STI Holdings Inc. is set to proceed with foreclosure proceedings of the Benitez family’s properties in Quezon City and Davao as an extra judicial aid stemming from the family’s supposed inability to pay its obligations to the STI Group involving the Philippine Women’s University (PWU).
In a disclosure to the Philippine Stock Exchange on Monday, subsidiary STI Education Systems Holdings Inc. said that the properties will be foreclosed after the Manila Regional Trial Court dismissed the Benitez Group’s petition to include the properties in a rehabilitation program.
STI previously filed for foreclosure proceedings on three properties owned by the Benitezes, covering the PWU Manila campus along Taft Avenue, Jose Abad Santos Memorial School (JASMS) Quezon City campus, and a Davao property under the Benitez Group’s corporate vehicle Unlad Resources Development Corp.
“With the outright dismissal of the rehabilitation case, the February 18, 2015 petition initiated by the company against PWU and UNLAD for the extra judicial foreclosure of the real estate mortgages over their Quezon City and Davao properties can proceed in order to satisfy PWU and UNLAD’s unpaid loan obligations to the company in the amount of P926.146 million as of December 7, 2014,” STI said.
The Benitez family has offered to settle its obligations to the Tanco-led STI Group twice, but was rejected by STI President Monico Jacob on ground that the settlement was “not agreeable” on all counts. Thus, the Benitez family filed a petition for rehabilitation before the courts in Manila.
But the Manila regional courts dismissed the petition, the “misleading statements” as well as “sham filing intended to delay the enforcement of the rights of creditors,” according to the disclosure.
“PWU’s insolvency is due to debts not incurred in the ordinary course of business. The report further stated that PWU entered into transactions outside the nature of PWU, as an educational institution,” the disclosure read.
“Moreover, the acquisition of properties and the 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,” it added.
Apart from the supposedly misleading statements, the courts noted that “the Rehabilitation Court was convinced that the petition was executed for the primary purpose of delaying the enforcement of the rights of as creditor,” STE Education claimed.
The legal tussle stemmed from the Benitezes’ failure to pay the P230 million of loans the PWU and Unlad took out from Banco de Oro in 2011. The STI Group settled loans and extended funding for JASAMS and PWU to continue operating since 2011.
The funds the STI Group supposedly gave the Benitezes totaled P448 million.
Due to appreciation, interests and cost of money over time, the debt expanded to P926 million, the group claimed.