The College Assurance Plan continues with its operations despite reports that it is headed towards bankruptcy with its failure to pay the tuition of many of its student-plan holders, including those in Bacolod City.

Acting area manager Alex Lagrito said in a report of ABS-CBN-Bacolod's TV Patrol yesterday that their office in the city is still open.

This was reported as the Makati Regional Trial Court has accepted CAP's petition for rehabilitation, which allowed its receiver to start auditing the company's business recovery plan.

Judge Romeo Barza of Branch 61 issued an order on Dec. 16 that the court has found merit in the petition, adding that it was sufficient to warrant a referral to CAP's rehabilitation receiver, Mamerto Marcelo.

The court has yet to approve the rehabilitation plan but it directed CAP's receiver to evaluate the plan within 30 days from receipt of the order.

But a group of 10,000 CAP plan holders opposed the court decision as they are seeking the liquidation of the company and distribution of its assets to concerned parties.

A plan holder from Bacolod, Ritzy Robles Malo-oy, said she is worried that the CAP educational plan of her 8-year-old daughter, Erica, would become a "dead investment" because of the financial problems of the pre-need firm.

She said that her husband had fully paid the policy in 2004, but they are still hoping CAP would recover financially so that they could see their daughter through college.

CAP was reported in 2002 to have incurred a trust fund deficiency of P2.5 billion, raising doubts in its ability to meet future benefits of its some 780,000 plan holders.

The Securities and Exchange Commission requires that a pre-need company must set aside a portion of the premiums or payments collected from plan holders to build up the trust fund, considered a critical component of the mechanism designed to guarantee the capacity of the company to meet its future obligations to plan holders.*NLG

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