SEC Yet to Junk PAL Rehab Plan Despite Closure Announcement

Malaya

Monday, September 21, 1998

By Vic S. Lopez

The Securities and Exchange Commission (SEC) is yet to make a decision on the case of Philippine Airlines which sought a rehabilitation program from the commission despite its announcement to close operations by midnight of Wednesday.

Ysobel Murillo, a member of the SEC's three-man panel hearing PAL's case, said: "We are still waiting for the submission of (PAL’s rehabilitation) plan this Monday (today)."

Murillo was referring to the deadline set by the SEC for the airline to comply with a rehabilitation program it sought from the commission as part of a debt-relief plea from its creditors.

The airline was given by the SEC until today to comply with the rehabilitation program that spells out a realignment of its operations as well as the restructuring of its $2-billion debt. The hearing for the rehabilitation plan was scheduled on Sept. 30.

Murillo said the SEC is not closing the case as "several avenues are still being explored" to come up with a settlement between labor and management.

Murillo said that it is still premature to talk about the dissolution of PAL at this time as no official notice has been made.

"The SEC is yet to make its final decision on the issue," Murillo said.

Murillo said that in a letter, lawyers representing the interim receivership committee had officially informed the SEC that PAL is closing its operations by Sept. 23. But the letter does not state if the airline is also withdrawing from the rehabilitation plan.

When asked to comment, PAL Senior Vice President for Administration and Services Manolo Aquino said: "PAL will still file its rehab plan by Monday (today)."

But Aquino said with the announcement to shut down operations, the SEC can now lift its order where PAL could no longer have protection from its creditors.