The SEC petitioned the Supreme Court to reverse a lower court's order including a pre-need company's trust fund in its insolvent estate. The trust fund was intended exclusively for the benefit of pre-need planholders. However, the lower court treated the fund as part of the insolvent company's assets, allowing other creditors to claim it. The Supreme Court ruled the trust fund cannot be used to satisfy other creditors' claims, as the Pre-Need Code and parties' agreements clearly establish the planholders as the sole beneficiaries. The lower court gravely abused its discretion in enjoining the SEC and prejudicing the planholders.
The SEC petitioned the Supreme Court to reverse a lower court's order including a pre-need company's trust fund in its insolvent estate. The trust fund was intended exclusively for the benefit of pre-need planholders. However, the lower court treated the fund as part of the insolvent company's assets, allowing other creditors to claim it. The Supreme Court ruled the trust fund cannot be used to satisfy other creditors' claims, as the Pre-Need Code and parties' agreements clearly establish the planholders as the sole beneficiaries. The lower court gravely abused its discretion in enjoining the SEC and prejudicing the planholders.
The SEC petitioned the Supreme Court to reverse a lower court's order including a pre-need company's trust fund in its insolvent estate. The trust fund was intended exclusively for the benefit of pre-need planholders. However, the lower court treated the fund as part of the insolvent company's assets, allowing other creditors to claim it. The Supreme Court ruled the trust fund cannot be used to satisfy other creditors' claims, as the Pre-Need Code and parties' agreements clearly establish the planholders as the sole beneficiaries. The lower court gravely abused its discretion in enjoining the SEC and prejudicing the planholders.
The SEC petitioned the Supreme Court to reverse a lower court's order including a pre-need company's trust fund in its insolvent estate. The trust fund was intended exclusively for the benefit of pre-need planholders. However, the lower court treated the fund as part of the insolvent company's assets, allowing other creditors to claim it. The Supreme Court ruled the trust fund cannot be used to satisfy other creditors' claims, as the Pre-Need Code and parties' agreements clearly establish the planholders as the sole beneficiaries. The lower court gravely abused its discretion in enjoining the SEC and prejudicing the planholders.
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o But SEC opposed the inclusion of the trust fund in the
SECURITIES AND EXCHANGE COMMISSION v LAIGO inventory of corporate assets
GR. No. 188639 | September 2, 2015 Doing so would contravene the “New Rules” Mendoza, J. creating the trust fund for the exclusive Protacio – Group 3 purpose of guaranteeing the delivery of benefits due to the planholders TOPIC: Pre-Need Plans / Pre-Need Code To include such in the insolvent’s estate will contravene its purpose Summary: Because it will be open to claims of non-planholders FACTS Nonetheless, Judge Laigo ordered the insolvency Assignee RA No. 8799 (Security Regulation Code), Section 16 Mendoza to take possession of the trust fund, hence including o SEC is mandated to prescribe rules and regulations it in Legacy’s corporate assets governing the pre-need industry o Trust fund could be withdrawn by the Assignee to be To which the SEC issued the “New rules on the Registration used for expenses incurred in discharging his and Sale of Pre-Need Plans” to govern prior to the passage of functions the Pre-Need Code of the Philippines o Judge Laigo also enjoined SEC from validating the o Requires pre-need providers to create trust funds as claims of planholders against the trust properties a requirement for registration o So basically the trust fund was included in the estate o Trust Fund – fund set up from planholders’ payments, of the insolvent, which could be open to claims of different from the paid-up capital of the pre-need Legacy’s creditors with official claims company Petition for certiorari assailing respondent Judge Laigo’s Legacy, a pre-need provider, complied with the trust fund order ordering the inclusion of the trust fund in the requirement and entered a trust agreement with Landbank corporate assets to the prejudice of the planholders The industry of pre-need providers collapsed in mid-2000 o SEC intends to secure the trust fund which was o Legacy was unable to pay its obligations to the supposedly for the planholders who “invested their planholders lifetime savings and hard-earned money in Legacy” Hence, Legacy became the subject of a petition for The trust fund should redound exclusively to involuntary insolvency filed by respondent planholders the benefit of the planhoders because they’re o It was declared insolvent by RTC and was ordered to the ultimate beneficial owners submit an inventory of assets and liabilities, in Legacy’s interest over the trust properties accordance with the Insolvency Law was only by virtue of it being the trustor, not SEC was then ordered by RTC to submit documents