Mondragon asks SC to stop Mimosa bidding

Mondragon International Philippines Inc. (MIPI) has asked the Supreme Court to stop the ongoing bidding of the Mimosa Leisure Estate in Clark, Pampanga by the state agency Clark Development Corp. (CDC).

MIPI, together with subsidiaries Mondragon Leisure and Resorts Corp. and Mondragon Securities Corp., are seeking the issuance of a temporary restraining order (TRO) on the sale of the Mimosa complex.

"Petitioners are constrained to file the instant motion in view of the fact that respondents are continuing the questioned bidding of the leisure estate despite knowing the pendency of an earlier petition," MIPI said.

MIPI said it was informed that CDC had already prequalified the bidders and are proceeding with the submission and opening of bids. It was also informed that the bidding would be concluded by the middle of March this year.

The Mondragon group said the parties should be ordered to maintain the status quo until such time that the SC has heard the parties or resolved the case.

In contesting the sale, the Mondragon group alleged that the terms and conditions of the bidding are manifestly and grossly disadvantageous to the government.

Under the terms of reference of the questioned bidding, CDC referred to an appraisal report dated July 19, 1999 prepared by Asian Appraisal Co. Inc. which grossly undervalued the Mimosa Leisure Estate at a fair market value of P2.76 billion only and reproduction cost of P3.14 billion only as of June 16, 1999.

However, in the appraisal report dated Oct. 14, 1998, the Valencia Appraisal Corp. appraised the buildings and improvements, including machinery, equipment, furniture and the 36-hole golf course inside the estate as having a fair market value of P6.85 billion as of July 16, 1998.

"The variance in the two appraisals conducted 11 months apart amounts to a staggering P3.35 billion in fair market value and P3.69 billion in reproduction cost," the Mondragon group said.

MLRC, which is into leisure and gaming, operates the Mimosa estate which features among others a 36-hole championship golf course, a 304-room five-star hotel, various deluxe furnished villas and a gaming casino.

Since Dec. 1999, however, the government through CDC, has taken over management and operations of the said property after securing a favorable court order over its dispute with MLRC’s non-payment of tax and rental fees worth about P325 million as well as reported violations of several terms and conditions for the lease contract.

Although MLRC has filed a counter suit still pending with the courts, it has been in active negotiations with CDC for the resolution of rental issues, a principal component of which is the entry of new investors to bring in fresh equity into MLRC to settle its government obligations and restructure its P7-billion debts owed to a consortium of bank creditors.