The Court of Appeal confirms the liquidation of Banco Filipino

MANILA, Philippines – The Court of Appeal (CA) upheld the decision of the Bangko Sentral ng Pilipinas (BSP) to place the closed Banco Filipino Savings and Mortgage Bank under the supervision of the State Liquidator.

In a statement, state-owned Philippine Deposit Insurance Corp. (PDIC) said the appeals court denied the motion for reconsideration filed by Metropolis Development Corp. (MDC), one of the major shareholders of the closed bank.

The AC has decided that it will no longer overturn a court decision to uphold the BSP (MB) Monetary Council’s action to place the closed Banco Filipino into liquidation by statutory receivership.

The AC said the MDC had not presented any new issues that would persuade it to change its resolution. The resolution refers to the court order confirming Resolution MB 1635 issued in 2011 placing Banco Filipino under PDIC liquidation.

In 2020, the CA dismissed the petition filed by MDC arguing that Banco Filipino was due to expire in 2014, three years after it went into receivership. The CA rendered the question moot and used it to deny the MDC’s request for certiorari.

“MDC had asserted in its dismissed petition that it could continue to exist for up to three years after its dissolution to liquidate its affairs and that MB’s resolution placing the bank in liquidation within seven months of its closure reduced their rights in as shareholders on the assets of the bank,” the PDIC said.

“The CA, however, did not give credence to the MDC’s argument and instead reinforced the merits of issuing the MB resolution,” the PDIC added.

The PDIC and Banco Filipino have a long history of financial wrangling over how to liquidate the assets of the shuttered bank after it closed more than 10 years ago.

In 2019, the PDIC filed a criminal complaint against former Banco Filipino officials with the Department of Justice (DOJ) for conducting business in a dangerous or unhealthy manner.

According to the state-owned company, decisions made by former Banco Filipino executives caused losses to the bank totaling 789.46 million pesos.

In 2016, the government liquidator also filed criminal charges against former Banco Filipino executives for a syndicated estafa amounting to 669.6 million pula.

The syndicated estafa was allegedly committed before the closure, but those involved failed to return the amount following MB’s decision to close Banco Filipino.

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