PDIC files P1.8-B claim vs LBC courier group
The LBC courier group led by the Araneta family has been slapped with a P1.8-billion claim by the state-owned Philippine Deposit Insurance Corp. (PDIC) on behalf of defunct banking affiliate LBC Development Bank over alleged unpaid service fees.
The Regional Trial Court of Makati branch 143 has issued a writ of preliminary attachment against parties including parent company LBC Development Corp. and subsidiary LBC Express Inc. in relation to a civil case for the collection of money, LBC Express Holdings Inc. said in a disclosure to the Philippine Stock Exchange on Monday.
“Whether or not the claims against LBC Express Inc. and/or LBC Development Corp. are successfully proven, there can be no assurance that these claims will not cause business interruptions or reputational harm to LBC Express Holdings Inc. and may ultimately have a material adverse effect on its financial performance and prospects,” the disclosure said.
Trading on shares of LBC, which entered the stock market through backdoor-listing last year, was halted at the local stock exchange from 9 a.m. to 10 a.m. on Monday after the disclosure on the legal proceedings was posted.
At the end of the trading session, shares were down by 1 percent to close at P11.88 a share, giving LBC Express a market capitalization of P17.11 billion.
The writ of preliminary attachment directs the sheriff of the court to attach real and personal properties of any of the defendants sufficient to satisfy the plaintiff’s claim and costs of suit, unless the defendants provide security to satisfy any final judgment in the case.
“Said writ is a provisional remedy and thus remains pending the final outcome of the legal action instituted. In the event that the court finds against the defendants by final judgment, the properties attached by virtue of the writ shall be used to answer for any sum of money awarded by the said court in the said civil case,” the disclosure said.
The Bangko Sentral ng Pilipinas ordered the closure of LBC Bank in 2011, citing huge advances to LBC Express as part of the reason why the thrift bank had become insolvent.
The cash advances allowed LBC to speed up the delivery of remittances but some of the cash advances had remained unpaid, causing financial burden to the bank, based on earlier reports quoting BSP Deputy Governor Nestor Espenilla Jr.
The PDIC, as the mandated receiver of the defunct bank, is thus now running after such “unpaid service fees” estimated at P1.8 billion.
Other defendants in this civil case are LBC Properties Inc., Juan Carlos Araneta, Santiago Araneta, Fernando Araneta, Monica Araneta, Carlos Araneta, Ma. Eliza Berenguer, Ofelia Cuevas, Apolonia Ilio, Joseph Jeffrey Rodriguez and Arlan Jurado.
The disclosure said the summons and the writ of preliminary attachment had been issued on Dec. 28. As of Monday, LBC Development Corp. and LBC Express had yet to file their respective replies to the complaint.
LBC Express and LBC Development are currently “determining and assessing the various options and legal remedies available,” adding that any disclosure “should not be taken as an admission” by any of the defendants of the validity or propriety of the service of the summons and/or the writ of preliminary attachment or the summons and/or the writ in itself.
LBC Express currently holds the bulk of all the daily cargo space allocation of carriers Philippine Airlines and Cebu Pacific. It was the first to introduce 24-hour air service delivery in the country.
In terms of distribution capability, it has over a thousand branches in the Philippines and over 60 branches in the United States, Canada plus smaller countries.
