Case Digest # VII-1 |GR No.

160073 | Barayoga v Asset Privatization Trust

| Panganiban
FACTS:
Asset Privatization Trust (APT) is a public trust whose mandate is to provisionally manage and dispose of non-performing assets of the
government. When former President Aquino issued AO No. 14, which identified certain assets of government institutions that were to be
transferred to the National government, among those transferred assets were the financial claim of PNB against Bicolandia Sugar Development
Corp. (BISUDECO) in a form of a secured loan. BISUDECO is a sugar plantation mill located in Camarines Sur. Consequently, APT was
constituted as trustee over BISUDECO’s account with PNB by virtue of a trust agreement between the government and APT.
In August 1988, BISUDECO contacted the services of Philippine Sugar Corp (Philsucor) to take over management of the sugar plantation and
milling operation until August 1992. And because of the continued failure of BISUDECO to pay its outstanding loan with PNB, its mortgage
properties were foreclosed and subsequently sold in a public auction to APT. In July 1992, APT accepted the offer of Bicol-Agro-Industrial Coop
(BAPCI) to buy the sugar plantation and mill. And in the event of the company’s privatization, ATP authorized the payment of separation
benefit’s to BISUDECO’s employees. Then BAPCI purchased the foreclosed assets of BISUDECO and took over its sugar milling operations
under the trade name Peñafrancia Sugar Mill (Pensumil).