PPI has agreed to negotiate in the next 15 to 30 days a possible settlement with its clients to avoid a long-drawn legal tussle.
PPI president Ernesto Garcia said while the company expressed satisfaction over the recent breakthrough to solve various issues affecting PPI and its policyholders, there is still a lot of work to be done.
"We wish to reiterate that parties to this collaborative exercise at casting an alternative scheme have been explicit in their joint statement that the above is subject to further study and that the particulars thereof, once formulated and agreed upon, will be made known by the joint study team", Garcia said.
With this new development, the SEC might drop its opposition to the petition for rehabilitation filed by PPI with the local court, said an SEC official who requested not to be named.
In its comment filed with the court, the SEC said "there is no necessity for Pacific Plans to undergo corporate rehabilitation and that the said petition was merely resorted to by the company to evade its contractual liability to planholders."
The SEC cited the financial statements submitted by PPI which showed that the pre-need firm is solvent and liquid. As of end-2004, PPI even exceeded its trust fund liquidity reserve requirement by P3.77 billion," the SEC said.
PPI management and planholders said they have agreed to revisit the planholders’ entitlements particular to PPI’s traditional educational offerings under the company’s proposed rehabilitation plan before the Makati Regional Trial Court with the end-view of casting an alternative formula which shall be presented to the court for its consideration and approval.
The alternative formula as agreed will essentially place the availing and non-availing planholders on equal footing in that entitlements for both availing and non-availing planholders shall be based on current value.
Availing planholders shall receive an entitlement for unavailed years based on the tuition for school year 2005-2006.
Non-availing planholders, on the other hand, shall receive an entitlement based on the current average tuition per category of schools as of school year 2005-2006.
The schedule of payments and the attendant instrumentation, once the entitlements have been determined, will be the subject of further study and negotiations as this would have to be accommodated by the orderly disposition of the covering assets under trust specific to these traditional educational plans and the operating performance of PPI during the rehabilitation period.