Glasgow creditors back settlement offer

Creditors of Glasgow Credit and Collection Services Inc. recently expressed support for an offer of settlement submitted by the firm to the Securities and Exchange Commission (SEC) proposing the voluntary and permanent winding up of its operations after it has substantially paid up its loan obligations.

Glasgow president Manuel Roldan Jr. said the SEC has approved the offer "in principle." Earlier, the SEC asked the Anti-Money Laundering Council (AMLC) to unfreeze the funds of Glasgow in five banks, paving the way for the payment of close to P700 million to its creditors. Roldan said the payout is set to be completed by this month.

Glasgow became the first company to have been issued a cease-and-desist order (CDO) by the SEC in the wake of its crackdown on several investment firms to pay back its creditors. The CDO was issued in July last year following unverified allegations that the firm might have been involved in the sale of securities which was not allowed under the terms of its incorporation.

Glasgow, however, clarified that the contracts it executed with its creditors are not securities but loan documents that do not assume the nature of an investment.

Glasgow creditors led by Renzy Flores said the offer to settle "would avert further unnecessary litigation that would not benefit us." Glasgow creditors earlier cited the SEC move to unfreeze the company’s funds which allowed for the payment of the firm’s loans.

"We are happy that the SEC has helped us recover a major portion of our claims," the creditors said in a statement. This is very important considering that investors in boiler-room firms have yet to recover a single centavo from their so-called investments, they added.

Flores said the support by the SEC "allowed for a sober process resulting in our recovery of a significant portion of their principal, a welcome development the fate of investors in other schemes."

Flores pointed out that in Glasgow’s offer to settle, the firm committed to ensure that all its creditors have been duly paid before it closes down its operations.

Glasgow, however, said the offer to settle "does not in anyway mean an admission of guilt or liability." The firm pointed out that in contrast to other companies suspected of engaging in the so-called Ponzi scheme, Glasgow has not been remiss in the payment of its creditors, nor has it engaged in pyramiding.