STI to resume asset foreclosure proceedings against PWU
TANCO-led education group STI Holdings is set to resume asset foreclose proceedings against Philippine Women’s University (PWU) following the dismissal of the petition for corporate rehabilitation filed by 100-year-old PWU matriarch Helen Benitez.
With the outright dismissal of the rehabilitation case, STI told the Philippine Stock Exchange on Monday that the petitions it had initiated against PWU and UNLAD Resources Development Corp. for the extra judicial foreclosure of the real estate mortgages over their Quezon City and Davao properties could now proceed.
The foreclosure proceedings, STI said, would be to cover PWU and Unlad’s unpaid loan obligations to the company in the amount of P926.15 million as of December 2014.
UNLAD was established as a real estate company for the purpose of owning and holding the assets used by PWU.
It was earlier reported that a Manila commercial court had junked the petition for involuntary rehabilitation of PWU filed by the Benitez matriarch, citing ‘materially false’ and ‘misleading’ representation alongside findings that the school had been insolvent long before creditor STI Holdings came into the picture.
STI told the PSE that another order dated Aug. 19 issued by the rehabilitation court also denied the motion to join UNLAD as a party to the petition.
In its order, the rehabilitation court said it materially considered the rehabilitation receiver’s report which provided, among others, that PWU’s insolvency was due to debts not incurred in the ordinary course of business. The report stated that PWU had entered into transactions outside the nature of PWU, as an educational institution.
“Moreover, acquisition of properties and agreements that appear for the school did not materialize and yet money was already spent causing PWU to be in debt. Lastly, unauthorized advances by its then president and unaccounted money for the school formed part of liabilities not in the ordinary course of business,” the disclosure said.
The ruling thus favored STI’s contention that the Benitez petition was a “sham filing intended to delay the enforcement of the rights of creditors.”
Benitez had said her petition was meant to protect the operations of PWU after STI Holdings initiated foreclosure proceedings against the university,” claiming that these would prevent PWU from paying its debts and would render it insolvent. She also submitted a rehabilitation plan providing for the sale of assets to cover part of the debts of PWU, while the rest will be paid in accordance with projected cash flow over a 10-year period.
From the point of view of the Benitez family, when STI took over the loan from Banco de Oro, its chair Eusebio Tanco had agreed to waive all interests, thereby challenging the default declaration in court. For its part, the STI group said interest would have been waived if the Benitez family had complied with the original agreement to pay STI in the form of shares in UNLAD, which was to absorb all the real estate assets of PWU in a share-for-property swap and manage PWU. But since STI was never paid with shares in Unlad, the STI has charged interest on top of the principal debt owed by the Benitez family.
