Project Oakmont: Secured Takeout & Litigation Funding Opportunity

1. Investment Thesis

Project Oakmont is presented as a structured litigation-finance opportunity rather than a rescue financing. The funder participates in a recovery case while holding a secured position over hard assets, with contractual controls designed to prevent the litigation from being undermined by immediate enforcement risk.

2. Situation Overview

The Borrowers executed a PHP 20 million secured facility with the incumbent lender in or around the first quarter of 2026. The facility was secured by a residential condominium unit in the National Capital Region. The loan was advanced in two stages: an initial PHP 4 million advance before full title perfection, followed by the balance after the lender obtained the title from an alternative commercial bank.

The Borrowers assert that the facility was not presented as a cold, fixed, fully disclosed PHP 20 million loan. They allege that the loan was marketed as part of a project-completion pathway connected to advanced fuel product development, raw material procurement, production scaling, and downstream institutional project opportunities.

The alleged inducement package includes:

• a promised facility increase of approximately PHP 5–8 million after three months of good payment history;
• an advance of PHP 4 million before full title release;
• representations concerning institutional assistance and access to development-finance channels;
• representations that post-dated checks were only for collection facilitation;
• an arrangement that delayed presentment could be managed through short notice and a modest holding fee.

The Borrowers state that they made three months of good payments, paid amounts related to the advance, and applied a substantial portion of the loan proceeds to bulk raw materials for commercial sample production. They allege that the promised completion increase was not provided, causing the production pathway to stall, a product supply arrangement to be cancelled, and downstream institutional project proposals to lose momentum.

The lender subsequently terminated prior accommodation, asserted unpaid interest for two months, demanded quarter-end compliance, retained post-dated checks, and requested broad confidential records of non-borrower technology entities. A detailed written compliance grievance allegedly received only a non-substantive emoji response from the lender’s compliance function.

3. The Constraint Being Solved

The recovery case may have meaningful value, but its current presentation is constrained by immediate enforcement risk. The proposed facility solves that constraint before litigation is escalated.

4. Proposed Facility Architecture

The transaction is proposed as a two-tranche facility with a simultaneous escrowed closing designed to eliminate residual enforcement risk before litigation proceeds.

Tranche A — Takeout Facility

Up to PHP 24–26 million, subject to verified payoff, to discharge the incumbent lender’s secured claim and neutralize enforcement risk.

Borrower Protections

• no monthly cash amortization during litigation, unless separately agreed;
• enforcement standstill during litigation, except for fraud, material breach, abandonment, or unauthorized settlement;
• repayment primarily from settlement, judgment, refinancing, sale, or other Borrower funds;
• limited recourse, where negotiable, beyond the collateral and litigation proceeds;
• no funder right to force sale during litigation absent material default;
• no funder right to demand unrelated technology-entity corporate records.

Tranche B — Litigation Funding Facility

Up to PHP 5–10 million, drawn as needed, to fund the recovery workstream.

• Philippine counsel fees;
• regulatory administrative complaint and engagement;
• civil action for damages, declaratory relief, accounting, and injunction where appropriate;
• emergency injunctive relief, if residual payment-instrument or foreclosure risk exists;
• expert reports;
• document retrieval;
• bank and notarial records;
• mediation and settlement process;
• enforcement of judgment or settlement.

5. Security and Collateral Profile

The collateral structure is central to the investment case. The funder is not relying only on the litigation outcome. The funder also obtains a secured position in a hard asset with meaningful equity coverage, subject to clean title and proper registration.

6. Evidence and Verification Protocol

This initial memorandum is anonymized for confidential outreach. Live URLs, property identifiers, counterparty names, project microsites, and underlying transaction documents are not included at this stage.

Under a customary non-disclosure agreement, the Borrowers can provide a staged evidence package, including:

• dated screenshots of the collateral microsite and marketing history;
• property photographs and location materials;
• the incumbent lender’s appraisal reference and related loan documents;
• title and Registry of Deeds records, subject to counsel review;
• project-pathway microsites and technical proposal materials;
• counterparty correspondence relating to the advanced-energy research pathway;
• draft institutional project proposals and submission materials;
• product-supply agreement cancellation correspondence;
• purchase-order documentation;
• raw-material procurement records;
• production-completion cost estimates;
• payment records, post-dated check inventory, holding-fee evidence, and compliance grievance correspondence.

7. Litigation and Recovery Drivers

The recovery case is supported by documentary and structural indicators that extend beyond ordinary borrower distress. The following drivers are relevant to both civil damages and regulatory exposure.

A. Alleged Misleading Inducement

• Promise of a PHP 5–8 million facility increase after three months of good payment;
• Borrowers allegedly satisfied the condition;
• Promise allegedly invoked in later meetings and not disputed;
• Borrowers had an existing relationship with an alternative commercial bank on allegedly better terms.

B. Advance-Before-Title Structure

• PHP 4 million advanced before full title release;
• supports the assertion that the facility was marketed as flexible project-completion financing, not a rigid standard loan.

