Creditors ask SEC to appoint liquidator for Eyco group

Creditors of the EYCO Group of Companies, the parent firm to bankrupt appliance maker Nikon Industrial Corp., are urging the Securities and Exchange Commission (SEC) to immediately appoint a liquidator to stop the unauthorized disbursement of company funds.

Led by the Philippine National Bank (PNB) the creditors expressed apprehension that while the SEC disapproved EYCO's petition for suspension of debt payments along with its rehabilitation plan in an order dated Sept. 14, 1999, the conservator committee which ceased to exist along with the order, continues to dispose substantial assets of the company.

The creditors have filed an urgent motion to appoint a liquidator that will have the sole authority to oversee the disposal of the company's assets and order payments of all debts.

The banks said that under the new rules on corporate recovery which took effect last Jan. 15, the SEC is required to name a liquidator for EYCO. They added that the hearing panel tasked by the SEC to undertake the liquidation and dissolution of the company, was divested of its power and authority when the new rules took effect.

"The reason for this is that the dissolution of the EYCO Group and the liquidation of its assets fall squarely within the ambit of the liquidator's power and duties. With more reason, therefore, should a liquidator be appointed post haste by the SEC en banc."

Moreover, the new rules provide that the liquidator may be "the interim receiver, the rehabilitation receiver, or any other person who is in the practice of law, accounting or management, who has no conflict of interest as provided in Section 2-6 of these rules."

The banks recommended that the liquidator be selected from any of the independent private accounting firms, except the EYCO Group's external auditor.

The banks added that since the EYCO Group's motion for a writ of preliminary injunction or temporary restraining order has not been granted by the Court of Appeals, there is no legal obstacle for the SEC en banc or the liquidator it will appoint to "cause the execution of its order of dissolution and liquidation."

The creditors said the urgency of their motion is underscored by the fact that to date, no receiver or liquidator has been appointed during the pendency of the appeal with the Court of Appeals and while the SEC order last Sept. 14, 1999 has been implemented.

"At the very least, the appointment of a liquidator becomes urgent and essential to receive and preserve EYCO's assets. Otherwise, the interests of EYCO's creditors may unduly be prejudiced," the banks said.

The banks earlier wanted the SEC to execute a writ of execution that will enable them to enforce the regulatory body's order to start the liquidation of the company's assets.