467

NORTH DAVAO MINING CORPORATION VS. NLRC

254 SCRA 721
CLOSURE OF ESTABLISHMENT AND REDUCTION OF
PERSONNEL
FACTS:
Petitioner North Davao Mining Corporation (North Davao) was
incorporated in 1974 as a 100% privately-owned company. Later,
the Philippine National Bank (PNB) became part owner thereof as a
result of a conversion into equity of a portion of loans obtained by
North Davao from said bank. On May 31, 1992, petitioner North
Davao completely ceased operations due to serious business
reverses. When it ceased operations, its remaining employees were
separated and given the equivalent of 12.5 days pay for every year
of service, computed on their basic monthly pay, in addition to the
commutation to cash of their unused vacation and sick leaves.
Respondent Wilfredo Guillema is one among several employees of
North Davao who were separated by reason of the companys
closure. Subsequently, a complaint was filed with respondent labor
arbiter by respondent Wilfredo Guillema and 271 other seperated
employees for: (1) additional separation pay of 17.5 days for every
year of service; (2) back wages equivalent to two days a month; (3)
transportation allowance; (4) hazard pay; (5) housing allowance; (6)
food allowance; (7) post-employment medical clearance; and (8)
future medical allowance, all of which amounted to P58,022,878.31
as computed by private respondent.
ISSUE:
Whether or not a company which is forced by huge business losses
to close its business, legally required to pay separation benefits to its
employees at the time of its closure
RULING:
NO. Art. 283 governs the grant of seperation benefits in case of
closures or cessation of operation of business establishments NOT
due to serious business losses or financial reverses x x x. Where,
however, the closure was due to business losses - as in the instant
case, in which the aggregate losses amounted to over P20 billion -
the Labor Code does not impose any obligation upon the employer
to pay separation benefits, however, the companys practice of giving
one months pay for every year of service could no longer be
continued precisely because the company could not afford it
anymore.
WHEREFORE, judgment is hereby rendered MODIFYING the
assailed Resolution by SETTING ASIDE and deleting the award for
additional separation pay of 17.5 days for every year of service,
and AFFIRMING it in all other aspects. No costs.

468.
Cama vs. Jonis food food services inc.
425 scra 259
CLOSURE OF ESTABLISHMENT AND REDUCTION OF
PERSONNEL
Facts:
Respondent Jonis Food Services, Inc., (hereafter JFSI) is a
corporation duly organized and operated in accordance with
Philippine laws engaged in the coffee shop and restaurant business,
with several branches or outlets.
Petitioners were employees of JFSI having been hired on
various dates. The financial records of the company showed that
JFSI incurred a total net loss of P2,541,537.70 as of December 31,
1998. As a result, JFSI shut down more outlets, leaving it with just
three operating outlets at the end of 1998 out of 8 outlets. However,
One month before the target closure date of its remaining outlets,
JFSI sent notices of closure to the Department of Labor and
Employment (DOLE) and to the complainants who were then
employed in the remaining branches or outlets.
Petitioners filed a complaint for illegal dismissal, separation pay,
service incentive leave pay, 13
th
month pay, attorneys fees,
remittance of SSS and Pag-Ibig contributions, and refund of excess
withholding taxes against JFSI.
Both the Labor Arbiter and the NLRC ruled that the losses were not
so severe as to prevent the respondent from paying separation pay
to the petitioners. The Court of Appeals ruled to the contrary.

ISSUE:
WHETHER OR NOT HEREIN PETITIONERS ARE ENTITLED TO
SEPARATION PAY

HELD:
NO. It was pronounced that since the closure was due to serious
losses duly proven by clear evidence, the employees affected were
not entitled to separation pay. In this case, the supreme court to
determine the veracity of the claim of the company that it has
suffered extreme losses, scrutinized the balance sheets and income
statements by using such basic accounting tools as the working
capital ratio. Accordingly, it concluded that indeed, the company was
suffering from serious losses and therefore trhe employer is not
obligated to pay separation benefits.


469.

