Legacy group files petition with SEC for voluntary dissolution

The Legacy group of companies, facing serious liquidity problems, has filed a petition for voluntary dissolution with the Securities and Exchange Commission after shutting down its offices in Makati and Quezon City.

The group comprises pre-need firm Legacy Consolidated Plans Inc., Legacy Card Inc., One Realty Corp., Galacy Realty and Holdings Inc., Legacy Consolidated Asset Holdings Inc., Fusion Capital Corp., Conventional Realty Corp., Shining Armour Property Inc., Legacy Motors Inc. and Scholarship Plan Phils. Inc.

In its petition, the Legacy Group invoked Sec. 119 of the Corporation Code which states that “where the dissolution of the corporation may prejudice the rights of any creditor, a petition for dissolution of a corporation shall be filed with the SEC.”

The petition shall be signed by a majority of its board of directors or trustees or other officers having the management of its affairs, verified by its president or secretary or one of its directors or trustees and shall set forth all claims and demands against it, and that its dissolution was resolved upon by the affirmative vote of the stockholders’ representing at least two-thirds of the members.

SEC spokesperson Gerard Lukban said the SEC’s job is to assure that the Legacy Group’s assets will be distributed in an orderly manner. “We can’t force them to continue operating. We will provide a procedure for the liquidation of their assets. We need to know how much their total liabilities are,” he said.

Lukban said the group ceased operations in Dec. 8 without notifying the SEC. 

But he refused to comment on whether the SEC is also looking at filing administrative charges against the group. He said, however, that planholders of Legacy Plans can file cases against the troubled firm.

The Legacy Group was earlier reported to have allegedly entered questionable activities including pyramiding, to lure depositors and clients to part with their hard-earned money. It reportedly offered returns of as high as 30 percent per annum on huge deposits.

In its petition, Legacy Plans said it is currently insolvent because its assets are no longer enough to cover its liabilities amounting to P1.06 billion. 

It blamed the inhospitable and bleak market conditions as reasons for the decline in its investments.

“The management of Legacy Plans has come to the determination that the continued operation of the petitioner is no longer viable and will only result in more losses to the greater prejudice of all its stockholders,” Legacy Plans said.

Legacy Plans has appointed former SEC associate commissioner Danilo Concepcion as its liquidator.

Lukban said the Office of the General Counsel will set a hearing to discuss the orderly liquidation of the Legacy Group’s assets.

Legacy’s pre-need business started in 1997 when businessman Celso de los Angeles Jr. acquired Scholarship Plans Philippines Inc. (SPPI) and Legacy Plans Inc. (renamed Legacy Scholarship Pension Plans Inc. in 2000). Under new management, product innovations and aggressive marketing campaigns were implemented. In 1998, the company was granted permit to sell P1 billion worth of pension securities.

Legacy ranked 18th in 1999 and soared to 9th place in 2000 among the pre-need companies in terms of gross sales. In 2002, Legacy ranked 10th in terms of gross sales and second in terms of sales growth with a 519 percent increase in sales from the previous year.

Legacy expanded its institutional tie-ups with the military and teachers institution, a strategy which allowed it to penetrate a market of some 700,000 salaried military and public school teachers who were able to purchase education and pension plans thru salary deduction.

Continuing with its thrust and commitment to provide financial services, Legacy in 2002 acquired two other pre-need companies, All Asia Plans Inc. and Consolidated Plans Inc. The acquisition resulted to a broader market share with a wider client base.

Responding to the opportunities amidst the challenges and crisis besetting the pre-need industry in 2003, Legacy Scholarship Pension Plans and Consolidated Plans merged into Legacy Consolidated Plans Inc. The merger resulted to a paid-up capital of P198 million and an asset base of P3.6 billion.

The group eventually diversified into other segments of the financial services sector as it saw opportunities in motor and credit card industry, and thus founded Legacy Motors Inc. and Legacy Card Inc.

Legacy Motors Inc.offers automobiles and motorcycles to clients which are paid from the earnings of their deposits with the banks. Legacy Card thru its tie-up with Equitable Card Network Inc. and Japan Credit Bureau offered pre-need and bank clients with credit cards access to cash, products and services without touching their savings. Credit Plus Inc., a Hong Kong company, was also formed to operate money lending business to Filipino overseas workers.