Spanish Off-Plan Property - Bank Guarantees - LEY 57/68

PRESS / MEDIA RELEASE - FOR IMMEDIATE RELEASE

FINCA PARCS ACTION GROUP vs CAJA DE AHORROS DEL MEDITERRÁNEO (CAM BANK) & SPANISH DEVELOPER, CLEYTON GES SL

REPORT ON THE ‘TRIAL OF THE YEAR’ IN HELLÍN

70 GROUP MEMBERS GATHERED IN HELLÍN FOR A TRIAL DESCRIBED IN THE LOCAL PRESS AS “THE TRIAL OF THE YEAR” (EL JUICIO DEL ANO) AND “ONE OF THE LARGEST AND MOST COMPLEX TRIALS EVER HELD IN HELLÍN”

FINCA PARCS ACTION GROUP

●  No legally required Bank Guarantees for Off-Plan deposits totalling 1.5 million Euros
●  Lawsuit against CAM Bank & developer Cleyton GES SL filed in February 2011

●  First Instance Court Preliminary Hearing held on 12 January 2012
●  Trial commenced Monday 21 May 2012

OUR MISSION

To recover our Off-Plan Deposits paid in good faith to Cleyton GES SL & Caja de Ahorros del Mediterráneo (CAM Bank), which according to Spanish Law, in particular, LEY 57/68 Article 1.2, "must be deposited in a Special Account, with separation from any other funds belonging to the promoter, which may only contain funds deposited for the construction of dwellings.  For the opening of these accounts or deposits the Banking institution or Savings bank (in this case CAM Bank), under its responsibility, will demand the bank guarantee to which the previous condition (Article 1.1) refers”.

FINCA PARCS ACTION GROUP GATHER IN SPAIN

70 members of the Finca Parcs Action Group arrived in Hellín on Sunday 20 May after being called to appear in person by CAM Bank – one of the co-defendants in Hellín’s ‘Trial of the Year’.

First stop for the group was a visit to the Las Higuericas Finca Parcs development which was abandoned in 2009 by Spanish property developer Cleyton GES SL, the other defendant in the trial.

THE EVE OF THE TRIAL

The trial scheduled to last 4 days commenced on Monday 21 May 2012 in the First Instance Court in Hellín following the filing in February 2011 of a 1000 page Lawsuit against property developer Cleyton GES SL and the sole financial entity of the project, Caja de Ahorros del Mediterráneo.  The Lawsuit was filed in order to recover 1.5 million Euros of off-plan deposits paid to CAM Bank between 2005 and 2007 by FINCA PARCS ACTION GROUP members, in relation to their Sales Contracts for the Las Higuericas Finca Parcs development.

On the eve of the trial Juan Munoz, the lawyer representing developer Cleyton GES SL explained that:

“Cleyton GES SL is now in negative equity caused by different factors including lack of support from the financier of the project, CAM Bank”.  Munoz says that although they will continue fighting for the ‘continuation of the project’, the current economic situation means they cannot fund the completion of infrastructure works or to fulfil the agreement with the Hellín Town Hall.

For this reason, he added, Cleyton GES decided “to seek a partnership formed with several partners and companies with a proven financial solvency and extensive experience in the construction sector”.

Cleyton GES also regret that, “CAM did not want to discuss the future of the project and therefore does not have any respect for the rights of the buyers.  Cleyton GES hoped to expose those company representatives and despite everything hoped to reach a negotiated solution with “all sides lowering their claims to obtain an overall benefit”

In response, Keith Rule, co-ordinator of Finca Parcs Action Group stated: “We have suffered extreme stress and heartache over the past 5 years due to the actions of Cleyton GES and CAM Bank.  We were promised a dream of owning a house in an idyllic location in a natural park with a lake, however that dream has turned into a nightmare.  It is clear the project will never succeed while Cleyton GES and CAM are involved.  They are unable to work together and we are the victims of their negligence, deception and illegal use of our off-plan deposits.  We want nothing more than what is our inalienable legal right granted by Spanish Law, LEY 57/1968 which is a full refund of our deposit together with legal interest and costs”.

PROTEST

At 9:30am on Monday 21 May, 70 members of the Finca Parcs Action Group held a peaceful demonstration outside the CAM Branch on the Gran Via in Hellin.  They held banners and placards demanding the return of their money and calling for the law guaranteeing these amounts to be enforced.  The banner also quoted the words of the Bank of Spain Governor which described CAM as ‘Scandalous’ and ‘The Worst of The Worst’.

PROTEST OUTSIDE CAM BRANCH ON GRAN VIA IN HELLIN

From there they marched in an orderly manner to Hellin’s First Instance Court where they held a further peaceful protest prior to the commencement of the trial.

