Opinion No. 10-10 RE : Liquidation

~.C.{.'I.:...:.:•..• V~~ Republic of the Philippines SECURITIES AND EXCHANGE COMMISSION SEC Bldg. EDSA, Greenhills, Mandaluyong City OFFICE OF THE GENERAL COUNSEL 10 March 2010 SEC-OGCOpinion No. 10-10 Liquidation Chato & Vinzons-Chato Law Offices 8th Floor, Strata 2000, F. Ortigas, Jr. Road 1605 Ortigas Center, Pasig City AlTENTION: Atty. Wilfredo M. Chato Gentlemen: This refers to your letter dated 17 February 2010 requesting confirmation of your opinion that the surviving directors of Lopez Enterprises, Inc., a corporation whose charter expired on October 1986, continue to be trustees in liquidation. You now allege that, contrary to your earlier representations in your 22 December 2009 letter, Lopez Enterprises, Inc.'s directors and stockholders are all still alive. In the case of Clemente, et al VS. Court of Appeals, et al, 1 the Supreme Court held: . 1 G.R. No. 82407, March 27, 1995. SEC-0GC Opinion No. 10-05 Page I of 2

• •• 6\. •........ '.' 0',",",=:<_,.....J' "If the three-year extended life has expired without a trustee or receiver having been expressly designated by the corporation within that. period, the board of directors (or trustees) itself, following the rationale of the Supreme Court's decision in Gelano VS. Court of Appeals(103 SCRA 90) may be permitted to so continue as "trustees" by legal implication to complete the corporate liquidation. Still in the absence of a board of directors or trustees, those having any oecuniary interest in the assets, including not only the shareholders but likewise the creditors of the corporation, acting for and in its behalf, might make proper representations with the Securities and ExchangeCommission, which has primary and sufficiently broad jurisdiction in matters of this nature, for working out a final settlement of the corporate concerns.,,2 Accordingly, we opine that Lopez Enterprises, Inc.'s directors are permitted to continue as trustees in liquidation by legal implication to complete the corporate liquidation. However, this is subject to the right of a creditor or any interested party to petition for the appointment of a different liquidator should the directors fail to exercise their duties as liquidators within a reasonable period. This Opinion is rendered based solely on the facts and circumstances disclosed and relevant solely to the particular issues raised therein and shall not be used in the nature of a standing rule 'binding upon the Commission in other cases whether of similar or dissimilar circumstances. If, upon investigation, it will be disclosed that the facts relied upon are different, this opinion shall be rendered null and void. Please be guided accordingly. VERNElTE G. UMALI-PACO General Counsel 2 Underscoring ours, SEC-aGC Opinion No. I 0-05 Page 2 of 2