HGC compromise deal with R-II nixed

Why compromise when you’re winning?

The lawyer of the state-owned Home Guaranty Corp. (HGC) reacted sharply when lawmakers attempted to broker  a compromise deal between the agency and private contractor R-II Builders on the failed Smokey Mountain Development and Reclamation Project (SMDRP).

Why, said lawyer Dexter Lacuanan, were some members of the House subcommittee on housing forcing him to compromise with Reghis Romero’s R-II Builders when he was winning his cases for the government?

In an interview with Inquirer after the hearing, Lacuanan, head of HGC’s litigation department, scoffed at the proposal of R-II Builders to reimburse HGC billions of pesos for its guaranty exposure, saying, “Why would I compromise if in the end I win, I get everything?”

“I’m willing to compromise if I’m losing,” he said. That’s why they’re offering that. They’re losing the cases,” he huffed.

“Now a congresswoman says, ‘you come to an agreement,’  Lacuanan said, referring to A Teacher party-list Rep. Julieta Cortuna, who, during the meeting, blamed HGC for “sitting” on the mediation effort.

HGC and R-II Builders, along with the Social Security System (SSS) and the National Housing Authority, have been compelled by the House subcommittee to return to the negotiating table after being locked in at least 12 pending court cases for more than a decade.

The subcommittee, chaired by Ako Bicol party-list Rep. Rodel Batocabe, is looking into the mediation proceedings among the parties in the SMDRP fiasco because the government is reportedly losing half a million pesos a day in interest payments alone as a result of HGC’s pending obligations to SMDRP creditors.

During the hearing, R-II Builders executive vice president Jerome Canlas reiterated his company’s willingness to end the legal disputes by reimbursing HGC for its guaranty exposure as well as settling its obligations to the SSS.

Canlas did not mention a figure, but Romero, the R-II Builders chair, said in July last year that the offer could go as high as P5 billion “if justified” by valuation, although he doubted it would reach that much.