Industrial Timber Corporation v. Ababon:

480 SCRA 171

CLOSURE OF ESTABLISHMENT AND REDUCTION OF
PERSONNEL
FACTS:

Industrial Plywood Group Corporation (IPGC) is the owner of
a plywood plant located in Butuan City, leased to Industrial Timber
Corporation (ITC) on August 30, 1985 for a period of five years.
Thereafter, ITC commenced operation of the plywood plant and hired
387 workers (94 are petitioners). ITC notified its employees and the
DOLE of the no plant operation on March 16, 1990 due to lack of
raw materials. This was followed by a shut down notice dated June
26, 1990 due to the expiration of the anti-pollution permit. However,
this shutdown was only temporary as ITC assured its employees that
they could return to work once the renewal is acted upon by the
DENR. On August 17, 1990, the ITC sent its employees a final
notice of closure or cessation of business operations to take effect
on the same day it was released. On October 15, 1990, IPGC took
over the plywood plant after it was issued a Wood Processing Plant
Permit which included the anti-pollution permit, by the Department of
Environment and Natural Resources (DENR) coincidentally on the
same day the ITC ceased operation of the plant. This prompted
Virgilio Ababon, et al. to file a complaint against ITC and IPGC for
illegal dismissal, unfair labor practice and damages.

ISSUE:
Whether or not Ababon, et al. were illegally dismissed due to the
closure of ITCs business and whether they are entitled to separation
pay, backwages, and other monetary awards

HELD:
No they are not illegally dismissed but are entitled to separation pay
with additional P50,000.00 as nominal damages

In these consolidated cases, the SC find that ITCs closure or
cessation of business was done in good faith and for valid reasons.
The records reveal that the decision to permanently close business
operations was arrived at after a suspension of operation for several
months precipitated by lack of raw materials used for milling
operations, the expiration of the anti-pollution permit in April 1990,
and the termination of the lease contract with IPGC in August 1990
over the plywood plant in Butuan City. The SC upheld the
management prerogative to close the plant as the only remedy
available in order to prevent imminent heavy losses on account of
high production costs, erratic supply of raw materials, depressed
prices and poor market conditions for its wood products. But still,
they are entitled to separation pay equivalent to one month pay or at
least one-half month pay for every year of service, whichever is
higher. However, although the closure was done in good faith and for
valid reasons, ITC did not comply with the notice requirement. While
an employer is under no obligation to conduct hearings before
effecting termination of employment due to authorized cause,
however, the law requires that it must notify the DOLE and its
employees at least one month before the intended date of closure.
So the SC deem it wise and reasonable to award P50,000.00 to
each employee as nominal damages.

under Article 283 of the Labor Code, three requirements are
necessary for a valid cessation of business operations: (a) service of
a written notice to the employees and to the DOLE at least one
month before the intended date thereof; (b) the cessation of business
must be bona fide in character; and (c) payment to the employees of
termination pay amounting to one month pay or at least one-half
month pay for every year of service, whichever is higher.



470.

ABAPO et al. v. CA and SAN MIGUEL CORPORATION

439 SCRA 593

INSTALLATION OF LABOR HIRING DEVICE

FACTS:
The petitioners are former employees of private respondent San
Miguel Corporation (SMC) who were hired on different dates and
assigned to SMCs Mandaue Brewery Plant. Respondent then SMC
brought into the Mandaue plant high-speed machines to be used in
the manufacture of its beer. These machines were installed in
bottling lines 6 and 7. The main line operation known as lines 1, 2,
3, 4, and 5 ceased to operate. As a consequence, several functions
of the employees were declared redundant.

On February 13, 1992, SMC sent to Office of Region VII,
Department of Labor and Employment (DOLE), two letters with the
information that it was terminating the services of the employees
named in the attached list. SMC also sent notices to the affected
employees informing them that they would be given a separation pay
amounting to 175% of their respective monthly salaries for every
year of service, a 3-year free hospitalization coverage, and free
training and consultation for livelihood programs and small-scale
business enterprises, as well as assistance in local and overseas job
placements. Accordingly, the employees concerned received the
said amounts and executed their respective quitclaims before the
Officers of Region VII of the DOLE.
Two years later, those employees filed with the Labor Arbiter two
separate complaints, alleging that SMC did not institute a
modernization program, hence, the company committed an illegal
mass lay-off. They prayed that their separation from the service be
declared illegal and that they be paid their backwages, separation
pay in lieu of reinstatement, and other benefits.

ISSUE:
Whether or Not the installation of labor-saving devices by SMC was
a proper ground for terminating employment

HELD:
Yes.The installation of labor-saving devices by SMC at the Mandaue
plant was a proper ground for terminating employment. The
quitclaims and releases, signed by the employees concerned as
reasonable settlements, are binding upon the parties

The law authorizes an employer to terminate the employment of
any employee due to the installation of labor saving devices. The
installation of these devices is a management prerogative, and the
courts will not interfere with its exercise in the absence of abuse of
discretion, arbitrariness, or maliciousness on the part of
management. The installation of labor-saving devices contemplates
the installation of machinery to effect economy and efficiency in the
method of production.







