MANILA, Philippines - Permanent Plans Inc., a pre-need firm owned by the Madrigal-Vazquez family, is hoping to get a new lease on life with the filing of a petition for rehabilitation with the local court.
The company’s petition, filed last May 21, has been given due course by the Makati Regional Trial Court after finding it to be sufficient in form and substance.
Makati RTC Judge Joselito Villarosa issued an order last week, suspending the enforcement of all claims against Permanent Plans and preventing the pre-need firm from selling or transferring in any manner any of its properties except in the ordinary course of business.
The order also effectively enjoined Permaplans from making any payment of its liabilities outstanding as of May 21.
Juan Miguel Madrigal Vazquez said the rehabilitation was intended to ensure that all planholders will get the full amount due them, albeit in an alternative deferred settlement mode in order to conserve the present asset inventory of its trust fund.
“We wish to assure you that you will be paid and we remain committed to the ideals of being of service to you,“ Vazquez said as he explained that the company’s move to seek court intervention was precipitated by the freezing by the Securities and Exchange Commission of its trust fund assets.
“Permaplans was put in a state of paralysis. We have to protect our trust fund; we cannot sell securities and cannot even settle claims all leading to our decision to file for corporate rehabilitation,” Vazquez said.
Vazquez said the SEC’s suspension of Permaplans’ license to sell resulted in a run and even greater demand for withdrawals.
Based on its audited financial statements as of end-December 2008, Permanent Plans had current assets of P35 million as against liabilities of P62.13 million. It also had a trust fund deficiency of P253.89 million.
Under Permaplans’ proposed rehabilitation plan, the payment of claims shall be according to a deferred payment plan wherein outstanding obligations will earn interest for the benefit of the planholder during the period of deferment. Those who wish to receive their termination or plan value immediately (instead of upon maturity) upon approval of the rehabilitation plan, will get the same pursuant to the contract terms in cash and assets as of April 30, 2009 value date.
The Makati RTC has appointed Fernando Mate Jr. as rehabilitation receiver for Permaplans and directed all of the pre-need firm’s creditors and interested parties, including the SEC to file their respective comments or opposition not later than 10 days before the date of the initial hearing, which was set on July 27 at 8:30 a.m.
Permaplans legal counsel Alberto II Borbon Reyes said 1,700 out of the firm’s total 10,000 to 11,000 planholders agreed to avail themselves of the payment scheme offered by the company.
Reyes said the company’s objective is to be able to regain its license to sell life plans.