TANCO-led STI Holdings Inc. has initiated asset foreclosure proceedings against the Benitez family, asking a Manila court to allow the takeover of two campuses of Philippine Women’s University – one in Taft Avenue and another in Indiana Street.
In a statement, STI said it had resorted to foreclosure proceedings due to PWU’s failure to pay almost P1 billion in accumulated loans, interest, and expenses. It added that foreclosure proceedings for the Quezon City and Davao properties of PWU would follow.
“The filing will protect the interest of STI and its shareholders. We were supposed to be have been paid in shares of stock way back in 2011 but even now, more than three years later, the first required step of increasing the authorized capital stock of Unlad Resources, PWU’s sister company that would absorb the school’s assets, was never taken by the Benitez group,” STI president Monico Jacob said in a press statement on Wednesday.
Instead, Jacob said STI’s three nominees to the Unlad board were ousted by the Benitez group in a shareholders meeting last month, noting this was “a very clear sign they are rejecting the omnibus agreement they signed and that would have made STI part owner of PWU and Unlad.”
“We waited for three years. All we got instead were baseless and false allegations in public that STI was the one pushing for the commercial development of PWU’s Quezon City property that they themselves actually approved even before STI bailed out the Benitezes from sure foreclosure in 2011,” he said.
The Benitez family which controls PWU, in a separate statement on Wednesday, assailed this foreclosure move, saying the petition for extrajudicial foreclosure filed before a Manila court filed had no basis.
Lydia Benitez-Brown, PWU media director said the family had already filed a case before the Manila regional trial court last month challenging STI’s declaration of default. “STI’s latest move is a legal matter and will be dealt with in the proper legal forum”,” she added.
“We’ve always said that we will honor all our commitments to Mr. Eusebio Tanco and STI, and we will. But only under fair and just terms. Their demand that we pay P923 million for obligations of P448 million is exorbitant and unacceptable,” Brown said.
Last Dec. 22, 2014, STI declared the Benitez family in default of its loan to STI.
On the part of PWU, Brown said STI Holdings had waived all interests and penalties on the Banco de Oro Unibank loan of P250 million assumed by Tanco three years ago. “STI acquired the BDO loan and extended a P198-million loan to Unlad Resources Development Corp. which was used to buy land in JASMS Quezon City and for school operations” she explained. During this time, she said STI/Tanco appointees controlled finances of both PWU and Unlad.
Brown noted the Benitez family’s formal settlement offer to Tanco/STI last week, proposing to pay STI to cover principal and a “break-up premium.”
“We based our offer on what we feel is a fair settlement in ongoing efforts to find a mutually acceptable resolution” Brown said. “STI’s reply was to foreclose on PWU property without making a formal reply to our offer.”
PWU owns properties valued at around P1.5 billion including land in JASMS Quezon City which was at the center of a development deal between STI and Ayala Land announced by Tanco/STI last September. The JASMS parents and the Benitez family voiced concerns about the STI-Ayala property development deal.
“We are raising the money to settle our obligations to Mr. Tanco. When STI issued its illegal declaration of default last December, it was based on an unreasonable demand that we settle P923 million in seven days. These are the kind of unacceptable terms that hinder efforts to reach an amicable settlement,” Brown said.
Brown also assailed the statement of STI president Monico Jacob that the family’s formal offer to pay back STI was an “empty offer.”
“We will not be forced into an obviously onerous settlement with STI. Our offer is based on the premise of a fair and just settlement. STI’s terms for a settlement are simply unacceptable. Mr. Tanco should realize that we cannot and will not bow down to such strong-arm tactics,” Brown said.