Vol. XXI, No. 188-A [ Business World Online ]
Saturday, April 26, 2008 | MANILA, PHILIPPINES
The Manila Regional Trial Court has prohibited Land Bank of the Philippines from selling its supposed stake in posh Pan-Pacific Manila Hotel.
In a decision dated February 29, Judge Gregorio B. Clemena Jr. of Branch 51 of the trial court ordered a writ of execution implementing a compromise agreement between Landbank and Adriatico Consortium, Inc., the hotel owner, and preventing the transfer of Landbank’s claims on the hotel to a businessman.
"Let a writ of execution be issued directing Landbank [and the hotel’s former manager William A. Siy] to suspend all actions against petitioner and particularly with respect to [the papers on indebtedness] including the transfer of the same to the buyer at the public auction," Mr.Clemena said.
In a phone interview, the firm’s counsel Arturo Santos said he filed for the writ of execution after the government-owned bank allegedly moved to sell the hotel to businessman William Gatchalian.
Adriatico earlier borrowed P200 million from the bank to cover several of its obligations. Its former manager, Mr. Siy, however allegedly defrauded the firm more than half of it or around P140 million.
It was also later determined that the same official supposedly "falsified" documents that indicated Adriatico offered as collateral six parcels of land, where the hotel is currently situated in, for two loan deals he got.
The loan deal is contained in Mortgage Participation Certificate No. 0002 worth P200 million and Mortgage Participation Certificate No. 0004 worth P100 million.
Adriatico entered into a compromise agreement with Landbank, committing to pay the first loan worth P200 million. The bank, on the other hand, agreed not to act on the other P300 million obligation since it was a case of "misplaced trust [involving Mr. Siy]," Mr. Santos noted.
The trial court approved the compromise agreement on January 31, 2001, directing both not to take action against each other while determining the extent of the P300 million case in a litigation proceeding.
By virtue of the Special Purpose Vehicle Law however, the bank moved to sell its bad assets to third parties. Mr. Gatchalian, thus, came into the picture.
A special purpose vehicle is a company that buys and sells the non-performing loans of banks. This allows the bank to turn such bad assets into cash.
Because of this recent development, Adriatico moved to file a writ of execution of the compromise agreement.
Finding for the firm, the court said "in its careful evaluation...observed that [in the decision dated January 31, 2001 is a provision that] prohibits the parties to take action against each other was violated by defendant Landbank."
Landbank has yet to issue a statement pending clearance from its legal department. — Ira P. Pedrasa
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