THE TRIAL – DAY ONE

The trial began at 10:45 with the presiding judge Consuelo Romero.  The claimants, members of Finca Parcs Action Group were represented by Jaime de Castro.  The defendants were represented by Pablo Toran for CAM Bank and Juan Munoz for Cleyton GES SL.

The first session allowed each of the parties to state their position.  Although miles apart the positions are quite clear.  Finca Parcs Action Group consider that all the promotional material and contracts confirm that the corresponding Bank Guarantees should have been issued by CAM as they did for other buyers in the project who had paid deposits to the same accounts.  As no house was delivered both defendants should be made liable.

For Cleyton GES SL, its current owner, Pedro Jimenez Penalver explained that the company he took over about 3 years ago intended to finish the work and deliver the houses.  He stated that he did not know what happened prior to his involvement in the company and therefore as the contracts subject to this litigation were signed between 2005 and 2007 he could not answer most of the questions put to him.  The most repeated phrase in his testimony was ‘I have no idea’.

OBLIVIOUS

In the case of CAM their argument was that they have honoured Bank Guarantees which they issued to some buyers, but they have no relationship with members of the Finca Parcs Action Group as they did not formalise a contract of guarantee with the Bank.

One issue that gained most attention during the session was that of Bank Accounts.  CAM’s Lawyer insisted that, by law, the amounts paid in advance for off-plan property should be deposited in a special account and the funds should be used exclusively for the building of the houses.  But he said that Cleyton GES operated 3 accounts at CAM, two of which were ordinary current accounts and that legally bank guarantees can only be issued on money paid to the special account.

However, Keith Rule, who testified for the victims insisted that they were told by Cleyton GES that the 3 accounts were special accounts and in fact 200 Bank Guarantees were issued to other buyers in the project who paid into the same bank accounts as members of the Finca Parcs Action Group.  Furthermore the 3 accounts were described as Cuenta Corriente Especial (Special Accounts) on each of the Bank Guarantees issued to other buyers.

Julian Herrera, asset manager of CAM, stated in his testimony that although the accounts may have been called ‘Special’ on other Bank Guarantees, the fact is that “there is only one special account for this promotion and the other two are just ordinary accounts”.  He explained that CAM did not receive a request for Bank Guarantees from any of the victims and said that although the Sales Contracts stated that the Bank Guarantees would be issued by CAM, this did not make CAM liable to issue them.

He also confirmed that CAM demanded repeatedly that Cleyton GES transfer buyer’s deposits from the ordinary accounts to the special account, to avoid prejudicing the buyers.  He stated that CAM was oblivious to the transactions going through the ordinary accounts.

Jaime de Castro, representing the members of Finca Parcs Action Group stated that although the Special Account was opened in November 2005 the account remained with a zero balance and was not used until June 2007.  However, by the time of the first credit into the Special Account on 13 June 2007, CAM had already issued Bank Guarantees to other buyers on the development during the period November 2005 to May 2007 which amounted in value to over 4.5 million Euros.

Of the three persons who testified during Monday’s session, the one who spoke most strongly was Keith Rule, the co-ordinator of Finca Parcs Action Group who himself paid more than 50,000 Euros to CAM.  With the help of a translator, he insisted that group members were encouraged to reserve at Finca Parcs due to the promise on all the promotional material and in the contract of Bank Guarantees issued by CAM, who at that time were described as the 4^th biggest savings bank in Spain.

But he added that despite repeatedly demanding the Bank Guarantees during 2007 from Cleyton GES SL nothing was forthcoming, only broken promises.  He demonstrated that in 2008 they demanded Bank Guarantees directly with CAM Bank via email to the CAM Manager, Fernando Martinez Hernandez at the Murcia Branch to which the money was transferred, however there was no response.  He explained that they then demanded the Bank Guarantees from CAM’s London office and that in January 2009 they had a 3 hour meeting with the London Manager, Aurelio Pedros who advised them to submit the complaint directly to the Alicante head office of CAM.  This they did in February 2009, however by the end of 2009 CAM denied any liability and they referred their complaint by email to Roberto Lopez Abad and Modesto Crespo, CAM’s CEO and President, respectively.  An email reply was received in the names of Lopez-Abad and Crespo; however this stated that ‘if you do not have a Bank Guarantee then you have no relationship with this entity’.

The Judge decided with the agreement of all parties that after hearing the testimony from one claimant it was not necessary to repeat a similar questioning of each of the buyers.  So the other 46 applicants did not have to testify.

