CIPI creditors work on liquidation plan

Creditors of Corporate Investments Philippines Inc. (CIPI) are working on a liquidation plan for the debt-strapped investment house to facilitate the orderly distribution of its assets.

An official of the Securities and Exchange Commission said the newly-appointed liquidator for CIPI is now conducting several meetings with some major creditors of the investment house to facilitate the preparation of the mandatory liquidation plan to be submitted to the Pasig Regional Trial Court.

CIPI filed for suspension of payments in 1999 after failing to service debts of over P867 million. Of this amount, P128.4 million is owed to creditor-banks.

The SEC turned over to the RTC the CIPI case and other cases involving petition for suspension of debt payment or rehabilitation and intra-corporate disputes after losing its quasi-judicial functions in 1999.

CIPI’s petition for rehabilitation, however, was denied by the RTC, forcing it to file for voluntary insolvency. This caught the ire of CIPI investors, saying the company can still be rehabilitated as its assets still exceeded its liabilities.

Shareholders of CIPI include the San Miguel Retirement Fund with 30 percent, the Coca-Cola Retirement Fund with 30 percent, the Archdiocese of Cebu with 20 percent, Aton Atillano, former president of CIPI, 20 percent.

The San Miguel Retirement Fund had reportedly bought P71 million in "non-existent commercial papers from officers of the the debt-saddled investment house.

Other entities that were reportedly duped by CIPI included exclusive schools and churches.

Holders of the debt instruments are demanding payment. But CIPI has been unable to service the demands for pre-termination or termination of the investments due to lack of funds since its petitioned for debt moratorium.

CIPI blamed its financial woes to the nationwide economic slowdown of 1998 and 1999, which caused a significant decrease in the demand for financial services.

In its proposed rehabilitation plan, CIPI said it would implement a more directed effort in collecting its receivables and aggressively foreclose on loan collateral securing past due receivables and dispose available assets for conversion to cash. – Zinnia dela Peña