‘King of Padala’ slapped wiht P1.8 billion claim
By Ted Alcuitas
THE LBC courier group led by the Araneta family is grappling with a P1.8-billion claim filed by the state-owned Philippine Deposit Insurance Corp. (PDIC) on behalf of defunct banking affiliate LBC Development Bank, according to the Philippine Daily Inquirer.(PDI)
The carrier, which bills itself as the King of them all, has several branches throughout Canada including B.C.’s lower mainland. It is considered the FEDex of the Philippines.
PDI reports that the Regional Trial Court of Makati branch 143 has issued a writ of preliminary attachment against certain parties, including its parent company LBC Development Corp. and subsidiary LBC Express Inc. in relation to a civil case for collection of allegedly unpaid service fees, LBC Express Holdings Inc. said in a disclosure to the Philippine Stock Exchange on Monday, January 4.
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.
“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 9am to 10 am on Monday after the disclosure on the legal proceedings was posted.
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.
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 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.
The disclosure said the summons and the writ of preliminary attachment had been summoned on Dec. 28. As of Monday, LBC Development Corp. and LBC Express had yet to file their respective replies to the complaint.
LBC Express 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.
Luzon Brokerage Corporation (LBC) was founded in the 1950’s as a brokerage and air cargo event. LBC initially operated as an air cargo forwarding service provider and was the first to introduce 24-hour air cargo delivery service.
Last year, the Federal Resources Investment Group Inc. (FED) acquired a controlling stake in LBC Express Inc. at a book value of no less than P1 billion.
In line with the backdoor-listing plan that pitched a logistics play, the company would thus be renamed LBC Express Holdings Inc. and its ticker will be changed from FED to LBC.
The plan is for LBC to jack up its authorized capital from P100 million divided into 100 million shares to up to P3 billion divided into 3 billion shares with a par value of P1 each. The company plans to issue new shares at P1 a share to LBC Development Corp.