By Perfecto T. Raymundo Jr.
MANILA, Aug. 27 (PNA) — The Supreme Court (SC) has stopped the implementation of the three-year extension and modification of the rehabilitation plan of the cash-strapped pre-need company College Assurance Plan (CAP).
In a resolution released on Wednesday, the SC also ordered the CAP to comment on the petition filed by the Securities and Exchange Commission (SEC) and the Insurance Commission (IC) questioning the June 18, 2014 ruling of the Court of Appeals (CA).
In its June 18, 2014 decision, the CA upheld the ruling of the Makati City Regional Trial Court (RTC) in approving CAP’s 2012 revised rehabilitation plan.
The Makati City RTC approved the plan as it noted that if it pushed through, every plan holder would receive 50 percent of his/her gross contract price and better projection of the rehabilitation receiver of Php 0.10 to Php 0.12 of every peso of investment if CAP’s properties will be sold.
Likewise, the redevelopment projects would provide recurring revenues to the CAP for distribution to its plan holders and preventing the depletion of its trust fund’s pool of assets.
The CAP sought the extension and modification of its rehabilitation plan after a developer expressed interest to redevelop the pre-need company’s idle real estate properties into mixed-use commercial-residential condominium projects.
However, the SEC and the IC said that the redevelopment projects should not push through because some of the properties were owned by the CAP Pension, which is a separate business entity altogether.
The CA said that the SEC and the IC failed to show that the Makati City RTC abused its discretion in issuing the ruling.
This prompted the two government agencies to elevate the case to the SC.
“…It appearing that the implementation of the Revised Rehabilitation Plan will not only cause irreparable and serious damage to the plan holders who, petitioners (SEC and IC) are seeking to protect, but will likewise undermine the authority of petitioner Insurance Commission over CAP Pension, the Court resolves…to issue, effective immediately and continuing until further orders from this court, a temporary restraining order enjoining respondent (CAP) from implementing the assailed decision dated June 18, 2014,” the SC resolution said.
The CAP suffered financial difficulties in 2005 which prompted plan holders to terminate contracts and demand for the return of their money. (PNA)