471.
DUSIT HOTEL NIKKO V. NUWHRAIN
466 SCRA 374
REDUNDANCY
Facts:

The PHI owned and operated the Dusit Hotel Nikko. Since
March 1, 1984, Rowena Agoncillo was employed by the Hotel. After
some time, she was promoted as Supervisor of Outlet Cashiers and
later promoted as Senior Front Office Cashier, with a monthly salary
of P14,600.00, inclusive of service charge.
[3]
In January 1995, the
Hotel decided to trim down the number of its employees from the
original count of 820 to 750. On February 21, 1996, the Hotel,
through an Inter-Office Memorandum signed by the general manager
of Dusit, Yoshikazu Masuda, offered a Special Early Retirement
Program (SERP) to all its employees. It was stated therein that the
program was intended to provide employees financial benefits prior
to prolonged renovation period and, at the same time, to enable
management to streamline the organization by eliminating redundant
positions and having a more efficient and productive manpower
complement. On April 1, 1996, the Hotel wrote Regional Director
Romeo Young of the Department of Labor and Employment (DOLE),
National Capital Region, informing him that the Hotel terminated the
employment of 243 employees due to redundancy. On the same
day, Agoncillo was summoned by Hotel Comptroller Reynaldo
Casacop, who gave her a letter of even date informing the latter of
her separation from service due to redundancy effective close of
office hours of April 30, 1996.
[7]

Casacop advised Agoncillo to just avail of the Hotel's SERP, as
embodied in the inter-office memorandum of Masuda.
[8]
He informed
her that she had the option to avail of the program and that, in the
meantime, he will defer the processing of her termination papers to
give her time to decide. On April 3, 1996, Agoncillo finally told
Casacop that she would not avail of the SERP benefits. By then,
she had decided to file a complaint for illegal dismissal against the
Hotel.
ISSUE:
Whether or not terminating the employment services of
respondent is valid
HELD:
The termination is invalid. Redundancy exists when the service
capability of the workforce is in excess of what is reasonably needed
to meet the demands of the business enterprise. A reasonably
redundant position is one rendered superfluous by any number of
factors, such as overhiring of workers, decreased volume of
business, dropping of a particular product line previously
manufactured by the company or phasing out of service activity
priorly undertaken by the business. Among the requisites of a valid
redundancy program are: (1) the good faith of the employer in
abolishing the redundant position; and (2) fair and reasonable criteria
in ascertaining what positions are to be declared redundant and
accordingly abolished.
[33]
As found by the SOLE, the NLRC and the
CA, the position of respondent Agoncillo was not abolished or
declared redundant. In fact, the petitioners hired an entirely new set
of employees to perform the tasks of respondent Agoncillo,

472.

Smart Communications vs Astorga

542 scra 153

REDUNDANCY

FACTS:
Regina M. Astorga (Astorga) was employed by respondent Smart
Communications, Incorporated (SMART) on May 8, 1997 as district
Sales Manager of the Corporate Sales Marketing Group/ Fixed
Services Division (CSMG/FSD). As District Sales Manager, Astorga
enjoyed additional benefits, namely, annual performance incentive
equivalent to 30% of her annual gross salary, a group life and
hospitalization insurance coverage, and a car plan in the amount of
P455,000.00.

On May 18, 1998, SMART sent a letter to Astorga demanding that
she pay the current market value of the Honda Civic Sedan which
was given to her under the companys car plan program, or to
surrender the same to the company for proper disposition. Astorga,
however, failed and refused to do either, thus prompting SMART to
file a suit for replevin with the Regional Trial Court of Makati (RTC)
on August 10, 1998.

In February 1998, Since SNMI was formed to do the sales and
marketing work, SMART abolished the CSMG/FSD, Astorgas
division. SMART offered her a supervisory position in the Customer
Care Dept but she refused the offer. On March 3, 1998, SMART
issued a memorandum advising Astorga of the termination of her
employment on ground of redundancy, effective April 3, 1998.

Astorga claims that the termination of her employment was illegal
and tainted with bad faith. She asserts that the reorganization was
done in order to get rid of her. But except for her barefaced
allegation, no convincing evidence was offered to prove it.

