Family feuds

Corporate Securities Info

Family feuds

By Raul J. Palabrica Jr.

At the rate the dirty linen of the family of the wife of Chief Justice Renato Corona, Cristina, is being washed in public, the third generation of her family must be cringing with embarrassment over the exchange of words between their feuding relatives.

In dramatic fashion, Sister Flory Basa, the only surviving original stockholder of Basa Guidote Enterprises Inc., (the company that Corona claims lent him money to buy a condominium unit) has accused her niece Cristina and Corona of illegally withdrawing P32.6 million from the company. Despite that, however, the 90-year old nun said she has forgiven both of them and is leaving everything to God.

If not for the impeachment trial, this family feud would have remained private. Although it first surfaced in 2002 when Corona was appointed to the Supreme Court and later in 2010 when he was named Chief Justice, scant attention was given to it by the media. In 2002, with newly installed President Gloria Macapagal Arroyo enjoying high public approval, her appointment of Corona breezed through the process. Arroyo’s controversial elevation of Corona to the position of Chief Justice in 2011 was overshadowed by the people’s euphoria over President Aquino’s election.

Partition

Family feuds in the Philippines, and elsewhere in the world, have always been about money, lots of money. They invariably involve the distribution of the properties of a deceased parent, or both, among the surviving heirs. The infighting becomes more intense if the patriarch or matriarch (usually it’s the former) had another family on the side or children from previous marital relationships. With their access to the best lawyers or estate planning experts that money can buy, it is reasonable to expect heads of well-heeled families to take the proper measures ahead of time to keep their heirs from quarrelling over their assets when their appointment with St. Peter comes.

Although last wills and testaments and early distribution of properties are effective means of maintaining post-mortem peace in the family, a human element called “greed” sometimes gets the better of the heirs. It has been said that, by and large, brothers and sisters can straighten out their differences about estate distribution among themselves. But problems usually arise when in-laws or relatives by affinity (step or half relationships) get into the picture. The combination of greed and undue influence, especially if it emanates from the bedroom, can make brothers and sisters, who were once close, to turn against each other, sometimes violently.

Litigation

Among the family feuds that once gripped the country is that involving the P1-billion estate of businessman Potenciano Ilusorio of, among others, Baguio Country Club and Philippine Communications Satellite Corp. fame. The dispute over his estate pitted, on one side, Erlinda Ilusorio-Bildner, Maximo Ilusorio and Sylvia Ilusorio-Yap against the group of Ramon Ilusorio, Marietta Ilusorio and Shereen Ilusorio. They filed criminal and civil cases against each other. Their mother, who found herself in the legal crossfire, had to go to court (and lost) to be allowed to visit and take care of her husband while the latter was in the custody of one of her daughters.

The siblings accused each other of murdering their father or manipulating his last will and testament to gain control over his estate. Worse, a sister almost got run over when she attempted to stop the car that was taking her father away. In an ending fit for a telenovela, when Ilusorio died of natural causes in 2001, his remains were cremated with one side of the family and his widow not getting the opportunity to pay their last respects to him. Eleven years after his death, his heirs are still locked in legal combat over his estate.

Equally riveting, but less dramatic, is the fight for control over the family-owned Green Cross Inc. (formerly Gonzalo Laboratories Inc.), manufacturers of well-known household personal care products.

According to Gonzalo Co, eldest of the Co family, he started the business in 1952 with his own funds and personally attended to the manufacture and sale of its products. In 1965, he brought in his younger siblings into the business and converted it into a corporation with him taking 50 percent of its stocks and the rest spread among his parents and five siblings.

Fast forward to 2007, when the company’s net worth had grown into multimillion pesos, he filed criminal charges against his siblings and their children for alleged misappropriation of his shares. He claims that his siblings, whom he had entrusted with the management of the company, manipulated the corporate records to reduce his stockholdings. His siblings denied the charge and said all the corporate transactions that led to his loss of control of the company were aboveboard.

The family feud, which has metamorphosed from an intra-corporate dispute into a probate case to settle the estate of the Cos’ deceased parents, is (not surprisingly) still mired in court.

Results

There are a number of family feuds involving prominent families that are pending in courts all over the country. Unless any of the parties is a public figure (for example, former Sen. Jamby Madrigal) or otherwise thinks that media attention would help his cause, these cases could be resolved away from the public eye.

Of course, the contending lawyers will only be too happy that the cases languish in court. They are assured of their fees every time they appear in court, whether or not the hearing pushes through, and whenever they file pleadings for their clients. For the feuding relatives, however, every day of delay translates to anguish and hurts that will stay in their and their children’s hearts for the rest of their lives.

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