MANILA, Philippines - The parcel of land in Imus Estate was crucial to Adelfa Properties and to the entire Villar Group since this was part of what was then a pending financial transaction with another property company, Ayala Land.

At that time, Villar’s real estate companies were burdened with heavy debts as a repercussion of the 1997 Asian financial crisis. Villar’s companies, including the former flagship company, Camella & Palmera Homes could not pay debts that peaked at P12.28 billion in 2001.

Villar’s companies resorted to payment-in-kind arrangement, or dacion en pago in industry parlance. They were using real estate assets to pay for the mounting obligations.

According to a labor complaint filed by Restituto Mendoza, a Villar firm lawyer who was dismissed, a dacion-en-pago was arranged to settle some P300 million loans of the different real estate companies of Villar with Ayala Land.

An independent confirmation with banking industry sources, however, revealed that the Villar group of real estate firms defaulted on a loan with Bank of the Philippine Islands (BPI), a sister company of Ayala Land. The pending dacion-en-pago deal involved using properties of the Villar Group to settle the loans with BPI, which would then turn over these properties to Ayala Land.

The Villar group has lined up the Imus Estate property in the Ayala Land-BPI deal.

“Adelfa (Properties) could not afford to lose this case,” Mendoza wrote in his labor complaint.

However, a complainant in the land case involving the Imus Estateproperty alerted Ayala Land.

Ayala Land then warned Adelfa Properties that it will be constrained to rescind the dacion-en-pago agreement if the land case was not settled.

Other documents we gathered confirmed that the Villars had a transaction with the Ayala group that were covered by real estate mortgages. There was also a sale and purchase agreement between Yuchengco-led RCBC Saving Bank and Capitol Development Bank, which is the banking arm of the Villar group.

RCBC Savings was then acquiring assets of Capitol Development Bank, including its 57 branches. Part of the conditions of the RCBC-Capitol Bank deal was: "A duly executed copy of the letter agreement between Ayala Land, Fine Properties, and the Spoused Manuel B. Villar Jr. and Cynthia A. Villar, to be conformed to by the Buyer, in respect of certain properties covered by the real estate mortgages securing certain loan accounts..."

Fine Properties and Adelfa Properties are both part of the Villar group of real estate firms.

We sent several emails and text messages to Ayala Land officials to ask confirmation about its warning to Adelfa Properties and how the dacion-en-pago transaction went. As of this posting, we have yet to receive a reply. - With reports and additional research from Ma. Althea Teves and Purple Romero, abs-cbnnews.com/Newsbreak