In his recent order, RTC Branch 11 judge Silvestre Maamo Jr. said the motion to dismiss filed by Manuel Raterta was considered submitted to the court for resolution.
Raterta, who holds 36 percent of the shares of the now-closed hotel equal to worth P2.8 million said in his motion that the courts has no jurisdiction over the dissolution of the corporation because it is vested in the Securities and Exchange Commission, adding that corporations are governed by the Corporation Code of the Philippines.
He said the code states that a petition for dissolution should be filed with the Securities and Exchange Commission.
"Clearly, since jurisdiction over the present petition is vested in the Securities and Exchange Commission, it is proper for the honorable court to dismiss the petition for lack of jurisdiction," Raterta said.
He also said that hotel management's petition for declaration of insolvency violates the rules on voluntary dissolution of corporations and has no authority to file for such because it is not the decision of the majority of the stockholders.
Before the filing of petition, Raterta said that there should be a meeting of the stockholders and at least two-thirds of the stockholders should vote in favor of it. But he said there was no stockholders meeting, and the stockholders, except for Corazon Garwood, the chairman of the corporation, had no idea about the plans to dissolve the corporation. He said that on March 19, they had a stockholder's meeting attended by around 20 shareholders but neither Corazon Garwood nor corporation president Ruel Villanueva appeared in the meeting.
In response to Raterta's motion Garwood management said that the jurisdiction of the court to take cognizance of its petition to dismiss is beyond question because the Insolvency Law vests jurisdiction on the RTCs over petitions for voluntary insolvency.
Garwood management also clarified it was not Corazon Garwood who signed the petition for insolvency but Villanueva who signed the verification as endorsed by a board resolution, which is signed by the board of directors of the corporation.
Citing economic losses and bankruptcy, Garwood Hotel Corporation applied for permanent closure with the labor department early March and eventually ceased operation in the same month. It had allegedly incurred P16 million liabilities including the P3.1 million debt for the building lease.
Garwood Hotel Corporation bought the hotel, formerly Park Place Hotel five, years ago. Minority of the employees composes the corporation having invested 50 percent of their separation pay from the closed Park Place to Garwood just to maintain the hotel's operation.