In its opposition, PEPCI said the license application should also be denied since Pacific Plans was found to have been guilty of fraud in its transactions prior to and in connection with its dealings which resulted to the filing of the petition for rehabilitation in the court.
The Makati Regional Trial Court has issued an order prohibiting Pacific Plans from making any payment of its liabilities as of April 7 and selling any of its properties or assets except in the ordinary course of business.
"Considering that the rehabilitation proceedings have not yet been terminated nor the petition for rehabilitation dismissed, the stay order continues to be in full force and effect and effectively suspends any and all claims that may be brought against Pacific Plans," PEPCI said.
PEPCI said granting Pacific Plans’ application for registration would be to the disadvantage of the pre-need firm’s shareholders.
"The purchaser/planholder will not be able to claim the benefits on the plans sold to him since Pacific Plans is contrained to withhold payment of benefits to them by virtue of the stay order issued by the trial court," PEPCI said.
"There would be no use in granting Pacific Plans’ application for registration when, in the end, the planholder will not be able to claim benefits due to the trial court’s stay order.
Clearly, the SEC, as the administrative body with supervision over pre-need companies, has an obligation to protect the public from being prejudiced by such representations," PEPCI said.
PEPCI said given the SEC’s finding of fraud in Pacific Plans’ transactions, the commission is duty bound to properly protect the public from further prejudice and injury. It said the SEC, before it grants PEPCI’s application for registration, must provide for clear and specific guidelines on the disbursement and control of the premiums to be paid by the new planholders.
The SEC said there is no need for Pacific Plans to undergo corporate rehabilitation as its financial statements show it is solvent and liquid.
According to the SEC, Pacific Plans had a total networth of P657.84 million and P119.08 million as of end-December 2004 and March 31, 2005, respectively.
The SEC noted that it was because of Pacific Plans’ healthy financial condition that it agreed to the pre-need firm’s proposal for the spin-off of its pension, education and memorial businesses into a separate company called Lifetime Plans Inc.
The SEC likewise pointed out that Pacific Plans filed the petition without allowing the regulator to institute remedies to ensure the protection of both the corporation and its planholders.
Moreover, the SEC accused Pacific Plans of submitting a different set of figures in its audited financial statements as of May 31, 2004 to the Bureau of Internal Revenue.
Pacific Plans sought debt reprieve as it foresees the impossibility of meeting future claims of its over 34,000 planholders owing to rising tuition costs.
Pacific Plans stopped selling open-ended educational plans in 1992, realizing that it would be a matter of time before the gap between tuition and its income would affect it the way it does now.