THE SURPRISING OFFER “Would you accept a house from the ones that are built instead of money”
THE REPLY “We cannot trust any of you as we have been robbed and cheated for many years”

Juan Munoz, Lawyer for Cleyton GES, at one point in the interrogation of Keith Rule offered to the victims the possibility of existing houses instead of a refund.  Mr Rule was especially forceful in responding to this offer, as he said that Cleyton GES and CAM have ‘stolen the money’, lied ‘over and over again’ throughout the years, violated Spanish Law and its own promises therefore we cannot trust you anymore.

Jaime de Castro responded on behalf of the victims by saying, “Cleyton GES cannot offer these properties simply because they are no longer yours to offer”.  In his view the bank and developer have the “same level of responsibility” in this matter.

Pedro Jimenez Penalver, manager of Cleyton GES said that in Las Higuericas Finca Parcs, where he was planning to build more than 600 houses, that after 7 years there are 73 houses finished, and ‘seventy-something’ to which only needed 10 to 15% more work to complete.  He also indicated that the urbanisation infrastructure is complete to around 75%-80%, and that the reason that no property has a Licence of First Occupation is because there was no way to solve problems such as the high tension electric cable which runs through the site for which Iberdrola should have carried out an environmental impact study and which was not done.  He also criticised the attitude of CAM who took possession of the houses “which were the property of others”.

QUOTES FROM DAY ONE

“FINCA PARCS ACTION GROUP” - Those affected say they have had enough of broken promises.  Their spokesman, Keith Rule, stated that they only want to enforce the Law and receive their money back that they paid for houses which were not delivered.

“CONFIDENCE IN SPANISH JUSTICE” – Keith Rule, one of the victims, who acted as spokesman for the Finca Parcs Action Group, together with their Lawyer Jaime de Castro insisted that they trust in Spanish Justice and that their legal rights will be upheld.  “The buyers, said de Castro, trust in the Spanish courts and I will also say that the Bank will respond if they are sentenced to do so.  Even in these times where there is so much distrust, to favourably resolve a case like this can be good for the image of Spain around the world”.

THE TRIAL – DAY TWO

On day two several witnesses appeared to testify and each of the three parties to this case delivered their conclusions.

THE LAWYERS

JAIME DE CASTRO for the FINCA PARCS ACTION GROUP
Calls for Cleyton GES and CAM to jointly refund the money

JUAN MUNOZ for Cleyton GES SL
He stressed that the firm is willing to continue the development

PABLO TORAN for Caja de Ahorros del Mediterraneo (CAM)
He claims that CAM has no direct relationship with the plaintiffs and owes nothing……

The trial of Las Higuericas Finca Parcs was completed on day 2, in half the time originally planned.

The plaintiffs, who claim their money was deposited in Cleyton GES accounts at the funding entity CAM, confirmed their evidence and must now wait for Judgment.

The three hours of Day 2 of the trial began at 10:30 with the witness testimony of Enrique Ros, representative of the company Lauara Europea SL (the company that has agreed to take over the obligations of completing the project).

Then ex-employees of Cleyton GES SL were called to testify.  The first being Antonio Jose Veas Arteseros, who worked for Cleyton GES from 2004 until April 2009.  He said that CAM was fully funding the project and fully endorsing and paying for everything relating to the urbanisation.  His involvement with the Bank Guarantees was to send an application to CAM for each of the contracts.

All the witness interrogations, except for that of Patricia Ramos Calderon, architect from the Hellin Town Hall, focussed on the CAM bank accounts to which the buyer’s deposits were paid.

Gerardo Cantore, sales manager of Cleyton GES from 2004 to 2009 revealed that in relation to the Bank Guarantees he went to the CAM offices in person with two lawyers, “because first CAM said one thing and then changed their criteria”

Ramon Ramiro Mauleon, another ex-employee of Cleyton GES from 2001 to 2009 said that “when he initially presented the project to several banks, CAM agreed to fund the project in totality.   Banks were queuing to fund the project”.

Fernando Martinez Hernandez, an employee of CAM confirmed that he was the business manager at the Branch in which the Cleyton GES accounts were operated.  He confirmed that CAM issued Bank Guarantees for deposits which were not necessarily paid to the special account.

When shown copies of several Bank Guarantees, many of which he had signed, from the 200 that CAM had issued on the development for deposits paid to the same accounts as those deposits paid by members of the Finca Parcs Action Group he said he did not know why this happened and why on each bank guarantee the 3 accounts were described as ‘Special Accounts’.

Furthermore, Fernando Martinez, when shown several bank account extracts, was unable to explain why CAM authorised many withdrawals from the Special Account, in complete contravention of the requirements of LEY 57/1968 including a cash withdrawal in excess of 80,000 Euros.

