The STI Group of businessman Eusebio Tanco has cornered the Benitez family, owners of the contested Philippine Women’s University, and left them with no choice but to repay its debts to STI as it filed for foreclosure of the PWU Manila campus with a Manila court.
In separate statements e-mailed to the media on Wednesday, both camps were justifiying their side—the STI Group seeking extra-judicial help to foreclose the PWU Manila campus as the Benitez group was placed in “default” because of its inability to pay its debts, while the latter was contesting that STI’s foreclosure bid is without basis as they have sent the Tanco camp terms to pay all its debts.
The original debt—which stemmed from STI saving PWU from BDO foreclosure because of unpaid loans in 2011—is P448 million and grew to P923 million on the “cost of money” overtime that included interests, value added taxes and legal expenses.
“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,” PWU Media Director Lyca Brown said.
While the Benitez camp has committed to pay STI “in fair and just terms” while seeking sources of funding, the STI Group ignored this, saying two letters that they have received from the Benitezes are “non-starter” attempts to pay the obligations.
“The first one was signed by the PWU president but offered no amount, no interest rate. That was a non-starter. The second came from Unlad [Resources Development Corp., the sister company of non-stock PWU] and signed by someone unknown to us and offering P550 million to be paid in installment[s],” STI Ppesident Monico Jacob said.
“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,” the STI president added.
“The filing [on the foreclosure of the PWU Manila campus]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,” he said.
The STI Group said a move to foreclose the Quezon City property and Davao property of PWU will follow.
In their defense, the Benitez family said it was a plot of the STI Group to force them into “an onerous settlement,” noting that the family’s offer is not an “empty” one.
“We based our offer on what we feel is a fair settlement in ongoing efforts to find a mutually acceptable resolution. STI’s reply was to foreclose on PWU property without making a formal reply to our offer,” the PWU media director said.
The PWU tug-of-war rooted from the Benitezes’ failure to pay the loans of PWU and its sister firm Unlad Resources to Banco de Oro in 2011, amounting to P230 million.
The STI Group settled PWU’s loans that saved the university from foreclosure, as well as funding operations of Benitez-owned PWU and Jose Abad Santos Memorial School (JASMS) since 2011, which totaled P448 million.
Because of appreciation, interests and cost of money over time, the debt expanded to P923 million from the original P448 million that the STI had handed down.