about the owner assets and liabilities of Legacy ISSUES 1. W/N the trust funds of Legacy form part of its corporate o Includes life, pension, education, interment, and assets other plans 2. W/N the respondent judge committed GAD in issuing the - Overarching consideration of the Legislature in setting up order funds is to protect the interest of the planholders in the 3. W/N the claims of planholders are to be treated investment plans differently from the claims of other creditors of Legacy o Such interests are paramount above all else 4. W/N Legacy retains ownership over the trust funds o SEC was directed to come up with the rules and despite the execution of trust agreements regulations governing not only the trust funds, but 5. W/N the insolvency court has authority to enjoin the industry as a whole petitioner SEC from further validating the claims of - (1) The trust fund is for the sole benefit of the planholders Legacy’s planholders and treating them as if they are and cannot be used to satisfy the claims of other creditors ordinary creditors of Legacy o Section 30 of Pre-Need Code 6. W/N the provisions of the Pre-Need Code regarding Trust funds are to redound solely to the liquidation is in the nature of a procedural law that can planholders be retroactively applied to the case at bar In no case shall the trust fund assets be used to satisfy the claims of other creditors of the Digester’s notes: tbh I don’t know how to connect this case to pre-need company insurance but I think it’s trying to explain what a pre-need plan in o Legacy is not a beneficiary (claimed interest is mere order to differentiate it from an insurance plan apparent than real) A person is a beneficiary if there is a manifest RULING intention to give such person the beneficial Court grants the petition filed by SEC – The trust fund is not to be interest over the trust properties included in Legacy’s corporate assets. Judge Laigo gravely Terms of the trust agreement plainly abused his discretion in treating the fund as part of the confer status of beneficiary to the insolvent’s estate and enjoining SEC’s validation of planholders’ planholders, not Legacy claims against the trust properties. Clear from even the SRC that the underlying congressional intent is to make the RATIO planholders the exclusive beneficiaries - RA No. 8799 (Securities Regulation Code) defines pre-need o The will of the Legislature was fortified with the plans (Abrera, v Barza) enactment of the Pre-Need Code in 2009(RA No. o Contracts which provide for the performance of 9829) future services or the payment of future monetary Clarifying the authority of SEC considerations at the time of actual need, for which Ensuring that the rights of the pre-need planholders pay in cash or installment at stated planholders is categorically defined and prices, with or without interest or insurance coverage protected Also set up the need for establishing a trust o Primary protection of the Code to planholders can fund and the responsibilities of the trustee apply retroactively o To rule that Legacy has retained a beneficial interest o Provisions of said code confirm the right to in the trust fund is to perpetuate the injustices exclusively claim against the trust funds committed against the planholders o No new substantive right was created or bestowed Planholders must not be prejudiced as to be - Court upholds its duty to protect the ordinary Filipino forced to share in the assets with other workers who are seeking a future for their children through creditors pre-need contracts. o Provisions only has the effect of Legacy agreeing to facilitate the payment of benefits from the trust fund to the intended beneficiaries - (2) Enjoining the SEC from validating the claims against the trust fund is grave abuse of discretion o Insolvency court has no authority to order reversion of properties that do not form part of Legacy’s insolvent estate o Claims against the trust fund must be distinguished from claims against Legacy Claims against trust fund are directed against LBP, the trustee o Pre-Need Code clearly differentiates claims against the pre-need company and those against the trust fund - (3) Jurisdiction over claims filed against the trust fund o From effectivity of the Pre-Need Code, the Insurance Commission has the primary and exclusive power to adjudicate claims involving pre-need plans Lol I think this is the first time the word insurance was mentioned in this case o However, those pending claims and cases filed with SEC continue in its full and final conclusion o Prior to the transfer tot eh IC of matters pertaining to pre-need plans and trust funds, the SEC had the authority to regulate, manage, and hear claims - (4) Pre-Need Code is curative and remedial in character, and can be applied retroactively
United States v. Alvaro Rojo-Alvarez, United States v. Adalberto Franco-Montoya, United States v. Walter Antonio Palacio-Perez, United States v. Carlos Arevalo-Gomez, 944 F.2d 959, 1st Cir. (1991)
Ronald Francis Smart v. William D. Leeke, Commissioner, South Carolina Department of Corrections Attorney General of South Carolina, 856 F.2d 609, 4th Cir. (1988)