He added that none of the buyers ever demanded Bank Guarantees directly with CAM and that this issue was only managed between the developer and the buyers.

When questioned he ‘could not remember’ receiving emails from Keith Rule in 2008 demanding CAM to issue Bank Guarantees nor ‘could he remember’ ever seeing Keith Rule or any other buyers at his CAM Branch to demand the Bank Guarantees in person.

Patricia Ramos Calderon, municipal architect, who had visited the site, stated that according to the environmental impact Law of 2007, there was a requirement for the removal of the high tension electricity cable running through the development, which was the obligation of the developer and that no First Occupation Licences could be issued until this was done.

The final witness was a representative from the electric company, Iberdrola.  However, during the first question the Judge intervened to state that it was not necessary to question this witness as nothing he may say would affect the case.

After a break of 5 minutes, Jaime de Castro, Lawyer for the Finca Parcs Action Group delivered his conclusions in which he sated that “due to bad practices my clients have been harmed”.  He argued that the actions of the Bank and developer must not affect the buyers and that all 3 accounts were presented as special and that it was always understood that deliveries to these accounts must have the corresponding Bank Guarantees, by Law.

He stressed that the involvement of CAM in the project was so intense, something that he had demonstrated since the beginning, that Cleyton GES and CAM “should be condemned jointly and severally” to repay the sums paid by the purchasers that never received their homes.

CAM’s Lawyer, Pablo Toran, argued just the opposite.  He said Cleyton GES bore responsibility, accusing it of not fulfilling its commitments, especially when it came to handling money from the promotion in the special account and ordinary accounts.  He pleaded therefore that CAM be absolved of any liability in this case, insisting that the plaintiffs did not have any contractual relationship with CAM.

In his concluding speech Juan Munoz, Lawyer for Cleyton GES SL said that there are available sufficient financial means to continue with the urbanisation and to fix the problem of the high tension Iberdrola electric cable.  He opposed both the demands for contract cancellation and for refunds.  He insisted that Cleyton GES ‘wants to move on’…………..

The trial was completed in 2 days and now sentencing is awaited which in principle may be delivered within 20 days.

Following the conclusion of the trial, Keith Rule, co-ordinator of the Finca Parcs Action Group comments:

“Our relationship with CAM is not primarily derived from the contract, but from the Law, LEY 57/1968.  For the opening of the Special Accounts CAM must be vigilant.  CAM is responsible for ensuring that all payments to the promoter for the construction of housing is credited to the special accounts, without deviation.

CAM was the sole financial entity of the Las Higuericas Finca Parcs project and received all the off-plan deposits though it’s branch in Murcia.

We must not suffer any prejudice or harm due to the failure in the relationship between CAM and Cleyton GES SL nor as a result of CAM’s negligence and lack of due diligence particularly in respect of its complete failure to observe the requirements of LEY57/1968.

There has been a fraudulent use of our off-plan deposit money which amounts to 1.5 million Euros and CAM has been a party to this fraud over a 5 year period.

CAM failed to control, supervise or audit the activities of Cleyton GES and this is evidenced by the fact that they allowed and authorised illegal withdrawals from the Special Account.

There has been a complete failure by both defendants to observe Spanish Law, in particular LEY 57/1968.

In approximately 25 court judgements during the past 2 years Cleyton GES has been declared as ‘Whereabouts Unknown’.  However in this case, not only did they defend our Lawsuit but actually appeared in person at the trial.

We are the innocent victims of this corruption and we are confident that a verdict will be delivered condemning both defendants jointly and severally liable for the refund of our deposits, together with legal interest and costs.

Only then will it be possible for us once again to have trust and confidence in Spain.

I would like to thank all our group members who travelled to Spain at their own expense and who have, like me, suffered unnecessary stress and heartache over the past 5 years due to Cleyton GES SL and CAM Bank.

I also give thanks to our legal team without whom it would not have been possible to bring the defendants to trial.  Maria de Castro from Costa Luz Lawyers has been a tower of strength throughout the last 4 years both with the initial study of our case and with the continuing study of Case Law related to Banks liabilities according to LEY 57/1968.

Our litigator, Jaime de Castro, from De Castro Gabinete Juridico has worked tirelessly on this issue which we feel resulted in a very comprehensive Lawsuit and a very strong delivery of the facts and evidence at the trial.

Finally thanks to Hotel Emilio in Hellin who provided us with superb facilities and service throughout our stay in Hellin.  Our issues are not with the town or people of Hellin, but with the actions of Cleyton GES SL and Caja de Ahorros del Mediterraneo.

We now await the verdict with interest.



