A STITCH IN TIME: How Metro Shuttle won its Rehabilitation Plan

It’s not strange to hear companies reeling from the damaging pandemic. We have seen many of them–big or small–succumb to the ruthless wrath of the health crisis which not only claimed human lives but also took the life out of the economy.

Let’s take the curious case of Davao Metro Shuttle Corporation (DMSC) as a case in point.

The bus transport firm, one of Mindanao’s biggest fleet, filed for Rehabilitation Plan in 2021 after suffering from massive losses due to the pandemic.

DMSC won the case— a decision that was hailed not only by the company but also its employees, stakeholders and the transport industry in the region.

“We are happy that the court heard us and understood that we are here to serve the public through the transport requirements of the region and we are concerned with the welfare of our employees,” said Oyo Uy, president of DMSC.

Davao Metro Shuttle services one of the widest routes all over Mindanao. Recently, it launched the PITX-Davao route.

Lawyer Robert de Leon of The Law Office of Robert De Leon and Associates, counsel for the company, revealed in an interview with Edge Davao that his firm brought up the idea of Rehabilitation Plan with his deep background in corporate law practice. De Leon is familiar with the legal recourse for distressed companies having worked for the Philippine Airlines which went into Rehabilitation Plan in 1998.

At first, Davao Metro Shuttle’s owners, the Uy family of Tagum City, were hesitant to file for legal remedy but after considering the welfare of its employees and continuing the public transport service finally agreed to file the petition.

This started the ball rolling.

“We filed for the Rehabilitation Plan as a matter of recourse. Of course, we did not expect a lot but we we’re determined in trying than see the business go and people losing jobs,” said De Leon. “It’s a victory for distressed companies and for its employees.”

In sum, the Rehabilitation Plan will not only restore the financial stability of the transport business of the petitioner which is imbued with public interest but also the interest of the creditors as well since it would be beneficial to them as a whole.

The rehabilitation of DMSC would also benefit other stakeholders and families who are dependent to the company for their livelihood.

“The case provides us the full appreciation of Financial Rehabilitation and Insolvency Act. Distressed companies specially those who suffered during the pandemic can consider taking recourse from this law,” De Leon said.

“The FRIA law tells us that for companies imbued with public interest like Davao Metro Shuttle, it is better to rehabilitate than to liquidate,” De Leon stressed.

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