Philippine Realty and Holdings Corporation

December 7, 1998 PSE CIRCULAR FOR BROKERS NO. 2720-98 SUBJECT : Philippine Realty and Holdings Corporation In reply to the Exchange's request for confirmation of information with regard to a Complaint filed by Philippine Realty and Holdings Corporation ("PHILREALTY") in Civil Case No. 67092, entitled " Philippine Realty and Holdings Corporation vs . DMCI Project Developers, Inc . , Universal Rightfield Property Holdings, Inc . and Universal Leisure Corporation ", PHILREALTY, in a letter dated December 3, 1998, stated that: ". . . PHILREALTY confirms that it filed with the Regional Trial Court of Pasig City, Civil Case No. 67092, entitled "Philippine Realty and Holdings Corporation vs. DMCI Project Developers, Inc.". . . . . . Briefly, the said case was filed by PHILREALTY to recover the balance of the purchase price for several condominium units sold to Universal Leisure Corporation (ULC) (please refer to Annexes "B", "C" and "D" of the Complaint). ULC has unjustly refused to pay its due and demandable obligations now totaling to around P65,000,000.00, including interests, claiming instead that DMCI Project Developers, Inc. (DMCI) and Universal Rightfields Holdings, Inc. (URPHI) assigned to it a certain credit in the amount of around P42,000,000.00, which amount, in turn, is due from PHILREALTY. Following their reasoning, PHILREALTY allegedly owe DMCI and URPHI around P42,000,000.00 as its share of expenses incurred in the Joint Venture Agreement executed sometime December, 1996 (please refer to Annex "A" of the Complaint). The contention is that when DMCI and URPHI assigned to ULC this credit due from PHILREALTY, a partial set-off has occurred between ULC and PHILREALTY such that ULC's obligation to PHILREALTY has been reduced to around P13,500,000.00 (please refer to Annex "F" of the Complaint). Regrettably, despite admitting that it owes PHILREALTY the sum of P13,500,000.00, ULC still refuses to pay this amount. However, under the clear and unambiguous terms and conditions of the Joint Venture Agreement, PHILREALTY does not owe DMCI and URPHI anything. As such, DMCI and URPHI have nothing to assign to ULC, and there being no assignable credit, ULC should have paid the balance of the purchase price for the condominium units bought from PHILREALTY. Left with no other alternative vis-a-vis the stance taken by DMCI, URPHI, and ULC, PHILREALTY was constrained to file the said civil case to annul and/or declare as void ab initio the assigned of credit made by DMCI and URPHI to ULC, it having been made to evade the payment of a just and valid obligation, and to recover the balance of the purchase price for the condominium units sold. As to the disposition made by PHILREALTY of its 5,090 square meter property, . . . Such disposition did not violate any law. Further, contrary to the insinuation made by URPHI in its disclosure letter, it is not true that said property has been contributed to the partnership as PHILREALTY, DMCI and URPHI had long agreed to dissolve the joint venture agreement. . ." A copy of the Complaint with its Annexes is available for reference at the PSE Library. cd For your information. (SGD.) JOSE LUIS U. YULO, JR. President and CEO