Court: PPI planholders have right over assets-A A +A
Tuesday, August 21, 2012
PLANHOLDERS have as much right to claim and share in the distribution of preneed company Permanent Plans Inc.'s remaining corporate assets to satisfy their unpaid claims from the liquidation of the firm’s trust fund.
Thus ruled the Court of Appeals when it granted the petition filed by the Securities and Exchange Commission (SEC) and the Insurance Commission (IC) on behalf of PPI planholders, seeking to scrap a provision in the Approved Liquidation Program of the cash-strapped preneed company, which disallowed policy holders to claim from its corporate assets.
In a decision penned by Associate Justice Marlene Gonzales-Sison, the CA's Sixth Division reversed the ruling dated March 11, 2011, by Judge Joselito Villarosa, of the Makati Regional Trial Court branch 66, which approved the proposed liquidation program of PPI.
The CA agreed with the contention of petitioners SEC and IC that the assailed provision in the liquidation program limiting to "non-plan holders" the remaining corporate assets of PPI is unjust and contrary to the provisions of the Financial Rehabilitation and Insolvency Act.
SEC and IC claimed that the planholders should be able to claim against the other corporate assets of the corporation in view of the fact that the trust fund assets of PPI are insufficient.
"We see no reason why the planholders cannot interpose their unsettled claims in the trust fund as ordinary credits. In fact, petitioners are not asking that the planholders should be treated as preferred creditors but rather, only as ordinary creditors who shall be able to claim pro-rata, after the respective preferred credits of the corporation have already been satisfied," the Court ruled.
The CA said the trial court erred in approving the liquidation plan in its entirety when it meant disenfranchising thousands of planholders from taking a share into the corporate assets of PPI, to the extent of the value of their claims, not fully paid from the liquidation of the PPI's Trust Fund.
The trust fund is an accumulation of assets sourced out from a certain percentage of the planholders' payments, which is separate from the pre-need corporation's paid-up capital, and the same if deposited to a trust account with a trustee bank to pay for the benefits under the pre-need plan in accordance with the provision of the Trust Agreement.
Citing Section 30 of the Pre-Need Code of the Philippines, the appellate court further turned down PPI’s argument that it would be unfair to allow the planholders to partake in its remaining corporate assets and bar the other creditors from claiming against the trust fund for the settlement of their credits.
The law states that the trust fund assets of a corporation are exclusively devoted to the planholders only. Section 52 of the same law also stated that only policyholders to claim against the trust fund of the insolvent corporation.
“Hence, the contention of private respondent that they are amenable to allow the planholders to claim against the corporate assets of the corporation provided that the other creditors would also be allowed to claim against the trust fund, cannot be given any merit. Such condition is without basis, and is in fact contrary to law," the CA held.
Concurring with the ruling were Associate Justices Hakim Abdulwahid and Edwin Sorongon. (JCV/Sunnex)