Note:  Additional reporting courtesy of La Verdad

NOTA DE PRENSA-  PARA PUBLICACIÓN INMEDIATA

FINCA PARCS ACTION GROUP vs CAJA DE AHORROS DEL MEDITERRÁNEO (CAM BANK) &  PROMOTOR ESPAÑOL  CLEYTON GES SL – 4  DÍAS DE JUICIO QUE COMIENZAN EL LUNES 21 DE MAYO DE 2012.

70 PERSONAS, MIEMBROS DE ESTE GRUPO, HAN SIDO LLAMADOS A  INTERROGATORIO  POR UNO DE LOS CO-DEMANDADOS, LA CAJA DE AHORROS DEL MEDITERRANEO

FINCA PARCS ACTION GROUP

●  Inexistencia de garantías para devolución de cantidades en compraventas sobre plano que hacen un total de 1,5 millones de euros.
●  Demanda contra  CAM Bank & promotor Cleyton GES SL interpuesta en Febrero de 2011.

●  Audiencia Previa celebrada el pasado 12 de Enero de 2012
●  Juicio programado para cuatro días que comienzan el 21 de Mayo de 2012.

NUESTRO OBJETIVO

Recuperar las cantidades que entregamos a cuenta de buena fe a Cleyton Ges SL y Caja de Ahorros del Mediterráneo (CAM), que, de acuerdo con el derecho español y en concreto la Ley 57/68, artículo 1.2 "deben depositarse en cuenta especial, con separación de cualquier otra clase de fondos pertenecientes al promotor y de las que únicamente podrá disponer para las atenciones derivadas de la construcción de viviendas. Para la apertura de estas cuentas o depósitos la entidad bancaria o Caja de Ahorros, (en este caso la CAM)  bajo su responsabilidad, exigirá la garantía a que se refiere la condición anterior (Artículo 1.1)”  

EL JUICIO

Un juicio de 4 días comenzará el próximo 21 de Mayo de 2012 en los Juzgados de Primera Instancia de Hellín, después de que la demanda fuese admitida a trámite en Febrero de 2012. La demanda, de 1000 páginas se interpuso contra el promotor inmobiliario Cleyton Ges SL y el Banco que financiaba las obras, Caja de Ahorros del Mediterráneo.  El objetivo de la demanda es recuperar las cantidades entregadas a cuenta a la CAM entre 2005 y 2007 por las personas integrantes de este grupo, en relación con contratos de compraventa en la promoción Las Higuericas Finca Parcs.

70 personas de este grupo tienen programado viajar, por sus propios medios desde diversas partes del Reino Unido e Irlanda para asistir al juicio de Primera Instancia que se celebrará en Hellín, habiendo sido convocados por el Juzgado a petición de uno de los co-demandados la CAM.

El Coordinador del Grupo, Keith Rule, manifestó: “Son derechos irrenunciables al amparo de la Ley 57/68, que nuestras cantidades se depositasen en una cuenta especial y que fuesen protegidas por avales bancarios individualizados. En contra de lo que establece la Ley española, el promotor Cleyton Ges SL junto con la CAM, que financiaba el proyecto y aceptó las entregas a cuentas de nuestras cantidades, incumplieron lo que establece la Ley”  

“Hemos estado pidiendo nuestros avales bancarios desde 2007 e incluso visitamos la sucursal de las CAM donde se transfirieron nuestras cantidades y las oficinas centrales de la CAM en Murcia y Londres, sin embargo, no dieron respuesta a nuestras reclamaciones. Finalmente, en 2009, antes de comenzar nuestras acciones legales dirigimos nuestra reclamación a Roberto López Abad y Modesto Crespo, Director General y Presidente de la CAM respectivamente. Nos contestaron por email diciendo: “Si no tienen aval, no tienen relación alguna con esta entidad”

“A pesar de abandonar el proyecto en 2009, ni el promotor ni la CAM nos devolvieron nuestro dinero. Durante los últimos tres años el promotor ha sido declarado en “paradero desconocido”. Es por ello por lo que no hemos tenido más remedio que embarcarnos en este batalla judicial tan lenta, costosa y estresante”.

Keith continua, “Ha sido un enorme ejercicio de logística concertar vuelos, alojamiento y traslados desde aeropuertos de los 70 miembros del grupo; sin embargo al día de hoy está todo organizado y estamos preparados para enfrentarnos al promotor y al Banco en el Juzgado. El Juzgado de Primera Instancia de Hellín es relativamente pequeño y deberá suministrar intérpretes y dispositivos especiales para gestionar el gran número de reclamantes llamados al interrogatorio”

INFORMACION GENERAL

Los miembros del Grupo pagaron sus cantidades anticipadas, un total de 1.5 millones de euros, entre 2005 y 2007 con cargo a la compra de propiedades en Las Higuericas Finca Parcs, transfiriéndolas a cuentas de la CAM a nombre del promotor Cleyton Ges SL.

