Philippines casino and hospitality investor Waterfront Philippines Inc (WPI) has been ordered to pay more than US$16 million plus interest after the Court of Appeals overturned an earlier decision relating to a defaulted loan payment from 2003.
The payment, amounting to Php605 million (US$11.6 million) when first considered in default 16 years ago, came after WPI obtained a five-year term loan for Php375 million (US$7.2 million) from a company called Social Security System (SSS) to finance the completion of facilities at Waterfront Cebu City Casino Hotel. The loan was secured by a first mortgage over parcels of land owned by WPI’s parent and by the assignment of Php200 million common shares in WPI.
After WPI – which also owns Waterfront Casino Hotel in Mactan, Davao Insular Hotel Company in Davao City and Manila Pavilion Hotel – defaulted in 2003, SSS executed a foreclosure proceeding on the mortgaged parcels of land which it sold for Php198 million (US$3.8 million), however negotiations over a restructuring of the loan and repayment of other obligations broke down.
In 2015, WPI scored a sizeable legal victory when the Regional Trial Court of Quezon City declared the original 1999 contract of loan and related mortgages entered into between the two parties to be void, ordering that WPI repay only the initial Php375 million loan amount and that SSS return to WPI various titles and documents held as collateral.
In a filing to the Philippine Stock Exchange on Wednesday, WPI revealed that decision has been overturned with the Court of Appeals finding the contract of loan, assignment of shares and foreclosure sale of WPI land all vaild.
As a result, the company has been ordered to pay the sum of Php841,567,136 due to SSS as of 30 April 2010 plus stipulated interest and penalty charges.