Court orders LBC Express properties seized in P1.8-B claims suit by PDIC

LBC Express Holdings Inc. on Monday said it has received a summons and a writ of preliminary attachment, stemming from the civil cases filed against it by the shuttered LBC Development Bank.

The summons and the writ of attachment were served on December 28, 2015, the publicly listed LBC Express said in a regulatory filing.

"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 any or all of the defendants provide security to satisfy any final judgment in the case, in the manner provided by the Rules of Court," the filing read.

LBC Development Bank, represented by the Philippine Deposit Insurance Corp. (PDIC), claimed it was owed P1.8 billion in unpaid service fees by LBC Express Holdings. Other defendants in the case include LBC Development Corp. and LBC Express Inc.

LBC Development Corp. used to be a stockholder of the now-defunct LBC Development Bank. It is also the parent company of LBC Express Holdings which controls LBC Express Inc.

"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," LBC Express said.

"Each of LBC Express Inc. and LBC Development Corp. are currently determining and assessing the various options and legal remedies available to it and any disclosure being made herein by LBC Express Holdings Inc. is without prejudice thereto," LBC Express noted.

Both defendant companies have yet to file their respective answers to the complaint.

In September, the PDIC filed syndicated estafa charges against 11 directors, officers, and employees of LBC Development Bank and two employees of LBC Development Corp. for allegedly misappropriating P60 million of deposits.

According to the claims, executives of LBC Development Bank were in connivance in prompting the bank to borrow some P30 million from a commercial lender and use funds, largely from its deposits to settle the unrecorded loan.

The defendants also include LBC Express subsidiary LBC Properties Inc., Juan Carlos Araneta, Santiago G. Araneta, Fernando G. Araneta, Monica G. Araneta, Carlos Araneta, Ma. Eliza G. Berenguer, Ofelia F. Cuevas, Apolonia L. Ilio, Joseph Jeffrey Rodriguez, and Arlan T. Jurado.

LBC Development Bank was placed under the receivership of PDIC in September 2011, after the Bangko Sentral ng Pilipinas (BSP) ordered it closed.

The central bank decided to shut down the bank due to insufficient assets and weak financial capability. – Jon Viktor Cabuenas/VS, GMA News