Makati court orders bank: Return P233 M to investment firm

MANILA, Philippines - A Makati regional trial court (RTC) has ordered an international bank to return P233.6 million it received from an investment firm as loan repayments after it was discovered that the loan had been settled in an agreement in New York.

In an Aug. 30 resolution, Judge Cesar Untalan directed Standard Chartered Bank (SCB) to return the payments it received from Philippine Investment Two (PI Two), granting a petition filed by Metropolitan Bank and Trust Co.

Both SCB and Metrobank were creditors of PI Two, a unit of the defunct US investment firm Lehman Brothers Holdings, Inc. (LBHI).

After LBHI filed for bankruptcy in New York in 2008, the Makati RTC Branch 149 under Untalan became the rehabilitation court to ensure payment of PI Two’s debts to creditors.

Untalan appointed former Securities and Exchange Commission chairman Monico Jacob as the rehabilitation receiver to oversee the rehabilitation plan for the firm.

In his Aug. 30 order, Untalan also removed SCB’s standing as a creditor to be paid under PI Two’s rehabilitation plan and ordered the release from escrow of P34.5 million in loan payments previously earmarked for the bank.

Double payment

Untalan issued the order after Metrobank and PI Two filed urgent motions last March upon discovering that SCB’s parent company in New York and LBHI had already agreed on a global settlement that included SCB’s loan to PI Two. The settlement was approved by the New York bankruptcy court in January.

The petitioners said that given the New York settlement, allowing SCB to continue collecting from PI Two’s rehabilitation proceedings would constitute double payment in favor of the bank.

Claiming that SCB deliberately withheld information about the New York settlement from the rehabilitation court, PI Two officials earlier this year filed criminal cases for perjury and other deceits against SCB officials with the Makati prosecutor’s office.

PI Two said in its complaints that SCB also concealed that it had received some $90 million worth of collateral for the P819 million it loaned PI Two. SCB and LBHI reached a settlement based on this hidden collateral, with SCB returning some of it back to LBHI.

The PI Two cases have since been transferred to the Department of Justice for resolution after a petition by SCB’s lawyers.

Last Sept. 4, Jacob wrote Yeong Chun Hei of SCB’s Special Assets Management Group to seek the speedy turnover of the P233.6 million.

Under corporate rehabilitation proceedings, receiver court rulings are immediately executory.