C. Payment-Instrument Administration

• Post-dated checks allegedly not stipulated in the note;
• allegedly represented as collection facilitation;
• hold request for a July check;
• bank transfer of approximately 25% of face value;
• alleged holding fee of approximately PHP 125,000;
• July interest payment of approximately PHP 184,000.

D. Disclosure Defects

• incomplete Truth in Lending disclosure statement;
• unticked interest computation boxes;
• blank method of computation;
• blank collateral description;
• nominal versus effective rate inconsistency;
• notarial fee charged despite Borrowers’ recollection of no personal notarization.

E. Oppressive Standard-Form Clauses

• purported waiver of privacy and consumer protection rights;
• disclosure to relatives and funding partners;
• subjective default triggers;
• irrevocable power of attorney to sell;
• release-on-settlement language;
• self-help possession, ejection, and private sale provisions.

F. Compliance Failure

• initial written grievance: no substantive response;
• supplemental grievance: only non-substantive emoji response;
• raises institutional complaint-handling concerns.

8. Commercial Pathway and Lost Opportunity Evidence

The loan was not presented as a consumption facility. According to the Borrowers, it was connected to a production and commercialization pathway involving aviation fuel commercial samples, raw material procurement, product supply discussions, purchase-order documentation, and downstream institutional project proposals.

The Borrowers’ ability to mature and submit downstream institutional project proposals was materially impaired because the promised completion financing was not provided and the production demonstration pathway stalled. The following contemplated submissions are relevant as evidence of lost commercial and project-finance opportunity, subject to documentary verification and NDA-level disclosure.

Additional commercial-pathway evidence includes:

• raw materials purchased using loan proceeds;
• product supply arrangement cancelled after disclosure of inability to complete production;
• a USD 300k-scale purchase order issued by the UK sales entity to the Philippine production entity;
• delivery directed to a UK research location;
• shipment scheduled for the following year, demonstrating that the pathway was real but not immediately monetizable.

The purchase order is not represented as an unconditional end-buyer receivable, immediate liquidity, or a promise of repayment by the lender’s demanded quarter-end date. It is evidence of a commercial pathway that was documented, negotiated, and disrupted.

9. Claim Architecture

The litigation package may include the following components:

Corporate claims involving the Philippine production entity and the UK sales entity can be separated, assigned, or authorized as needed, preserving corporate separateness. The funder should not receive broad corporate records unless lawfully necessary and protected by confidentiality or court process.

10. Settlement Logic

The incumbent lender or its parent may have rational incentives to settle because:

• litigation exposes standard-form loan documentation;
• regulatory scrutiny may extend beyond this account;
• payment-instrument administration may be difficult to defend;
• compliance handling may appear inadequate;
• the Borrowers’ residential property, age, and health create equitable pressure;
• settlement may be cheaper than multi-forum defense.

11. Risk Matrix and Mitigants

12. Conditions Precedent and Closing Mechanics

Funding should be conditioned on:

1. satisfactory title due diligence;
2. verified lender payoff amount;
3. lender payoff letter requiring instrument return/cancellation and mortgage release;
4. escrow agreement;
5. Borrowers’ execution of mortgage/funding documents;
6. corporate authorizations, if technology-entity claims are included;
7. legal opinion on enforceability and regulatory compliance;
8. no undisclosed liens, foreclosure notices, or criminal complaints;
9. insurance over collateral;
10. independent legal advice to Borrowers;
11. confidentiality, export-control, data-privacy, and corporate-authority review for sensitive project documents.

Escrowed Simultaneous Closing

The takeout should not be released except through escrow against delivery of:

• payoff confirmation;
• original post-dated checks or written cancellation instructions;
• mortgage release documents;
• quitclaim and waiver of claims;
• no-collection undertaking;
• authorization to cancel mortgage annotation; and
• delivery or release of title documents where applicable.

13. Indicative Timeline

14. Requested Terms

Indicative Waterfall

1. Taxes and mandatory third-party costs.
2. Approved litigation expenses.
3. Takeout Facility principal, interest, and costs.
4. Funder litigation success fee: 20% of remaining Net Litigation Recovery, or negotiated tiered equivalent.
5. Balance to Borrowers.

15. Confidentiality, Verification, and Non-Admission Notice

This document is a confidential information memorandum prepared for discussion with prospective funders, legal advisers, and financial advisers. It is not legal advice, tax advice, investment advice, or a binding offer. All allegations are subject to verification, documentary support, and review by admitted Philippine counsel.

Any funding, security, mortgage assignment, litigation funding, claim assignment, escrow, release, or settlement structure must be implemented only after Philippine counsel confirms enforceability, regulatory compliance, champerty/maintenance risk, data privacy, corporate authority, title registration, taxation, and criminal exposure mapping.

Certain names, identifiers, addresses, facility numbers, counterparties, and documents have been anonymized for initial distribution. Full identities, executed documents, correspondence, payment records, title records, and commercial-pathway evidence can be made available under a customary confidentiality agreement and subject to counsel review.

Nothing in this memorandum admits the validity or enforceability of the loan, mortgage, any disputed clause, any asserted default, any interest, penalty, fee, holding charge, acceleration, foreclosure right, or any balance claimed by the incumbent lender. All rights and remedies are reserved.