Garnishment of LBC assets starts
COURIER and remittance group LBC Express is bracing for administrative and operational challenges as the garnishment of its bank accounts started in line with a P1.8-billion collection claim filed by the state-controlled Philippine Deposit Insurance Corp. (PDIC).
The collection claim was filed by the PDIC on behalf of LBC Express’ defunct banking affiliate LBC Development Bank which shut down by banking regulators for insolvency in 2011. PDIC, as the mandated receiver of the bank, is running after what it claims as “unpaid service fees.”
The Regional Trial Court of Makati branch 143 recently issued a writ of preliminary attachment against LBC Express and its parent company LBC Development Corp. in relation to such civil case filed by PDIC. Other defendants 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.
In a disclosure posted on the Philippine Stock Exchange on Thursday, LBC Express’ parent firm LBC Express Holdings Inc. reiterated that there had been “no immediate material impact” on the group’s business operations.
LBC Express, which is led by the Araneta family, said it continued to exert utmost effort to fully attend to the needs of its customers and ensure regular ongoing operations.
“Nevertheless, we anticipate that as the writ of preliminary attachment is being executed and until LBC Express shall have implemented its remedies designed to meet and/or challenge said writ of preliminary attachment, LBC Express will need to take measures and find alternative channels of payments to its suppliers, lessors and other counter-parties,” the disclosure said. “This may pose some administrative and operational challenges given that we anticipate further garnishment of bank accounts,” it added.
As of Jan.6, LBC Express said six peso current bank accounts with a combined balance of P9.976 million had been attached by the court sheriff.
LBC Express said it had advised its customers, suppliers, lessors and other counter-parties and
encouraged them to coordinate with the company to ensure continued payments and services.
“LBC Express has also commenced the process of communicating with its bankers. Further, LBC Express Inc. is thoroughly assessing the situation through the assistance of legal counsel, and will exhaust all legal remedies to resolve this matter as soon as possible,” the company said.
The company asserted that the writ was a provisional remedy and the assets or cash of LBC Express would be made to answer only upon final judgment by the court.
“We are very much aware, however, that whether or not the claims against LBC Express 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 company said.
The Bangko Sentral ng Pilipinas ordered the closure of LBC Development Bank in 2011, citing huge advances to LBC Express as part of the reason why the thrift bank had become insolvent.
LBC Express is a leading player in payments, remittance, courier products, mail, parcels and, cargo logistics. It has operations in 4,400 locations in 30 countries in Asia-Pacific, North America, the Middle East and Europe, through various partners and agents.
The group had earlier wanted to embark on an initial public offering but this plan was sidelined by the woes of the affiliate thrift bank. Last year, the group found a backdoor-listing ticket to the local stock exchange by buying dormant holding firm Federal Resources Investment Group Inc.
