Yuchengco ploy boomerangs
Written by Omerta / Butch del Castillo
Friday, 06 February 2009 02:23
The Yuchengco family has supposedly sold its problematic preneed company, Pacific Plans Inc. (PPI), to a little-known businessman named Noel C. Onate for P250 million.
Somehow, I sense something fishy about the whole thing. First of all, why would any businessman—unless he is goofy—pay P250 million for a company that owes billions in settlements to more than 35,000 education-plan holders?
Even the timing of the so-called buyout makes the deal strange and mysterious.
Right now, the entire preneed industry is in the doldrums and seems to be in the twilight of its existence. The federation of preneed companies has already yelled for government help in the face of a ballooning deficit in its collective trust fund caused by an unprecedented slump in interest earnings.
Not only that, the industry has been suffering nose-diving sales. The collapse of several big-time preneed companies (among them College Assurance Plan, Platinum Plans, Pacific Plans, The Professional group and, lately, the Legacy group) has left millions of irate plan holders unpaid and in a lynching mood. Consumer confidence in preneed products has been greatly shaken, if not altogether shattered. (The federation’s confession that it has a huge trust-fund deficit, by the way, can only deepen public distrust in preneed products.)
Against this grim industry backdrop, the question is, what emboldened Noel Onate to venture into the preneed business anyway, despite all the odds? Simply put, what’s in it for him? I’ve been seeking answers to these questions because the whole thing just doesn’t make sense.
According to a source who was privy to the deal, the Yuchengcos unloaded Pacific Plans on the advice of a prominent lawyer. The main objective was to provide Pacific Plan’s unpaid plan holders a new “target” in their quest for damages and restitution.
In short, the Yuchengcos wanted to “buy” peace of mind. Apparently, they assumed that by divesting from PPI, the irate plan holders would be training their guns on the new owners. The Yuchengcos are figuratively black and blue, and have grown quite weary from all kinds of flak they’ve been getting ever since Pacific Plans defaulted on its obligations to its plan holders about three years ago.
The once-revered Yuchengco name was dragged through the mud even as that family sought a moratorium on payments under a rehabilitation plan.
But, as it turned out, the “strategic” move was ill-advised. It only compounded their headache. The “victims” of Pacific Plans were not to be so easily sidetracked.
When the announcement of the sale came, the Parents Enabling Parents (PEP) Coalition, headed by Philip Piccio, was furious. Here was unmistakable proof, Piccio said, that the Yuchengcos were trying to slip away from their obligation to settle the claims of PPI’s 35,000 plan holders.
Piccio announced that the PEP Coalition would file a slew of large-scale estafa cases against Alfonso Yuchengco (patriarch of the Yuchengco group) and Helen Yuchengco-Dee starting next week in different provinces all over the country where its aggrieved members reside. The sale of the company—if there was an actual sale and not a simulated one—would not absolve the Yuchengcos from their liability. In fact, the deal only bolsters the parents’ claim of bad faith on the part of the Yuchengcos, that they intend to turn their backs on their contractual commitments to the plan holders.
PEP Coalition members have expressed the suspicion that the sale to Onate’s group (Abundance Providers and Investments) is merely a simulated transfer of the ownership of Pacific Plans. On paper, however, it is a done deal between GPL Holdings (represented by Samuel V. Torres) and Abundance Providers. No document detailing the assets and liabilities of Pacific Plans has so far been made public. Only the copy of the deed of sale has been made available.
But assuming, without granting, that Onate has stepped into the picture only to serve as “foil” for the Yuchengcos, it would make more sense if the P250-million payment was made to Onate, instead of the other way around.
To the PEP Coalition—which said it was giving Onate’s group the benefit of the doubt—Onate simply doesn’t come across as a businessman with enough assets to make good on the company’s total liabilities. That is why it won’t ever let go of the Yuchengcos in its quest for justice.
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