ISSUE:
Whether the dismissal of Astorga be valid or illegal.

HELD:
Astorga is declared validly dismissed. Redundancy is a valid ground
for termination.

Astorga was terminated due to redundancy, which is one of the
authorized causes for the dismissal of an employee. Redundancy in
an employers personnel force necessarily or even ordinarily refers to
duplication of work. The characterization of an
employees services as superfluous or no longer necessary and,
therefore, properly terminable, is an exercise of business judgment
on the part of the employer. An employer is not precluded from
adopting a new policy conducive to a more economical and effective
management even if it is not experiencing economic reverses.
Neither does the law require that the employer should suffer financial
losses before he can terminate the services of the employee on the
ground of redundancy. But while tilting the scales of justice in favor
of workers, the fundamental law also guarantees the right of the
employer to reasonable returns for his investment. In this light, we
must acknowledge the prerogative of the employer to adopt such
measures as will promote greater efficiency, reduce overhead costs
and enhance prospects of economic gains, albeit always within the
framework of existing laws. However, SMART failed to comply with
the mandated one (1) month notice prior to termination. The record is
clear that Astorga received the notice of termination only on March
16, 1998 or less than a month prior to its effectively on April 3, 1998.
Likewise, the Department of Labor and Employment was notified of
the redundancy program only on March 6, 1998.

473

San Miguel Corporation VS. DEL ROASARIO
477 SCRA 604
REDUNDANCY

FACTS:
Respondent Caroline Del Rosario was employed by petitioner as key
account specialist. On March 9, 2001, petitioner informed
respondent that her probationary employment will be severed at the
close of the business hours of March 12, 2001. On March 13, 2001,
respondent was refused entry to petitioners premises. Respondent
filed a complaint against petitioner for illegal dismissal and
underpayment/non-payment of monetary benefits. Petitioner claimed
that respondent was a probationary employee whose services were
terminated as a result of the excess manpower that could no longer
be accommodated by the company. Respondent was allegedly
employed on April 17, 2000. as a temporary reliever of Patrick
Senen, an account specialist, who met an E. Her employment was
thus terminated effective March 12, 2001. Petitioner is invoking a
redundancy which allegedly resulted in the termination not only of
the trainees, probationers but also of some of its regular employees.
As evidence of presentation shows, the continuous
employment of respondent as an account specialist for almost 11
months, from April 17, 2000 to March 12, 2001, means that she was
a regular employee and not a temporary reliever or a probationary
employee.


ISSUE:
Whether or not respondent was illegally dismissed.

Held:
Yes. Petitioner erroneously classified respondent as a probationary
employee, resulting in the dismissal of the latter. Respondent
Caroline C. Del Rosario, was a regular employee of petitioner San
Miguel Corporation whose dismissal was valid but ineffectual for
non-compliance with the requirement of one month notice in
termination due to redundancy. The criteria in implementing a
redundancy are: (a) less preferred status, e.g. temporary employee;
(b) efficiency; and (c) seniority.

WHEREFORE, the employment status of respondent is declared
regular, and her dismissal from employment, illegal. Petitioner is
ordered to IMMEDIATELY REINSTATE respondent as a regular
employee to her previous position, unless such position no longer
exists, in which case she shall be given a substantially equivalent
position, without loss of seniority rights.

474.
MAYA FARMS vs. NATIONAL LABOR RELATIONS COMMISSION

239 SCRA 508

LIFO RULES

FACTS:
Private respondents Maya Farms, Inc. and Maya Realty and
Livestock Corporation belong to the Liberty Mills group of companies
whose undertakings include the operation of a meat processing plant
which produces ham, bacon, cold cuts, sausages and other meat
and poultry products. Petitioners, on the other hand, are the
exclusive bargaining agents of the employees of Maya Farms, Inc.
and the Maya Realty and Livestock Corporation.
On April 12, 1991, private respondents announced the adoption of
an early retirement program as a cost-cutting measure considering
that their business operations suffered major setbacks over the
years. The program was voluntary and could be availed of only by
employees with at least FIVE (5) years of service.

