Thursday, November 13, 2008 Bank postpones hotels auction; discuss options, lawyers ordered
THE Philippine National Bank (PNB) is postponing for 10 days the auction of two Waterfront hotels that it has sought to foreclose.
The postponement may only be for a short period, but Waterfront lawyers took this as a sign that the bank is “taking a second look” into their decision to close the two hotels due to a debt of about P740 million.
Officers and a battery of lawyers from both parties arrived at the Lapu-Lapu City Regional Trial Court (RTC) yesterday, including former president Joseph Estrada’s defense counsel, Estelito Mendoza.
“I’m in this case with instructions (from PNB) to foreclose,” Mendoza told Waterfront Philippines, Inc. (WPI) lawyers and officers.
Postponement
Yesterday, Lapu-Lapu RTC Judge Victor Teves Sr. postponed the scheduled hearing on WPI’s petition for a temporary restraining order (TRO).
If granted, a TRO will prevent the publication of a notice of sale for the public auction of Waterfront Cebu City Casino Hotel, Inc. and Waterfront Mactan Casino Hotel, Inc.
With PNB’s petition for the foreclosure of the hotels, the public auction of the hotels was set early December. A notice of sale must be published in a newspaper for three consecutive weeks before the sale.
Tomorrow would have been the first publication of the notice of sale for Waterfront Mactan. Two more publications were scheduled for Nov. 21 and 28, before the hotel’s sale on Dec. 5.
But yesterday, Teves asked both parties to discuss with each other before deciding to push through with the hearing on the TRO.
After taking the entire afternoon for negotiation, the parties agreed to postpone the hearing and schedule it for next Tuesday.
Unless a TRO is granted, the first publication of the notice of sale for Waterfront Mactan would be on Nov. 24, 10 days from the original publication date. This moves the sale to Dec. 15.
‘Man-to-man’
But WPI lawyers expressed hope that Dr. Lucio Tan, owner of PNB, would be willing to meet with WPI owner Sherwin Gatchalian for a “man-to-man” discussion. Mendoza, though, said he does not know how willing Tan would be.
In seeking a TRO, WPI argued that the two hotels were no longer listed as mortgage upon the restructuring of their loan with PNB.
Their loan with PNB was restructured thrice. The last restructuring agreement promised that WPI would pay the amount of P1 billion within the period of March 1, 2004 to Dec. 31, 2008.
WPI’s P744,946,053.07 balance as of Oct. 23 does not include penalties, expenses, interest and attorney’s fees.
However, the latest restructuring agreement did not list Waterfront Cebu City and Waterfront Mactan as part of its mortgage under the Mortgage Trust Indenture (MTI), according to WPI lawyer Tito Pintor.
“The MTI (claimed by PNB) is not valid because it is only for the original loan, which has been restructured three times. For every restructure, there must be an MTI,” said Pintor.
Not enough
The agreement assigned WPI’s proceeds from its major leasing client, Philippine Gaming Amusement Corporation (Pagcor), to the payment of its debt to PNB.
But Mendoza claimed that PNB has not received anything from WPI’s Pagcor rentals. He added, though, that even this would not be enough for WPI to pay its debt.
WPI lawyer Lamberto Mercado Jr. admitted that the Pagcor receivables could shoulder the debt, but not enough to pay the entire amount at once, which is what PNB reportedly wants.
WPI lawyers said that a publication of the notice of sale would do much damage to the hotel’s business.
“There’s an economic meltdown worldwide. Is this the way PNB is trying to solve the crisis, by foreclosing instead of helping businesses?” Pintor said.
But Mercado and Pintor expressed hope that with the postponement of the publication of the notice of sale, PNB may be opening its doors to another settlement or restructuring agreement.
Pintor pointed out that WPI is willing to pay the debt, and the disagreement lies only in the terms of payment. (KAB)
