PLANHOLDERS of the padlocked College Assurance Plan (CAP) Inc. would have to wait a little longer as the Supreme Court stopped the implementation of the Court of Appeal’s decision that affirmed the three-year extension and modification of the rehabilitation plan of the company.
In a two-page resolution, the Supreme Court’s 2nd Division issued a temporary restraining order enjoining the implementation of the Court of Appeal’s 4th Division decision dated June 18, 2014.
The High Court acted on the petition for review on certiorari filed by the Securities and Exchange Commission (SEC) and Insurance Commission (IC).
The High Court also ordered CAP to answer the petition within ten days.
The appellate court earlier ruled in favor of the September 5, 2013 order of the Makati Regional Trial Court Branch 149 which granted the request of CAP to extend its rehabilitation period for three years and to implement their 2012 Revised Rehabilitation Plan.
However, the High Court has decided to issue TRO against the assailed CA’s ruling as it appears that “the implementation of the revised rehabilitation plan will not only cause irreparable and serious damage to the plan holders who petitioners are seeking to protect, but will likewise undermine the authority of petitioner Insurance Commission (IC) over CAP Pension.”
The Makati court, in its order, has approved the extension of the rehabilitation of CAP as well as the implementation of its 2012 revised rehabilitation plan as it considered CAP’s projection that with the implementation of the modified plan.
Under it every plan holder would receive at least 50% of his gross contract price and that the redevelopment projects would provide recurring revenues for distribution to its plan holders while at the same time preventing the depletion of CAP’s/Trust Fund’s pool of assets.
The extension and modification of the rehabilitation plan was sought by CAP after a developer expressed interest to redevelop their idle real-estate properties into mixed-use commercial-residential condominium projects.
However, the SEC and IC are not in favor with the redevelopment project because it will involve properties owned by CAP Pension, which is a separate and distinct corporation.
They also pointed out that the modified rehabilitation plan is speculative and may be prejudicial to the interest of the plan holders.
But according to the appellate court, though some of the properties of CAP Pension will be included in the redevelopment project, it is not enough ground to disapprove the request for extension and modification of the rehabilitation plan.