A total of sixty-nine
(69) employees from the two companies availed of the special
redundancy program. On January 17, 1992, the two companies sent
letters to sixty-six (66) employees informing them that their
respective positions had been declared redundant. The notices
likewise stated that their services would be terminated effective thirty
(30) days from receipt thereof.

a notice of strike was filed by the petitioners which accused private
respondents, among others, of unfair labor practice. In their position
paper, petitioners averred that in the dismissal of
sixty-six (66) union officers and members on the ground of
redundancy, private respondents circumvented the provisions in their
CBA, In their LIFO rule:
Sec. 2. LIFO RULE. In all cases of lay-off or retrenchment
resulting in termination of employment in the line of work, the Last-In-
First-Out (LIFO) Rule must always be strictly observed.

ISSUE:
Whether or Not Private respondents violated such CBA provision of
LIFO rule

HELD:
No. It is not disputed that the LIFO rule applies to termination
of employment in the line of work. Verily, what is
contemplated in the LIFO rule is that when there are two or
more employees occupying the same position in the
company affected by the retrenchment program, the last one
employed will necessarily be the first to go. several positions
were affected by the special involuntary redundancy
program. These are packers, egg sorters/stockers, drivers.
In the case of packers, prior to the involuntary redundancy
program, twenty-one employees occupied the position of
packers. Out of this number, only 5 were retained. In this
group of employees, the earliest date of employment was
October 27, 1969, and the latest packer was employed in
1989. The LIFO rule under the CBA is explicit. It is ordained
that in cases of retrenchment resulting in termination of
employment in line of work, the employee who was
employed on the latest date must be the first one to go. The
provision speaks of termination in the line of work. This
contemplates a situation where employees occupying the
same position in the company are to be affected by the
retrenchment program. Since there ought to be a reduction
in the number of personnel in such positions, the length of
service of each employees is the determining factor, such
that the employee who has a longer period of employment
will be retained.
475.
BONIFACIO ASUFRIN, JR. vs. SAN MIGUEL CORPORATION
425 scra 270
HOBSONS CHOICE
FACTS:
Coca Cola Plant, then a department of respondent San Miguel
Beer Corporation (SMC), hired petitioner as a utility/miscellaneous.
He became a regular employee paid on daily basis as a Forklift
Operator and became a monthly paid employee promoted as Stock
Clerk. Respondent SMC thereafter wrote a letter to petitioner
informing him that, owing to the implementation of the pre-selling
operations scheme, all positions of route and warehouse personnel
will be declared redundant and the Sum-ag Sales Office will be
closed effective April 30, 1996. The petitioner filed a complaint for
illegal dismissal against the respondent after it fails to include him
among the employees who signify their willingness to be absorbed
by the company after its announcement for retrenchment of their
workers on ground of redundancy. Apparently, respondent gave their
employees the choice to opt to avail of the early retirement package
they offer or for re-deployment to its other sales offices. The
petitioner chose to be absorbed but was included in the list among
those who want to avail of the retirement package. Despite his
manifestation of his willingness to be demoted to any position as
long as the company retain him for employment he was still
dismissed from work. The labor arbiter dismissed his complaint due
to lack of merit and on appeal the decision was set aside by the
NLRC which ordered respondent to reinstate petitioner with payment
of backwages. The respondent appealed to the CA which reversed
the decision of the NLRC and reinstated the judgment of the labor
arbiter. Thus, this petition before the SC.
ISSUE:
whether or not the dismissal of petitioner is based on a just and
authorized cause
HELD:
NO. Accordingly, petitioners dismissal is declared illegal, and
respondent is ordered to reinstate him to his former or equivalent
position, with full backwages computed from April 1, 1996 up to his
actual reinstatement. Citing the ruling on SMC v. NLRC: What was
the true nature of petitioners offer to private respondents? It was in
reality a Hobsons choice. All that the private respondents were
offered was a choice on the means or method of terminating their
services but never as to the status of their employment. In short, they
were never asked if they wanted to work for petitioner. In the case at
bar, petitioner is similarly situated. It bears stressing that whether it
be by redundancy or retrenchment or any of the other authorized
causes, no employee may be dismissed without observance of the
fundamentals of good faith. It is not difficult for employers to abolish
positions in the guise of a cost-cutting measure and we should not
be easily swayed by such schemes which all too often reduce to
near nothing what is left of the rubble of rights of our exploited
workers. Given the nature of petitioners job as a Warehouse
Checker, it is inconceivable that respondent could not accommodate
his services considering that the warehousing operations at Sum-ag
Sales Office has not shut down.




