (1) pay allRUBY's creditors without securing any bank loan; (2) run and operateRUBYwithout charging management fees; (3) buy-out themajorityshares or sell their shares to themajoritystockholders; (4) rehabilitateRUBY's two plants; and (5) secure a loan at 25% interest, as against the 28% interest charged in the loan under the BENHAR/RUBYPlan.Both plans were endorsed by the SEC to the MANCOM for evaluation.On October 28, 1988, the SEC Hearing Panel approved the BENHAR/RUBYPlan. The minoritystockholdersthru Lim appealed to the SECEn Bancwhich, in its November 15, 1988 Order, enjoined the implementation of the BENHAR/RUBYPlan. On December 20, 1988 after the expiration of the temporary restraining order (TRO), the SECEn Bancgranted the writ of preliminary injunction against the enforcement of the BENHAR/RUBYPlan. BENHAR, Henry Yu,RUBYand Yu Kim Giang questioned the issuance of the writ in their petition filed in the Court of Appeals (CA), docketed as CA-G.R. SP No. 16798. The CA denied their appeal.2Upon elevation to this Court(G.R. No. L-88311), we issued a minute resolution dated February 28, 1990 denying the petition and upholding the injunction against the implementation of the BENHAR/RUBYPlan.Meanwhile, BENHAR paid off Far East Bank & Trust Company (FEBTC), one ofRUBY's secured creditors.
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Corporation, Supreme Court of the United States, Appellate court