SY CHIM vs. SY SIY HO& SONS INC.

Facts:
The Sy Siy Ho & Sons, Inc. is a domestic corporation engaged primarily in importing,
buying and selling hardware, machineries, spare parts, supplies and other allied
products and merchandise to be sold exclusively on wholesale basis. It was doing
business under the name and style Guan Yiac Hardware. The corporation was owned
and controlled by SyChim and his children. An intra-corporate dispute ensued. SyChim
filed “Motion for the Appointment of a Management Committee”. Asking the Court that
the control and management of the corporation must be transferred pendente lite to an
independent party to ensure the preservation of the corporate assets. The RTC granted
the Motion of SyChim and appointed Wencita C. Salvador as comptroller tasked to
oversee the maintenance of corporate books of accounts, budget administration,
internal control on disbursements, reporting and interpretation of financial statements,
tax administration, protection of assets, financial evaluation and government reporting. 

Issue:
Whether or not the “Appointment of a Management Committee” was valid.

Ruling:
No, petitioners failed to show an imminent danger of disposition, loss, wastage, or
destruction of assets or other properties of a corporation and paralysis of its business
operations. Section 1, Rule 9 of the Interim Rules provides: Sec 1. Creation of a
management committee. – As an incident to any of the cases filed under these Rules or
the Interim Rules on Corporate Rehabilitation, a party may apply for the appointment of
a management committee for the corporation, partnership or association, when there is
imminent danger of: (1) Dissipation, loss, wastage or destruction of assets or other
properties; and (2) Paralyzation of its business operations which may be prejudicial to
the interest of the minority stockholders, parties-litigants or the general public. The two
requisites should be present before a management committee may be created and a
receiver appointed by the RTC.