Ningunos de los miembros de este grupo recibió las garantías bancarias que establece la Ley 57/68.

La promoción inmobiliaria de interior, cercana al pueblo de Agramón, está a 15 km de Hellín y a 80 km de Albacete y Murcia. A pesar el marketing que se desplegó durante un periodo de 5 años como promoción para la práctica del deporte y el tiempo libre, el promotor Cleyton GES SL abandonó el proyecto en Mayo de 2009 bajo la afirmación de que era “financieramente inviable”. La promoción con 617 parcelas divididas en 5 fases permanece en estado de abandono, habiéndose construido solo 50 propiedades de la Fase 1. De estas, y por problemas del terreno, ninguna tiene Licencia de Primera Ocupación.

BANCO DE ESPAÑA & CAJA DE AHORROS DEL MEDITERRÁNEO

En la rueda de prensa de Septiembre de 2011, el Gobernador del Banco de España Miguel Ángel Fernández Ordóñez calificó el comportamiento de los directivos de la CAM como de “escandaloso” y dijo que el Banco era “lo peor de lo peor”

La CAM  fue adquirida en 2011 por el Banco de Sabadell por el precio de un euro con las pérdidas siendo aseguradas por el Banco de España.

FALTA DE AVALES BANCARIOS- ENORME PROBLEMA EN ESPAÑA

La situación en la que se encuentran los miembros de FINCA PARCS ACTION GROUP es la misma en la que se encuentran muchos compradores sobre plano en España.

Más de 500 afectados por este mismo problema han enviado sus casos a la Petición que al respecto se lleva a cabo a través de este web: BANK GUARANTEES IN SPAIN website:  www.bankguaranteesinspain.com

Al día de hoy hay diversos pronunciamientos de Audiencias Provinciales ( Santander, Cantabria, Burgos, Alicante, Murcia etc.),  el Tribunal Superior de Justicia de Navarra y varias Sentencias de tribunales de Primera Instancia que han fallado a favor de compradores en esta misma situación de acuerdo con lo que establece la Ley 57/68.

PRESS / MEDIA RELEASE - FOR IMMEDIATE RELEASE

FINCA PARCS ACTION GROUP vs CAJA DE AHORROS DEL MEDITERRÁNEO (CAM BANK) & SPANISH DEVELOPER, CLEYTON GES SL – 4 DAY TRIAL TO COMMENCE ON MONDAY 21 MAY 2012

70 GROUP MEMBERS SUMMONED TO APPEAR IN PERSON AT THE TRIAL FOLLOWING A REQUEST TO THE COURT AT THE PRELIMINARY HEARING BY THE CO-DEFENDANT – CAM BANK.

FINCA PARCS ACTION GROUP

●  No legally required Bank Guarantees for Off-Plan deposits totalling 1.5 million Euros
●  Lawsuit against CAM Bank & developer Cleyton GES SL filed in February 2011

●  First Instance Court Preliminary Hearing held on 12 January 2012
●  Trial scheduled to last 4 days commencing on Monday 21 May 2012

OUR MISSION

To recover our Off-Plan Deposits paid in good faith to Cleyton GES SL & Caja de Ahorros del Mediterráneo (CAM Bank), which according to Spanish Law, in particular, LEY 57/68 Article 1.2, "must be deposited in a Special Account, with separation from any other funds belonging to the promoter, which may only contain funds deposited for the construction of dwellings.  For the opening of these accounts or deposits the Banking institution or Savings bank (in this case CAM Bank), under its responsibility, will demand the bank guarantee to which the previous condition (Article 1.1) refers”.

THE TRIAL

A 4 day trial will commence on 21 May 2012 in the First Instance Court in Hellín following the filing in February 2011 of a 1000 page Lawsuit against property developer Cleyton GES SL and the funding bank, Caja de Ahorros del Mediterráneo.  The Lawsuit was filed in order to recover the off-plan deposits paid to CAM Bank between 2005 and 2007 by FINCA PARCS ACTION GROUP members, in relation to their Sales Contracts for the Las Higuericas Finca Parcs development.

70 group members are scheduled to travel at their own expense from various parts of the UK and Ireland to attend the trial at the First Instance Court in Hellín after being summoned to appear in person as a result of a request to the Court by the Co-defendant, CAM Bank.

