Posted on November 03, 2014 10:44:00
PM [ BusinessWorld Online ]
THE DEVELOPER of the Puerto Azul
seaside estate in Cavite can proceed with its rehabilitation plan, the Supreme
Court has ruled, reversing an appellate court decision that sided with the
resort developer’s creditors.
In its Sept. 17 ruling released to
media on Monday, the high court’s first division said it finds in favor of the
Puerto Azul Land, Inc. (PALI).
Regulatory filings with the Securities
and Exchange Commission show Rebecco E. Panlilio and his family as the
incorporators of PALI.
Listed company Boulevard Holdings,
Inc., also headed by the Panlilio group, began talks last year with property
giant Ayala Land, Inc. for the sale of Puerto Azul -- a sprawling mountainous
beach-golf resort and country club in Ternate, Cavite -- but last month, Ayala
Land said it is no longer pursuing the deal.
The Supreme Court’s Sept. 17 decision
reverses a 2008 ruling by the Court of Appeals (CA) that favored PALI’s
creditors -- proxies of the now defunct Equitable PCI Bank (which merged with
BDO Unibank, Inc.) and Export and Industry Bank.
PALI creditors took the case to the
appellate court after a Manila trial court approved in 2005 the rehabilitation
plan of the Puerto Azul developer.
PALI owed P640 million at the time. It
sought rehabilitation on Sept. 14, 2004 after its finances wobbled, citing as
reasons the Philippine Stock Exchange’s denial for it to raise more capital
through an initial public offering; the 1997 Asian financial crisis that
depressed real estate values; and the real estate bubble burst.
Creditors objected to the
rehabilitation plan, which included among others a 50% haircut on PALI’s
principal obligation, as well as the condonation of penalties and interests.
“We find nothing erroneous in the
terms of PALI’s rehabilitation. The Interim Rules on Corporate Rehabilitation
provides for means of execution of the rehabilitation plan,” the high court
said.
The Supreme Court also said that the
restructuring of the debts of Puerto Azul Land is “part and parcel” of its
rehabilitation.
“Per findings of the RTC (regional
trial court) and as affirmed by the CA, the restructuring of debts of PALI
would not be prejudicial to the interest of PWRDC as a secured creditor,” the
high court said, referring to Pacific Wide Realty Development Corp. (PWRDC), the
creditors’ proxy.
The case was docketed as G.R. No.
184000 Puerto Azul Land, Inc. vs. Pacific Wide Realty Development Corp.
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