METROPOLITAN BANK AND TRUST COMPANY vs. LIBERTY CORRUGATED BOXES MANUFACTURING CORPORATION

FACTS: Liberty has filed a petition for rehabilitation. The rehabilitation plan consisted of debt moratorium, renewal of marketing efforts, resumption of operations, and entry into condominium development which is a new business. The Metro bank argued that Liberty was not qualified for corporate rehabilitation and that the rehabilitation plan by Liberty was defective and not feasible.

ISSUE: Whether or not Liberty may file a petition for rehabilitation.

HELD: Yes, a corporation with debts that have already matured may still file a petition for rehabilitation under the Interim Rules of Procedure on Corporation Rehabilitation. According to Rule 4 Section 1 of Interim Rules, Any debtor who foresees the impossibility of meeting its debts when they respectively fall due, or any creditor or creditors holding at least twenty-five percent (25%) of the debtor's total liabilities, may petition the proper Regional Trial Court to have the debtor placed under rehabilitation.

Applying the principle of noscitur a socii, a particular word or phrase is ambiguous in itself or is equally susceptible of various meanings, its correct construction may be made clear and specific by considering the company of words in which it is founded or which it is associated. In this case, the phrase "any debtor who foresees the impossibility of meeting its debts when they respectively fall due", need not refer to a specific period or point in time when the debts mature.