Group Co-ordinator, Keith Rule, says “It is our inalienable right under Spanish Law, LEY 57/1968, to have our off-plan deposits held in a Special Escrow Account and protected by way of individual Bank Guarantees. Contrary to Spanish Law the developer, Cleyton GES SL together with CAM Bank, who funded the project and accepted the off-plan deposits, failed to protect our money”.

“We have been demanding our Bank Guarantees since 2007 and even visited the CAM Bank branch to which our deposits were transferred and also the CAM Business Offices in Murcia and London, however they failed to deal with our complaint.  Finally in 2009 before commencing legal action we took our complaint to the CAM CEO, Roberto Lopez Abad and CAM President – Modesto Crespo.  They replied by email which stated: “If you do not have a Bank Guarantee then you have no relationship with this Entity”.

“Despite abandoning the project in 2009 neither the developer nor CAM Bank returned our money.  For the past 3 years the developer has been declared on various Court Judgments as ‘whereabouts unknown’.  Therefore we were forced into this lengthy, expensive and very stressful legal battle”.

Keith continues, “It has been a huge logistical exercise arranging flights, accommodation and airport transfers for the 70 group members; however with all plans finally in place we are now ready to face the developer and Bank in Court.  The First Instance Court in Hellín is relatively small and will need to provide interpreters and special facilities to cope with such a large number of claimants appearing at the trial”.

BACKGROUND INFORMATION

The group members paid their Off-Plan deposits totalling 1.5 million Euros between 2005 and 2007 for properties at the Las Higuericas Finca Parcs development to CAM Bank accounts opened by the developer Cleyton GES SL. 

None of the group members received the legally required Bank Guarantees in accordance with Spanish Law, LEY 57/1968.

The inland development, close to the village of Agramón, is around 15km from Hellín and 80km from Albacete and Murcia.  Despite marketing the development for 5 years as a self contained sports and leisure resort, the developer Cleyton GES SL abandoned the site in May 2009 stating that the project was ‘financially unviable’.  The site with 617 plots divided into 5 Phases still remains abandoned with just 50 Phase 1 properties completed, however due to site defects no property was issued with a First Occupation Licence by Hellín Town Hall.

BANCO DE ESPAÑA & CAJA DE AHORROS DEL MEDITERRÁNEO

At a press conference in September 2011, Bank of Spain Governor Miguel Ángel Fernández Ordóñez called the behaviour of the Banco CAM executives "scandalous" and said the bank was "the worst of the worst" (Lo Peor de lo Peor).

CAM was bought in 2011 by Banco Sabadell for One Euro with future losses being underwritten by the Spanish Government.

FAILURE TO ISSUE BANK GUARANTEES - HUGE PROBLEM IN SPAIN

The situation in which members of the FINCA PARCS ACTION GROUP find themselves is similar to that being experienced by many off-plan purchasers in Spain.

More than 500 victims of Off-Plan Property Bank Guarantee Abuse have so far provided detailed evidence to the Bank Guarantees In Spain Petition which can be found on the BANK GUARANTEES IN SPAIN website at:  www.bankguaranteesinspain.com

There are now several instances of Provincial Court Judgments (Santander, Cantabria, Burgos, Alicante, Murcia etc.), the Supreme Court of Navarra and various First Instance Courts in which Judges have ruled on the liability of the Banks according to LEY 57/1968.

ARTICLE FROM COSTA BLANCA NEWS

This week the CAM responded to CBNews articles about expats unable to recover their investments with an exclusive statement.

We contrast this with advice from financial expert and lawyer Francisco Iniesta, who gave a talk organised by the UPyD party in Torrevieja last week.

Also the Plataforma CAM protest group examines clauses in contracts which customers claim contrast with what they were told when the investments were sold to them.

CAM spokesman Juan Valdés Castelló said:

“Banco CAM will maintain individualised contact with customers who have seen their relationship with the CAM damaged by the deterioration of financial investments made.”

He emphasised that while Banco CAM was bought at public auction by Banco Sabadell – which is currently awaiting approval by EU authorities – the Caja de Ahorros del Mediterraneo remains independent but with no control over its banking business.

Sr Castelló insisted that ‘once the restructuring planned in the takeover process has been carried out, the entity is today amongst the most solvent in the Spanish financial system’.

He assured they will contact customers ‘during the weeks immediately after the closure of the operation, and in any case, before the summer’.

Sr Iniesta assured investors have not lost their money – ‘they just cannot get at it’.

He insisted banks cannot expect their customers to be financial experts but alleged CAM directors ‘chose elderly, long term clients who trusted the advice of their managers’.

“They turn to them for advice as they do from a doctor, but did not advise them as specialists,” he claimed.

