CAP Takeover

SEC's plans for CAP put on hold
Elizabeth L. Sanchez
Inquirer News Service

THE CREATION of a management committee that will take over the troubled pre-need firm College Assurance Plan Philippines Inc. may be put on hold after the company filed for rehabilitation with a local court last week.

An official of the Securities and Exchange Commission said however that CAP's rehabilitation plan would not prevent the SEC from exercising its regulatory powers such as imposing sanctions on the company for perceived violations.

CAP earlier told the Makati Regional Trial Court that there was a need for the immediate suspension of payment of all claims against the company.

CAP officials explained that they decided to go to court to keep its business going. They said that this was the only way they could discharge their obligations to their plan holders.

CAP officials also said that they were forced to make the legal turn when the SEC threat to take over management became imminent.

CAP officials are afraid that the takeover will lead to the liquidation of the pre-need firm.

"In deference to the proceedings in court, we may [hold off] the appointment of a management committee," SEC commission secretary Gerard Lukban said. "Any effort on our part may be rendered academic."

Lukban explained that once a company filed for rehabilitation, the court would usually appoint a receiver to implement the rehabilitation plan.

"The receiver is also appointed to safeguard the assets ... of creditors or, in this case, the plan holders," Lukban said. "This is the same goal we want to achieve if and when we create a management committee."

CAP has admitted that it will be unable to service its debts falling due. CAP also said that it has more liabilities than assets.

CAP has proposed under an eight-year business development plan to build up its capital to P8.36 billion, and its trust fund to P14.36 billion.