• Bank ordered to return P236M in loan repayments

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    AFTER discovering that the financial obligation had already been settled in an agreement in the United States (US), the Makati City Regional Trial Court (RTC) has ordered the Standard Chartered Bank (SCB) to return the P236 million in loan repayments it received from a Makati-based investment firm.

    Judge Cesar Untalan of the Makati RTC Branch 149 granted the urgent motion filed by the Philippine Investment Two Inc. (SPV-AMC) and Metrobank and Trust Co. directing the SCB to return the payments it had already received from PI Two under the company’s rehabilitation plan.

    In an 11-page decision issued on August 30, Untalan said the Standard Chartered Bank’s claims against PI Two in this rehabilitation proceedings is now deemed excluded.

    “Standard Chartered Bank is ordered to return the amounts it already received under the Rehabilitation Plan in the sum of P233,629,672.88 to PI Two,” Untalan said in his decision.

    SCB and the Metrobank Bank and Trust Co. were both creditors of PI Two, the former unit of the defunct US investment firm Lehman Brothers Holdings Inc. (LBHI).

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

    It appointed former Securities and Exchange Commission (SEC) Chair Monico Jacob as the rehabilitation receiver to oversee the December 2009 rehabilitation plan for the cash-strapped firm.

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

    Metrobank and PI Two filed urgent motions on March upon learning that SCB’s parent in New York and LBHI had already agreed on a global settlement that included SCB’s exposure in PI Two.

    The amicable settlement between both parties was approved by LBHI’s New York Bankruptcy Court on January.

    Given the New York settlement, PI Two and Metrobank argued that allowing SCB to continue collecting from PI Two’s rehabilitation proceedings would constitute double payment in favor of SCB, to the detriment of the company and its other creditors.

    PI Two officials earlier this year filed criminal cases for perjury and other deceits against SCB officials with the Office of the City Prosecutor in Makati.

    They claimed that SCB had deliberately withheld information about the New York settlement from the rehabilitation court.

    In its complaints, PI Two alleged that SCB also concealed that it had received some $90 million in 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 two cases have since been transferred to the Department of Justice for resolution after a petition by SCB’s lawyers.

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