477.
ASIAN ALCOHOL V. NLRC
305 SCRA 416
RETRENCHMENT
FACTS:
In September, 1991, the Parsons family, who originally owned the
controlling stocks in Asian Alcohol, were driven by mounting
business losses to sell their majority rights to prior Holdings, Inc.
(hereinafter referred to as Prior Holdings). The next month, Prior
Holdings took over its management and operation. To thwart further
losses, Prior Holdings implemented a reorganizational plan and other
cost-saving measures. Some one hundred seventeen (117)
employees out of a total workforce of three hundred sixty (360) were
separated. The six (6) private respondents are among those union
members whose positions were abolished due to redundancy, they
filed with the NLRC, complaints for illegal dismissal with a prayer for
reinstatement with backwages, moral damages and attorneys
fees. They alleged that Asian Alcohol used the retrenchment
program as a subterfuge for the union busting. They claimed that
they were singled out for separation by reason for their active
participation in the union. They also asseverated that Asian Alcohol
was not bankrupt as it has engaged in an aggressive scheme of
contractual hiring.
Issue:
Whether or not the private respondents were illegally dismissed and
if Asian Alcohol faulted for retrenching private respondent on the
ground of mere possible future losses


Held:
No. The right of management to dismiss workers during periods of
business recession and to install labor saving devices to prevent
losses is governed by Art. 283 of the Labor Code, as amended.
Under Art. 283, retrenchment and redundancy are just causes for the
employer to terminate the services of workers to preserve the
viability of the business. In exercising its right, however,
management must faithfully comply with the substantive and
procedural requirements laid down law and jurisprudence. In the
instant case, private respondents never contested the veracity of the
audited financial documents proffered by Asian Alcohol before the
Executive Labor Arbiter. Neither did they object to their admissibility.
And on cases of retrenchment for possible future loss, It should be
observed that Article 283 of the Labor Code uses the phrase
retrenchment to prevent losses. In its ordinary connotation, this
phrase means that retrenchment must be undertaken by the
employer before losses are actually sustained. Interpreted of the law
to means that the employer need not keep all his employees until
after his losses shall have materialized. Otherwise, the law could be
vulnerable to attack as undue taking of property for the benefit of
another.
478.
CLARION PRINTING VS. NLRC
461 SCRA 272
RETRENCHMENT

FACTS:
Respondent Michelle Miclat (Miclat) was employed on April 21,
1997 on a probationary basis as marketing assistant. At the time of
her employment, she was not informed of the standards that would
qualify her as a regular employee. On September 16, 1997, the
EYCO Group of Companies of which CLARION formed part filed with
the Securities and Exchange Commission (SEC) a Petition for the
Declaration of Suspension of Payment, On October 22, 1997, the
Assistant Personnel Manager of CLARION informed Miclat by
telephone that her employment contract had been terminated
effective October 23, 1997. No reason was given for the termination.
The following day or on October 23, 1997, on reporting for work,
Miclat was informed by the General Sales Manager that her
termination was part of CLARIONs cost-cutting measures. On
November 17, 1997, Miclat filed a complaint
[6]
for illegal dismissal
against CLARION and Yutingco (petitioners) before the National
Labor Relations Commission (NLRC). Miclat contends that assuming
her termination is necessary, it was not done in a proper manner;
there was no notice that was given to her. On the other hand, Clarion
contends that they are not liable for retrenching some employees
because EYCO is being placed under receivership, and a
memorandum was given to employees, hence they substantially
complied with the notice requirement. NLRC rendered its decision in
favor of Miclat and found that she was illegally dismissed. On appeal,
the Court of Appeals held that Clarion failed to prove its ground for
retrenchment as well as compliance with the mandated procedure. It
further ruled that Miclat should be reinstated and paid backwages.

Issue: Whether or not Miclat was legally dismissed

Held: YES. for retrenchment to be justified, any claim of actual or
potential business losses must satisfy the following standards: (1)
the losses are substantial and not de minimis; (2) the losses are
actual or reasonably imminent; (3) the retrenchment is reasonably
necessary and is likely to be effective in preventing expected losses;
and (4) the alleged losses, if already incurred, or the expected
imminent losses sought to be forestalled, are proven by sufficient
and convincing evidence. From the provisions of P.D. No. 902-A, as
amended, the appointment of a receiver or management committee
by the SEC presupposes a finding that, inter alia, a company
possesses sufficient property to cover all its debts but "foresees the
impossibility of meeting them when they respectively fall due" and
"there is imminent danger of dissipation, loss, wastage or destruction
of assets of other properties or paralization of business operations.