C06539-2019

SECURITIES AND EXCHANGE COMMISSIONSEC FORM 17-C

CURRENT REPORT UNDER SECTION 17
OF THE SECURITIES REGULATION CODE
AND SRC RULE 17.2(c) THEREUNDER

1. Date of Report (Date of earliest event reported)
Sep 23, 2019
2. SEC Identification Number
AS-0994-8678
3. BIR Tax Identification No.
D80-003-978-254
4. Exact name of issuer as specified in its charter
WAATERFRONT PHILIPPINES, INCORPORATED
5. Province, country or other jurisdiction of incorporation
PHILIPPINES
6. Industry Classification Code(SEC Use Only)
7. Address of principal office
NO. 1 WATERFRONT DRIVE, OFF SALINAS DRIVE, LAHUG, CEBU CITY Postal Code 6000
8. Issuer's telephone number, including area code
(02) 559-0130
9. Former name or former address, if changed since last report
-
10. Securities registered pursuant to Sections 8 and 12 of the SRC or Sections 4 and 8 of the RSA
Title of Each Class Number of Shares of Common Stock Outstanding and Amount of Debt Outstanding
COMMON 2,498,991,753
11. Indicate the item numbers reported herein
-

The Exchange does not warrant and holds no responsibility for the veracity of the facts and representations contained in all corporate disclosures, including financial reports. All data contained herein are prepared and submitted by the disclosing party to the Exchange, and are disseminated solely for purposes of information. Any questions on the data contained herein should be addressed directly to the Corporate Information Officer of the disclosing party.

Waterfront Philippines, IncorporatedWPI

PSE Disclosure Form 4-26 - Legal Proceedings References: SRC Rule 17 (SEC Form 17-C) and
Section 4.4 of the Revised Disclosure Rules

Subject of the Disclosure

Receipt by WPI of the Decision of the Court of Appeals in the case entitled "SOCIAL SECURITY SYSTEM, Plaintiff-Appellant,
- versus - WATERFRONT PHILIPPINES, INC. (WPI), ETC, ET AL., Defendants- Appellees.
Background/Description of the Disclosure

This is an appeal from the Decision dated January 13, 2015 and Order dated May 11, 2015 of Branch 70, Regional Trial Court of Quezon City in Civil Case No. Q-04-52629 for a sum of money and damages.
Name of the court or agency in which the proceedings are pending COURT OF APPEALS
Date Instituted Jun 2, 2015
Docket Number CA-G.R. CV No, 104941
Principal Parties

SOCIAL SECURITY SYSTEM, Appellant

WATERFRONT PHILIPPINES, INC. (WPI), WELLEX INDUSTRIES INC. (WIN) and THE WELLEX GROUP, INC. (WGI), Defendants - Appellees.
Nature and description of the legal proceedings

SSS vs. WPI, Et al., Civil Case No. Q-04-52629 at Regional Trial Court, Quezon City. On October 28, 1999, WPI obtained a five-year term loan from SSS amounting to P375.00 million originally due on October 29, 2004. The SSS loan was availed to finance the completion of the facilities of WCCCHI. It was secured by a first mortgage over parcels of land owned by WIN and by the assignment of P200 million common shares of the WPI owned by TWGI. On August 7, 2003, when the total loan obligation to SSS, including penalties and interest, amounted to P605.00 million, WPI was considered in default with the payments of the loan obligations, thus, on the same date, SSS executed a foreclosure proceeding on the mortgaged parcels of land. The SSS's winning bid on the foreclosure sale amounting to P198.00 million was applied to penalties and interest amounting to P74.00 million and P124.00 million, respectively. In August 2004, the redemption period for WPI, WlN and TWGI expired. WPI, at various instances, initiated negotiations with the SSS for restructuring of the loan but was not able to conclude a formal restructuring agreement.

On January 13, 2015, the RTC of Quezon City issued a decision declaring null and void the contract of loan and the related mortgages entered into by WPI with SSS on the ground that the officers and the SSS are not authorized to enter the subject loan agreement. In the decision, the RTC of Quezon City directed the Company to return to SSS the principal amount of loan amounting to P375.00 million and directed the SSS to return to the Company and to its related parties titles and documents held by SSS as collaterals. On January 22, 2016, SSS appealed with the CA assailing the RTC of Quezon City decision in favor of WPI, et al. On September 6, 2016, a resolution for possible settlement was received by WPI from the CA. However, on February 7, 2017 a Notice to Appear dated December 7, 2016 was received by WPI from the Philippine Mediation Center Unit–Court of Appeals (PMCU-CA) directing the Parent Company and SSS to appear in person and without counsel at the PMCU-CA on January 23, 2017 to choose their mediator and the date of initial mediation conference and to consider the possibility of settlement. Since the Notice to Appear was belatedly received, the parties were not able to appear before the PMCU-CA. A Second Notice to Appear issued by the PMCU-CA but WPI failed to appear as it was received after the specified time of the meeting. On June 30, 2017, a resolution issued by the CA, resolved to submit the appeal for decision.

On 30 August 2019, the Court of Appeals issued its Decision reversing the RTC's Decision dated January 13, 2015 and Order dated May 11, 2015. The CA declared that the October 28, 1999 “Contract of Loan with Real Estate Mortgage and Assignment of Shares with Option to Convert to Shares of Stock'' and the extra judicial foreclosure sale of the Green Meadows properties covered by Transfer Certificate of Title Nos. N-153395 and N-153396 are valid.

The CA ordered WPI to satisfy the deficiency under the October 28, 1999 "Contract of Loan with Real Estate Mortgage and Assignment of Shares with Option to Convert to Shares of Stock'' in the sum of P841,567,136.85 due to SSS as of April 30, 2010. This obligation shall earn the stipulated interest and penalty charges, in accordance with the terms and conditions of the October 28, 1999 "Contract of Loan with Real Estate Mortgage and Assignment of Shares with Option to Convert to Shares of Stock", computed from April 30, 2010 until finality of the Decision.
The effect(s) on the Issuer's business or operations, if any

None.
Other Relevant Information

WPI will move for the reconsideration of the Decision or elevate the matter to the Supreme Court.
Filed on behalf by:
Name Arsenio Alfiler, Jr.
Designation Assistant Corporate Secretary