Lifetime Plans seeks review of SEC order revoking its license

Lifetime Plans Inc. said the Securities and Exchange Commission (SEC) committed grave abuse of discretion when it canceled the certificate of incorporation of the Yuchengco-owned pre-need firm.

The revocation of Lifetime’s registration was allegedly due to the firm’s failure to comply with the requirements on transfer of property for shares to support its capitalization.

In its motion for reconsideration filed with the SEC, Lifetime said the order failed to sufficiently state and discuss the reasons for the revocation of the certificate of incorporation, leaving the company to merely speculate on the basis of the commission’s finding that its submissions were "insufficient."

Lifetime alleged that the SEC failed to comply with the requirements of due process, particularly the requirements of notice and hearing.

The company, however, stressed that it had sufficiently and timely complied with all the requirements of the SEC. "There is no factual basis whatsoever to the ruling that the documents submitted by Lifetime were still insufficient and no reason or basis to revoke the certificate of registration of Lifetime," the pre-need firm said.

Lifetime argued that its alleged failure to submit sufficient documentation is not even a ground expressly provided for by the Corporation Code to justify the revocation of the certificate of registration of a corporation. "At most, it is a minor (and surely a remediable) deficiency which does not warrant the ultimate penalty of revocation and dissolution," Lifetime said.

"While in its order dated May 24, 2005, the Honorable Commission found the documents submitted by Lifetime to be allegedly insufficient, it must be pointed out that Lifetime has in good faith, exerted all efforts to comply with the other requirements," the pre-need firm said.

In the same motion, Lifetime asked the SEC to take into consideration the "serious and far-reaching implications of the revocation of the corporate existence of Lifetime on its more than 14,000 sales agents and employees whose livelihood depend upon its continued existence."

SEC commission secretary Gerard Lukban, however, pointed out that the SEC allowed another Yuchengco-owned pre-need company Pacific Plans to spin off its pension, memorial and a portion of its educational plants in August last year to Lifetime Plans on the condition that Pacific Plans would submit proof that it transferred assets to Lifetime Plans.

In the same order, the SEC has directed Lifetime Plans‚ trustee banks Rizal Commercial Banking Corp., ING Bank N.V., and China Banking Corp. to preserve the trust fund of the pre-need firm until further orders.

With this order, it is expected that the assets of Lifetime Plans wll revert to Pacific Plans. Lukban said it’s all up to the court to decide what to do with Pacific Plans and Lifetime Plans.

The Yuchengco Group said the SEC decision may cast doubts on the rehabilitation of Pacific Plans. In view of this, Pacific Plans stopped making payments to its planholders until all issues brought about by the SEC order are cleared and resolved.

Prior to the SEC order, Pacific Plans had distributed P591 million in cash to planholders, P250 million of which came from the personal resources of former ambassador Alfonso Yuchengco, the patriarch of the Yuchengco Group of Companies.

Pacific Plans said it would provide a liquidity window of another P300 million to its traditional planholders’ should the court approve its rehabilitation plan.

Pacific Plans legal counsel Jeannette Tecson said the pre-need firm’s move to file for rehabilitation was not meant to defeat planholders’ claims but to ensure the expeditious and orderly payment of their claims.