Aifos proposes paying buyers back in 10 years’ time

The Aifos real estate group has outstanding debts of 500 million euros in amounts owed to 5,000 creditors, of which approximately 1,000 are property buyers whose homes never materialised. Now a deal has been proposed that would allow them to recover at least part of their investment.

At present debts and court cases are all that is left of the real estate group that rode the wave of construction boom and became a leading developer with 80 projects along the Mediterranean coastline and with offices in London, Dublin and Munich.

This success story though came to an abrupt end when owner Jesús Ruiz Casado was named among the accused in the Malaya corruption case. Then came the crisis that resulted, in July 2009, in the biggest ever bankruptcy case affecting an Andalusian firm.

While the administration process continues to clog up Malaga’s Mercantile Court, Aifos has taken a step forward in an attempt to reach an agreement with creditors and keep the firm afloat. In return, though, affected customers would have to give up a significant chunk of the amount owned.

According to the proposal made by Aifos the buyers of properties that were never built and unpaid suppliers would only get 45 percent of the money owed, in six annual instalments, starting in ten years’ time.

The alternative would be the total liquidation of the firm. Funds raised from the sale of its assets would be used to pay off creditors in order of priority. This leaves property buyers near the back f the queue behind the banks, the taxman, the social security and employees.

To go ahead the agreement would require the consent of 50 percent of creditors. Company sources say that they have contacted half of the 5,000 individuals and firms owned money and around 60 percent seem favourable to the offer. Many have been hard to reach, they claim.

One lawyer, representing approximately 30 buyers, has suggested that the remaining 55% owed to the buyer be paid in company shares, which could make the deal viable for many. That way they could at least stand the chance of recouping their money in the long term.

In either case, if you are a Aifos property buyer and have not been contacted, get your legal representative to contact them now.

Andrew Bellés

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