MANILA - The Court of Appeals (CA) has affirmed the decision issued by the Regional Trial Court (RTC) in Makati City allowing a three-year extension and modification of the rehabilitation plan of cash-strapped preneed firm College Assurance Plan Philippines Inc. (CAP).
In a seven-page decision penned by Associate Justice Amelita Tolentino, the Court’s Fourth Division denied the petition for review filed by the Securities and Exchange Commission (SEC) and the Insurance Commission (IC) seeking the nullification of the Makati RTC’s approval of CAP’s 2012 revised rehabilitation plan.
CAP sought the extension and modification of its rehabilitation plan after a developer expressed interest to redevelop the preneed firm’s idle real-estate properties into mixed-use commercial-residential condominium projects.
The appellate court did not give merit to the claim of both the SEC and the IC that the revised rehabilitation plan was incomplete because the name of the developer that showed interest to develop CAP’s properties was concealed.
The SEC and the IC also described the revised rehabilitation plan as speculative considering the economic and business climate in the areas where the said properties are located.
The petitioning regulatory bodies noted that some of the properties CAP claimed are in the provinces.
Likewise, the SEC and the IC rejected CAP’s revised rehabilitation plan on the ground that some of the properties included in the redevelopment project were owned by CAP Pension, which is a separate business entity altogether.
The IC placed CAP Pension under conservatorship on September 13, 2010.
Still, the CA held that the modification of CAP’s rehabilitation plan cannot be set aside due to the failure of the petitioners to show grave abuse on the part of the trial court.
The CA gave credence to the manifestation of court-designated rehabilitation receiver Mamerto Marcelo, who endorsed the extension and modification sought by CAP of its approve rehabilitation plan.
“Having been directly and closely involved in the rehabilitation of CAP for already quite sometime, the court a quo cannot be faulted if it opted to adopt the recommendation of the rehabilitation receiver,” according to the CA.
“Being appointed by the court, and thus considered as an officer of the court, it is only appropriate that the suggestion of the rehabilitation receiver should be given weight and credence by the court,” it added.
The CA also stressed that the Makati RTC did not merely rely on the recommendations of Marcelo but also did its own assessment and evaluation of the contentions of the parties.
It added both the SEC and the IC failed to show evidence that the properties of CAP Pension were enough to affect the projections of the developer with respect to CAP’s rehabilitation should the properties be excluded from the project.
“The fact that there are properties owned by CAP Pension which are included in the proposed redevelopment project of respondent CAP is not sufficient ground for the disapproval of the request for extension or modification of the rehabilitation plan, which is poised to benefit the plan holders,” the CA said.
The Supreme Court approved in 2009 the corporate rehabilitation of CAP, which suffered financial difficulties in 2005, prompting plan holders to terminate their contracts and demand the return of their money.