MANILA, Philippines--ATR Kim Eng Financial Corp. has accepted a P617.4-million out-of-court settlement deal from Filipino businessman Carlos Araneta and the LBC group in connection with its disputed investment in Delaware-based LBC Global Corp.
ATRKE, which has a 10-percent stake in the Araneta-controlled LBC holding company LBC Global, earlier filed a complaint, citing an alleged breach of fiduciary duty in the disappearance of substantial assets of LBC Global. In 2007, a Delaware court ordered Araneta and two other individuals to pay ATRKE $24.49 million plus expenses and interest.
Consequently, ATRKE sought to enforce the Delaware court’s order on certain assets of LBC in the United States and in the Philippines. But according to the judicial practice in California, mediation must first be attempted by concerned parties before any court order is enforced.
“The global settlement agreement now reached ... will also settle all outstanding cases between the two groups in the US and in the Philippines,” ATRKE director and executive vice president Renato Leveriza Jr. told the Philippine Stock Exchange.
Under the settlement deal, ATRKE will receive from LBC parties a package consisting of cash in the amount of $2.5 million, interest-bearing promissory notes, fully secured irrevocable and unconditional standby letters of credit in the amount of $5 million and 226,072 common shares of stock representing 49-percent ownership in MNB Holdings Corp., the bank holding company for Mission National Bank (Mission Bank) in San Francisco, USA.
In exchange, all cases that the groups had filed against each other in the United States and in the Philippines would be dropped.
“The management of ATR Kim Eng Financial considers the terms of the global agreement to be satisfactory,” Leveriza said.
The total value of the package—estimated at P617.4 million—represents the value of claims from the court judgment award, which was reflected in the company’s audited financial statements as of Dec. 31, 2007.
In the case of Mission Bank, ATRKE will seek clarification from the Federal Reserve Board whether it will be allowed to acquire and retain ownership of MNB Holdings shares.
Pending receipt of clarification, the disclosure said Mission Bank’s management would continue to operate independently from ATRKE. As of end-2008, Missions Bank’s assets amounted to $166.36 million.
