Thursday, November 16, 2006

CAP gets respite after court approves rehabilitation

The College Assurance Plan can now focus on making the company stronger without fear of being dissolved after the Makati Regional Trial Court approve its application for rehabilitation.

CAP applied for rehabilitation September last year after it was flooded with claims from plan holders for the payment of its obligations as they fall due.

“At least the plan holders are assured of a court declaration that CAP has to pay its obligations although payment could not be expected to be made all at one time,” Securities and Exchange Commission Davao officer in charge Atty. Javey Paul Francisco told Mirror yesterday.

Francisco said he has not seen a copy of the decision of the rehabilitation court. However, he said that rehabilitation cases usually involve suspension of payments although it is suspended in the sense that the payment will be made at a specific schedule.

“I have not yet seen the court’s decision but if CAP will be ordered to pay its plan holders then the payment would not be made all at one time because if that happens then the company would no longer have assets to rehabilitate itself,” he said.

A company which is under rehabilitation and which is ordered to pay all its creditors all at one time will no longer have the capability to rehabilitate itself but will face liquidation already, he added.

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