LBC takes steps to ensure payments amid garnishments | | Philippine News
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LBC takes steps to ensure payments amid garnishments

LBC Express Holdings, Inc. disclosed that subsidiary courier and remittance firm LBC Express, Inc. needs to take measures and find alternative channels of payments to its suppliers, lessors and other counterparties after a local court started to garnish its bank accounts.

In a disclosure to the Philippine Stock Exchange, LBC said though that there has been no immediate material impact on the business operations of the Company and LBC Express from the writ of preliminary attachment issued.

“LBC Express continues to exert utmost effort to fully attend to the needs of its customers and ensure regular ongoing operations,” the firm said.

However, it noted that “we anticipate that as the Writ of Preliminary Attachment is being executed and until LBC Express shall have implemented its remedies designed to meet and/or challenge said Writ of Preliminary Attachment, LBC Express will need to take measures and find alternative channels of payments.”

The Philippine Deposit Insurance Corporation, representing LBC Development Bank, Inc., has sued LBC Express Holdings Inc. (LDBI) for R1.8 billion in “unpaid service fees” and had secured summons and a writ of preliminary attachment for collection of sum of money.

Aside from LBC Express, the defendants include LBC Development Corporation and LBC Express, Inc., the parent company and subsidiary, respectively, of LBC Express Holdings, Inc.

The writ of preliminary attachment directs the sheriff of the court to attach real and personal properties of any of the defendants sufficient to satisfy the plaintiff’s claim and costs of suit, unless any or all of the defendants provide security to satisfy any final judgment in the case, in the manner provided by the Rules of Court.

So far, six bank accounts of LBC with BDO Unibank, Bank of the Philippine Islands and BPI Family Bank containing a total of R9.98 million has been attached.

LBC said “this may pose some administrative and operational challenges given that we anticipate further garnishment of bank accounts.”

To address this, LBC Express has advised its customers, suppliers, lessors, and other counterparties and has encouraged them to coordinate with LBC Express to ensure continued payments and services.

LBC Express has also commenced the process of communicating with its bankers while “thoroughly assessing the situation through the assistance of legal counsel, and will exhaust all legal remedies to resolve this matter as soon as possible.”

However, LBC reiterated that the writ is a provisional remedy and the assets or cash of LBC Express shall be made to answer only upon final judgment being rendered against LBC Express.

“We are very much aware, however, that whether or not the claims against LBC Express are successfully proven, there can be no assurance that these claims will not cause business interruptions or reputational harm to LBC Express Holdings, Inc. and may ultimately have a material adverse effect on its financial performance and prospects,” LBC said.