Sunico, Ana Marie Q.

09 Task Performance 1

Merger and Acquisition

G.R. No. 195615 Bank Of Commerce, Petitioner, Vs. Radio Philippines Network, Inc., Intercontinental
Broadcasting Corporation, And Banahaw Broadcasting Corporation, Thru Board Of Administrator, And Sheriff
Bienvenido S. Reyes, Jr., Sheriff, Regional Trial Court Of Quezon City, Branch 98, Respondents. April 21, 2014

FACTS:

The Bank of Commerce was offered P10.4 billion by Traders Royal Bank to purchase its banking activity,
which comprises of particular assets and liabilities. The petitioner agreed, subject to the BSP's prior
approval of their Purchase and Assumption Agreement. The Bank of Commerce and Traders Royal was
required to establish a P50 million escrow fund with another bank to meet TRB's responsibilities for
potential future judgements against it that were not included in the purchase before the BSP agreed to
that arrangement on November 8, 2001. The BSP gave its approval to the arrangement between the two
banks. In order to cover the liabilities and claims not covered by the agreement, Traders Bank put $50
million in escrow with Metropolitan Bank and Trust Co. However, a lawsuit against Traders Royal for
damages reached the Supreme Court, which ruled in favor of the respondents, Radio Philippines
Network and other parties. In reaction to the decision, the respondents filed a motion for execution
against the traders with the RTC in Quezon City. Instead, they decided to carry out the execution,
referring to the Traders Royal as the "Bank of Commerce," to which the Bank of Commerce responded
with an opposition.

A RTC authorized and issued an execution writ against the Bank of Commerce after determining that the
agreement was a farce or "an instrument to achieve a merger and/or consolidation" of the parties. On
appeal, the CA maintained the trial court's decision but changed it to say that the judge's conclusion that
the agreement is a sham or merely a tool is unsupported by enough evidence. The Bank of Canada
demanded the annulment of the RTC's execution judgment based on the appeal court's findings, but the
latter dismissed the request. The CA denied the appeal because the necessary request for
reconsideration was not provided. consequently, the petition.

ISSUE:

Whether or not the Bank of Commerce and Traders Royal Bank consolidated or merged.

RULING:

No. Because the Corporation Code's prerequisites for a lawful merger were not met, there was no
merger.
The following processes for merger or consolidation are mandated by the Corporation Code:

(1) Each corporation's board develops a merger or consolidation plan. Any necessary amendments to
the surviving corporation's articles of incorporation or, in the case of consolidation, all the statements
mandated by a corporation's articles of incorporation must be included in the said plan.

(2) Plan submission for approval to each corporation's members or stockholders. A call for a meeting
must be made, and all stockholders or members must get at least two (2) weeks' notice either in person
or via registered mail. The announcement must include an overview of the plan. Voting requirements
include two-thirds of the members or stockholders who own two-thirds of the outstanding capital stock.
When appropriate, appraisal rights must be honored.

(3) The corporate executives of each member corporation signing the formal agreement, often known as
the articles of merger or consolidation. These replace the combined corporation's articles of
incorporation or change the surviving corporation's articles of organization.

(4) Submitting the aforementioned articles of merger or consolidation for approval to the SEC.

(5) If a hearing is required, the SEC will schedule one and give all affected corporations at least two
weeks' notice.

(6) Issuance of a merger or consolidation certificate. Since the conditions and processes for a merger
were not met, it is undeniably obvious that Ban commerce and TRB did not merge. A merger does not
take effect just because the constituent firms agree to it. A merger cannot go into effect until all the
conditions outlined in the legislation are met. 79 of the Corporation Article

Non-stock Corporation

G.R. No. 191109 Republic of the Philippines, Represented By the Philippine Reclamation Authority (PRA),
Petitioner, Vs. City Of Parañaque, Respondent. July 18, 2012

FACTS:

The Public Estates Authority (PEA) is a government corporation established in accordance with
Presidential Decree (P.D.) No. 1084 (Creating the Public Estates Authority, defining its Powers and
Functions, Providing Funds Therefor, and for Other Purposes), which took effect on February 4, 1977.
PEA was established to provide for the coordinated, affordable, and efficient reclamation of lands as
well as the administration and operation of lands owned by, managed by, and/or

On February 14, 1979, President Ferdinand Marcos' Executive Order (E.O.) No. 525 created the PEA as
the primary agency in charge of integrating, managing, and coordinating all reclamation initiatives for
and on behalf of the National Government.

E.O. was released on October 26, 2004, by the president at the time, Gloria Macapagal-Arroyo. The PEA
is transformed into the PRA by No. 380, which will take on all of the PEA's duties for reclamation works.
Due to its legal standing, PRA was able to regain parts of Paraaque City's coastline and offshore waters in
Manila Bay. The restored lands were then granted original certificates of title, including TCT Nos.
104628, 7312, 7309, 7311, 9685, and 9686.

On February 19, 2003, the then-Paraaque City Treasurer Liberato M. Carabeo (Carabeo) issued warrants
of levy on PRA's reclaimed properties in Paraaque City (the Central Business Park and Barangay San
Dionisio) in accordance with the assessment for unpaid real property taxes made by the then-Paraaque
City Assessor Soledad Medina Cue for the tax years 2001 and 2002.

ISSUES:

Win PRA does not include real property tax.

RULING:

Yes. The fundamental principle states that Congress may create GOCCs through special charters as long
as they satisfy two criteria: they must be created for the common good and they must be financially
viable. In this case, PRA may have satisfied the first need for the common good, but the second
requirement for economic viability did not. There is no doubt that PRA was not founded with business or
economic objectives in mind. Additionally, given the lack of other privately owned reclamation
enterprises, it was not founded to compete in the market. Since its principal duties comprised the
administration, management, and operation of government-owned properties with the aim of
optimizing their use and encouraging development that was in the public interest, PRA was effectively
founded to offer a public service, as was already indicated.