Bankruptcy issues

Maria,

 

You responded previously to the query within the thread "off-plan delays",  “If purchasers have won their case for breach of contract and have been awarded interest on monies deposited, but the developer has gone to appeal and then bankruptcy ensues before the appeal is heard, would their credits be classed as preferential and would this include the interest awarded? “

 Your reply was “In that case, the credit will be what the Court Decission stated ( deposit + interests?+ delay interests?+ legal costs?) and the classification of the credit as privileged and special will depend on the legal defense you act and the decission of the Judge. “

Well recently we read something contrary to this advice, i.e. that the property is only classed as a security if you want it, i.e. if your intention was to complete, whereas if you want the deposit back plus interest, then the credit will be classified as ordinary and not privileged.

 Does this mean that those who have won their case for breach of contract (i.e have no intention of completing as they won their case) will struggle to regain their monies if the developer declares bankruptcy in the interim, before monies are returned as per the original court judgement?

Does this make the whole process of winning your original case irrelevant with regards to regaining your monies, if the developer ultimately declares bankruptcy? What protection does the purchaser who has won their court case have in this regard during the remaining legal process to actually reclaim their monies? Indeed is there any protection within a legal framework?

 

This message was last edited by ads on 9/27/2008.

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This message was last edited by ads on 9/27/2008.

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Thank you so much for replying Maria.

Now for some further questions (sorry Maria) but are you aware of any legal precedent in a case such as this?
Also if  bankruptcy was declared, how long in your estimation would it take to legally prepare for such a situation ....  would the preparation time outstrip the time allowed, i.e. are specific time limits set by the administrators of the estate?  Is it a relatively straight forward procedure given the purchaser has won their original  case but might be awaiting an appeal or enforcement order? Would costs attributed to this defence be recoverable?

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Ads,

Thank you. Again below in green:

Thank you so much for replying Maria.

Now for some further questions (sorry Maria) but are you aware of any legal precedent in a case such as this? Some provintial Commercial Judges estimate these credits are privileged and special, but it is someting your lawyer needs to deffend adequately by bringiong forward this line of argument.
Also if  bankruptcy was declared, how long in your estimation would it take to legally prepare for such a situation ....  would the preparation time outstrip the time allowed, i.e. are specific time limits set by the administrators of the estate?  Is it a relatively straight forward procedure given the purchaser has won their original  case but might be awaiting an appeal or enforcement order? No, it is not. The execution of the decission will have to be done withon the Creditor´s meeting procedure and time frames. Would costs attributed to this defence be recoverable? Yes, for the ordinary procedure if Judges decided so.

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Hello folks

Can anyone tell me please if you are in the process of purchasing a property and the person (seller) is looking as if they are about to go bankrupt what is the situation?  Would the administrator be able to take the property from you if you managed to purchaser just prior to bankruptcy OR prior to bankruptcy could you negotiate to actually take their mortgage over?

Jojan

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Unless you want to cancel the contract ( if you have got rights for doing so),  you should ask developer directly about the situation and if the house is almost finished, it is very likely it will be completed within the Administration procedure.

Ask for clear answers.

Maria

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