QC court rules in favor of GMA-7 in case vs BPI

The Quezon City Regional Trial Court has ruled in favor of GMA Network Inc. in connection with a damage suit filed by the broadcasting firm against BPI Family Bank after BPI refused to extend credit facility to the Network covered by a loan agreement. In a disclosure to the Philippine Stock Exchange, GMA Network said Branch 85 of the QC-RTC ordered BPI to pay GMA Network the sum of P2 million for temperate damages, P3 million for exemplary damages, and P500,000.00 for attorney’s fee. The court ruled that BPI violated its contract with GMA in bad faith when it refused to release the amount of its pro-rated share under the an agreement dating to November of 2000. The court decision stated that BPI cannot evade the agreement with the excuse that it has not agreed to the extension of the commitment period. The court agreed with GMA that the commitment period was validly extended since more than half of the lenders have given their consent to the request. “To be sure, the action of the Majority Lenders shall in each case bind all the Lenders", GMA quoted the court as saying. The agreement in question was entered entered into by GMA with Restated Mortgage Trust Indenture with various banking institutions, including DBS. DBS was subsequently acquired and absorbed by BPI in 2001 and assumed all interests and obligations of DBS under the Omnibus Agreement In the following year GMA requested its creditors for an extension of the commitment period. Equitable PCI, the facility agent, informed GMA that thirteen (13) Lending Banks representing 59.47% of the aggregate advances agreed to the extension of the commitment period. However, on February 4, 2002, BPI informed GMA of its intention not to extend its commitment. Despite its refusal to extend the commitment period, however, BPI accepted the commitment fee paid by GMA. GMA made a final drawdown on the credit facility under which BPI was supposed to release the amount of P31,315,789.00 representing its share but BPI refused to release the amount. A notice of default was sent by Equitable-PCI to BPI but BPI reiterated its refusal to release its share of the loan. BPI alleged that it was bound to release its share in the drawdown only if it agreed to extend the commitment period. It said that its receipt of the commitment fee was due to inadvertence. Moreover, it claimed that the commitment fee was returned to GMA. GMANews.TV is the official website of GMA News and Public Affairs, a unit of GMA Network Inc. - GMANews.TV