BCDA asks court to reconsider ruling-A A +A
By JM Agreda
Wednesday, February 20, 2013
BASES Conversion and Development Authority (BCDA) recently filed a motion for reconsideration on the Regional Trial Court (RTC) Branch 6 decision last December 21, 2012 maintaining the injunction issued in favor of Camp John Hay Development Corporation (CJHDevCo) preventing any takeover in its leased area.
BCDA through its corporate secretary Peter Paul Andrew Flores, filed their motion for reconsideration last February 4 on grounds stating that “Liberty Insurance Corporation does not appear to have sufficient ability to answer in the amount of CJHDevCo’s bond of P736,328,465.50.”
RTC Branch 6 Judge Cecilia Corazon Dulay-Archog earlier denied BCDA’s Motion to Dissolve Writ of Preliminary Injunction last September 14, 2012, holding that “found that the bond is sufficient in amount and the surety succeeded to justify” citing Liberty Insurance Corporation is a duly accredited and authorized bonding company.
Liberty Insurance Corporation was the insurer of the injunction bond approved by the court.
However, the BCDA contended this decision reasoning Liberty Insurance Corporation does not have the capacity and sufficient assets to respond to the amount of the suretyship obligation.
BCDA added “that based on the surety’s audited financial statements for the year ended December 31, 2011, its total financial assets amounted only to P326,242,935 while its total liabilities amounted to 113,818.464. This means the surety was left with net assets of only P212,424,471 to answer its contingent liabilities.”
“Given, its net assets of only P212,424,471, Liberty Insurance Corporation is not in a financial position to answer in the amount of CJHDevCo’s bond of P736,328,465.50, more than thrice the surety’s net assets,” BCDA stated.
The BCDA added that the mere fact that Liberty Insurance Corporation is a duly accredited and authorized bonding company does not ensure its ability to secure the performance of CJHDevCo’s bond.
John Hay Management Corporation, BCDA’s estate manager in Camp John Hay Special Economic Zone, through its president Dr. Jamie Agbayani, said they are currently in the process of arbitration presided by the Philippine Dispute Resolution Center.
Agbayani said the BCDA submitted to the arbitration process January 2013 as ordered by the court while they are expecting the process to take up to a year before a decision is reached.
She said CJHDevCo’s unpaid lease rentals has already grown to P3.2 billion including surcharges amounting to at least P150 million per annum.
The BCDA, she said, is pressed to collect this unpaid lease rentals stressing 25 percent of this would go to the Baguio City government.
The BCDA had attempted to takeover its leased property with CJHDevCo early last year but the injunction order prevented them from reclaiming their property.
Published in the Sun.Star Baguio newspaper on February 20, 2013.