Developer Aifos Files for Voluntary Receivership

Raymundo Larraín Nesbitt, July, 30. 2009

Rumours were confirmed last Wednesday 22nd of July when Aifos’ petition to file for receivership was formally accepted by Malaga’s Mercantile court number one. On the following day Aifos issued a press release by which it informed they had filed for voluntary receivership.

As we had previously pointed out in prior communications, filing for administration does not equate to bankruptcy as has mistakenly been reported at large e.g. In Spain’s highest profile administration procedure to date, involving well-known developer Martinsa-Fadesa, this company will restructure its 7 billion euro debt and will continue trading normally within the next years.

What developer Aifos has sought is for creditor protection allowing it to buy time to restructure its financial commitments. However, the mercantile judge ruling on the matter may ultimately decide at a later stage that Aifos should file for bankruptcy if it is deemed not to be able to continue trading. This will be decided upon in the ensuing procedure.

As from the time the official announcement is published in Spain’s Official Law Gazette (B.O.E.), creditors will have a deadline of one month to join Aifos’ Creditor's list. (EDIT: Today 31st of July it has been officially published)

Off plan purchasers may fall in any one of these three categories:

Purchasers that signed a Private Purchase Contract and have not had their off plan dwelling delivered.
Purchasers who had already withdrawn from their Private Purchase Contracts and had filed a lawsuit with no final ruling issued yet.
Purchasers who had litigated already and had a final ruling on their case but had not been refunded yet.

As a general rule everyone who purchased a non-delivered property through developer Aifos, whether having litigated or not, should retain a lawyer (and court agent) to join the Creditors’ list and/or litigate. The difference between cases is on their rights (i.e. those with final rulings will be labelled as “ordinary” creditors which lands them higher above on the Creditors’ ladder). Notwithstanding the above, all three cases will be considered as non-secured creditors.

Purchasers will have to liaise with their existing legal representative or else appoint a solicitor to either join the Creditors’ list and/or litigate. Once the receivership has been accepted trials will now be heard only at Malaga’s Mercantile court number one unlike before in which it was actually Civil courts that passed judgement on cases involving Aifos.

Appointed lawyers will seek to best defend their client’s interests in the ensuing procedure taking the following actions amongst others:

Claiming from the judicial administrators the creditors’ position of the clients submitting all the necessary documents on time and in the due manner. To challenge adopted resolutions on the matter if proven detrimental to the inclusion in the Creditors’ List.
Continued monitoring of the receivership procedure ensuring client’s rights are upheld.
To negotiate with the judicially-appointed administrators reaching agreements as necessary.
To keep the client informed on the ongoing procedure.
Assisting to Creditors’ meetings to defend the client’s interests.
To claim or challenge judicially agreements taken by Malaga’s Mercantile Court.

We will be sending this week to all our Aifos’ clients a detailed newsletter informing them of the legal situation and the available options available to them. This newsletter will also be available to non-clients upon request.

If you have purchased a non-delivered property through Aifos and wish to receive further information on this matter, please contact us free of compromise. One of our lawyers will contact you to explain clearly your legal options.

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