According to Sr Iniesta, the three products which customers bought – ‘preferentes’, ‘obligaciones’ (subordinated debt) and ‘cuotas participativas’ – are ‘amongst the most complex and risky investments available’.

Yet they were marketed under attractive names such as ‘depósito ahorro combinado’ (combined savings deposit), he said.

The Plataforma CAM alleges ‘the managers of the entity emphasised in their declarations that the clients knew very well the products they acquired and they were properly informed’.

“This responds to the legal cover against possible lawsuits for not complying with the rules of the CNMV (national values market commission) and the Bank of Spain.

“To us it is difficult to accept that those affected had full knowledge of the type of contract they were signing.”

They revealed clauses in certain investment contracts including: ‘Investors may lose the investment made’; ‘The entity is not obliged to evaluate the suitability of the investment and so the client has no protection established in the applicable rules of conduct’; and even, ‘The client was informed that the requested investment is not suitable for them…The client nevertheless confirmed their decision to ask the Caja del Mediterráneo to contract the investment, of their own accord and in an independent manner, leaving the Caja del Mediterráneo exempt of all responsibility.’

The CAM’s Sr Castelló explained the ‘cuotas participativas’ do not form part of the takeover agreement, so their value remains linked to the negative assets of the Caja de Ahorros del Mediterraneo.

Nevertheless, he quoted director general of Banco Sabadell Miguel Montes as saying in March: “Each case will be studied individually, and they will be offered commercial alternatives.”

Referring to ‘participaciones preferentes’ and subordinated debt, he indicated the bank will offer a solution so that ‘they can make their savings liquid’.

Sr Iniesta claimed the Sabadell does not have enough money to buy all the investments back, so would have to exchange them for other products, but the exact terms cannot be set until the EU has validated the takeover.

However he claimed the Sabadell ‘is already taking decisions at the Alicante headquarters’.

He said customers can wait until a solution is offered or must prove the bank did not follow the law.

He argued affected people still ‘only receive confused answers and are badly informed by the employees of the CAM’.

“We do not understand why they were not previously informed about the intentions of Banco Sabadell, and instead since December they have been announcing solutions every two months, prolonging the situation and the illiquidity of the product,” he said.

“Furthermore the situation gets worse as the clients will not receive interest throughout 2012.”

Sr Iniesta demanded it be taken into account that clients with ‘cuotas’ acquired them ‘trusting in the promises and appearances of good management of the CAM, which later were not fulfilled’.

“Regarding the ‘preferentes’ and ‘obligaciones’, we ask to know now the conditions of the exchange and that they will be able to recover 100% of the money invested, so that the trust deposited in the CAM does not disappear,” he added.

Carlos Pena from the Plataforma CAM noted ‘we already said the Sabadell cannot take charge of the ‘cuotas participativas’.

He also claimed the Sabadell will not make the  ‘preferentes’ and ‘subordinadas’ liquid but, ‘exchange them for other bonds which can be converted into shares in a year, but only as long as they are showing an increase or there are sufficient funds to share out profits’.

“They are still tricking the people,” insisted Sr Peña.

Based on previous products emitted by the Sabadell, the Plataforma CAM assures the ratio applied to convert them into shares means customers could lose more than half of their money.

Sr Iniesta’s firm, Strategia financial and legal consultants, is handling civil claims on behalf of investors with ‘preferentes’ and ‘obligaciones’.

It is also pursuing a criminal case against the ex-directors of the CAM, and also the Bank of Spain and the national values market commission for allegedly failing in their duty to supervise the entity before intervening to rescue it last July.

They are offering a free consultation to explain what investments customers have and what their options are.

The Plataforma CAM has registered a case against the ex directors of the CAM with the High Court and invited affected expats to sign up to another identical claim.

Sr Pena insists only a criminal charge entitles them to go after the personal fortunes of the ex directors and entails no risk should they lose.

He also argued it will be much more difficult to pursue a claim against the CAM after the takeover is finalised.

They are holding a public meeting to which they have invited the British and German consuls ‘so they can see the situation of their compatriots’.

The meeting is on Wednesday, May 2 at 17.00, in the CC OO headquarters at Avenida Salamanca, 33, Alicante.

To contact the Plataforma CAM email info@plataformacam.com, for Sr Iniesta’s firm, email info@strategiaconsultoria.es

Jail terms demanded

The Bank of Spain has now placed the case of the Alicante Savings Bank CAM before the judiciary, commenting that the administrators appointed to run CAM after the Bank intervened should bring criminal charges against its former directors. A statement from the Bank voiced the opinion that the former directors Acted in their own self-interests and plundered the CAM. If a trial does take place, the accused could face between six months and four years in jail and fines of three times what they allegedly took if found guilty.