GATCHALIAN-LED Waterfront Philippines, Inc. (WPI) plans to appeal before the Supreme Court the P840-million claim of the Social Security System (SSS) against the company and two other units.
“WPI will move for the reconsideration of the Decision or elevate the matter to the Supreme Court,” the company said.
The case, which also involves listed firm Wellex Industries, Inc. and The Wellex Group, Inc., started when WPI secured a five-year loan from SSS worth P375 million in 1999 to complete its network of Waterfront hotels. The company’s loan obligations rose to P605 million in August 2003, including penalties and interest.
SSS then executed a foreclosure proceeding on WPI’s properties since the company was considered in default with payments.
Unable to pay the loan, SSS sued the Gatchalian group for its inability to settle payments.
The Quezon City Regional Trial Court (RTC) in a decision dated Jan. 13, 2015 declared the contract of loan and related mortgages entered into by WPI and SSS null and void, enjoining the company to return the principal amount of the loan worth P375 million. The state-run fund was also directed to return WPI’s titles and documents which were held as collateral.
The Court of Appeals, however, reversed the RTC decision last month, ruling that the “contract of loan with real estate mortgage and assignment of shares with option to convert to shares of stock” in 1999 was valid. It then ordered WPI to settle P841.57 million due to SSS as of April 30, 2010.
The amount will earn the interest and penalty charges as stated in the 1999 contract, until the decision has been made final.
WPI saw its net income attributable to the parent drop by 19% to P187.59 million in the first six months of 2019, after gross revenues declined five percent to P948.26 million.
Shares in WPI closed flat at 70 centavos each at the stock exchange on Wednesday. — Arra B. Francia
