Firm ordered to pay P1-B loan to bank
MANILA -- The Supreme Court (SC) ordered a local copra exporting firm to pay close to PHP1 billion representing its unpaid loan obligations to Banco de Oro Unibank, Inc (BDO).
In a resolution dated November 11 released on Tuesday, the SC’s Third Division affirmed with modification the Court of Appeals’ (CA) Nov. 22, 2018 decision which upheld the ruling issued by the Regional Trial Court of Makati City on Jan. 25, 2017, directing International Copra Export Corporation (ICEC), Interco Manufacturing Corporation (Interco) and their affiliated security companies owned by the Luy family to pay BDO a total of PHP833,589,999.
The Court imposed a 6-percent interest per annum from the finality of the decision until fully paid instead of the 10 percent previously imposed by the Makati RTC.
The SC also increased the attorney’s fees awarded to BDO from PHP25 million to PHP41.67 million.
“Acting on the petition for review on certiorari assailing the decision and resolution, dated November 22, 2018 and July 3, 2019, respectively, of
the Court of Appeals, the Court resolves to deny the petition for failure to show any reversible error in the challenged decision and resolution as to warrant the exercise by this Court of its discretionary appellate jurisdiction,” the SC resolution read.
BDO’s predecessor-ininterest, Philippine Commercial International Bank (PCI Bank) which later on became Equitable PCI Bank (EPCI), has been extending loan and credit facilities to ICEC and Interco.
On account of the good standing of the two copra companies, the loans were consistently renewed without any collateral.
Between 1995 to 2007, a surety agreement and deed of suretyship were executed between the bank and the Luys.
In June 2006, the parties negotiated the collateralization of ICEC and Interco’s loans due to the drastic drop in their export volumes.
EPCI proposed that a portion of the total obligation be secured by a real estate mortgage over the LKG Tower, a building in Makati City owned by ICEC Land but was rejected by the copra companies.
On account of defendantsappellants’ refusal to collateralize their loan, EPCI offered them two options : (a) renew the PHP900 million loan on a clean basis but subject to a PHP25 million quarterly amortization beginning November 2006; and (b) the outstanding obligation of PHP255 million shall be amortized for five years beginning January 2007 through five annual payments of PHP51 million.
Both options are nevertheless subject to a condition that all the creditors of defendantappellants shall remain on “pari passu” (equal footing).
Under the said arrangement, their creditors would be treated on equal footing with respect to the uniform absence of collaterals. And, should they provide collaterals to any of their creditors, excluding the real estate mortgage with the Bank of the Philippine Islands (BPI), or if any of their creditors enjoy preferential terms over that of EPCI, these circumstances shall be considered as events of default.