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Can anyone tell me what happens in the case of a developer going bankrupt regarding any chance of getting money back, when there is no bank guarantee?
Is there anything one can do in the early stages to improve the chances of getting any form of financial benefit?
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Assuming there are no assets then the same as this country and you get nothing.
This brings another question that someone will be asking
Assuming there was a bank guarantee.
What would happen if someone had one and it was the Bank that went belly up.
Would the Spanish government or the E.U take up the batton
Just Dan
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Just Dan, I assume you mean baton?
_______________________
Chills
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Just Dan, I assume you mean baton?
_______________________
Chills
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Hi Chills
Yep I doo
Just Dan
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Avicola:
Please find answers/suggestions below in bold green:
Can anyone tell me what happens in the case of a developer going bankrupt regarding any chance of getting money back, when there is no bank guarantee? It is important to take into account if you have/ have not started a judicial action for contract cancellation. But in everycase, you need to bring a good legal defense ( for your credit being classified as privileged and special) before the Judicial Administrators and the Judge dealing with the company´s creditors meeting.
Is there anything one can do in the early stages to improve the chances of getting any form of financial benefit? Just to bring good legal defense on the special character of the credit to the communication of credits to the Administrators ( that is actually done in early stages of the creditor´s meeting procedure)
_______________________
Maria L. de Castro, JD, MA
Lawyer
Director www.costaluzlawyers.es
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is the question related to polarisworld?
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Many thanks for your reply Marie. Sorry I have not thanked you earlier.
Your answers were, as always, extremely helpful.
(We have started court proceedings incidentally.)
Can anyone tell me how I can get information if a developer has become insolvent?
I told our solicitor that I had heard they had become insolvent (an acquaintance says that her bank manager told her they had gone bust or were about to), and he just said, oh well, all sorts of people say all sorts of things.
Which I agree is true, but I want to be at the front of the queue when it comes to a claim and I can see him missing a creditor's meeting.
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Is it true that according to the Spanish Insolvency Act, a purchaser's credit against the developer, resulting from cancellation of the purchase contract is not classed as a privileged credit, but is classed as ordinary credit? The instance I am referring to here is where a purchaser has won their case against the developer and the contract is thereby cancelled, but the developer goes to appeal, and the purchaser at this point is awaiting an enforcement order but in the interim the developer declares bankruptcy. If this is the case that the purchaser's credit in this circumstance is only classed as ordinary, it makes a mockery of winning the case in the first place...... as the purchaser is lower down the pecking order re credits after winning their case! I'm confused, so an explanation would be most welcome.
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I too would be extremely interested in any information re ads posting.
When the contractors are clearly in breach of contract - and yet to be classed as ordinary credit, would be a bitter blow indeed.
And the courts hardly help when the case takes several years to be heard, during which time the developer becomes insolvent. Who is to blame I wonder - surely not the claimant!
Seems as if you are dammed if you do and dammed if you don't.
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Welcome to the wonderful world of Spanish Justice! IE, there is none. .....especially if you are a foreigner!
Ask Maria de Castro. She is very good at answering our questions.
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Maria we would be most grateful for an answer on this please.
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Maria we would be most grateful for an answer on this please (see posts below dated 29th October onwards ):
Many thanks.
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Ads, cut aqnd paste your question and send it to Maria via a pm. Most lawyers finish at lunch time on a Friday I believe!!
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Thanks Tish .....will do.
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Just thought that I would provide an update received from Maria on this:
Dear Ads:
Thanks for your message. Please have answers below in bold green ( in your same text):
Dear Maria,
I wonder if you would be so kind as to respond to my query on the EOS website under the thread "What happens when the developer declares himself bankrupt" . The query posted on October 29th was as follows:
Is it true that according to the Spanish Insolvency Act, a purchaser's credit against the developer, resulting from cancellation of the purchase contract is not classed as a privileged credit, but is classed as ordinary credit? Bankruptcy act is very new and admit different interpretations. Some Commercial Law judges deffend the credit is privileged and special and that you have got a tacit legal mortgage on the property you were buying. That is the line we deffend in our Law Firm. The instance I am referring to here is where a purchaser has won their case against the developer and the contract is thereby cancelled, but the developer goes to appeal, and the purchaser at this point is awaiting an enforcement order but in the interim the developer declares bankruptcy. If this is the case that the purchaser's credit in this circumstance is only classed as ordinary, it makes a mockery of winning the case in the first place...... as the purchaser is lower down the pecking order re credits after winning their case! Your credit against the developer has a clear value ( what the Court decission covers) and, of course, you are in a very favourbale position to deffend that your credit is privileged and special. I'm confused, so an explanation would be most welcome.
Thanks once again to Maria for her advice.
If I understand this correctly then it is up to the defending lawyer to defend the credit as priviledged and special and just hope that you get a judge that accepts this interpretation....... I wonder if any legal precedent has yet been established in a case such as this?
What concerns me is that this appears as yet another instance of pure chance, a lottery if you will, depending on which judge hears the case.
This message was last edited by ads on 11/11/2008.
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Many thanks Marie for your very helpful reply, and also to Ads for posting it.
I agree with you Ads, that it does seem a complete lottery. And it seems the best you can do yourself is to get a good solicitor. And that is the problem for a lot of us on here I think.
People talk of changing solicitors. I wish I knew at what point and what the criteria is.
Our solicitor is slow, slow, but that seems normal.
He does not respond to emails, but that also seems normal.
But he does always respond to telephone calls, so no complaints there.
But we only ever seem to get half the story. He said we had a good case to annul the contract as it is 2 years over the contracted date. We instigated proceeedings June 08 and only now does he tell us it might take 7 years (we are in the Canaries).
We asked him to contact the developers with a view to discussing a deal, but he still hasn't done that a month later.
First of all he was waiting for them to recieve the 'demanda'
Then he was waiting for them to have their 20 days to respond
And now he still hasnt done it because he doesnt want us to look 'nervous.'
And yet he has asked me to stop keep ringing up becaue 'he will ring me when he knows anything.'
I would change in an instant, except we have already paid 4,500 euros to him and our money is now very low.
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Answering to ADS: ( Below in bold green)
Thanks once again to Maria for her advice. You are most welcome.
If I understand this correctly then it is up to the defending lawyer to defend the credit as priviledged and special and just hope that you get a judge that accepts this interpretation....... Correct, you present that request to judicial administrators first and if they do not accpet it, you go to the Judge.I wonder if any legal precedent has yet been established in a case such as this? They have been established, by Commercial Court in Cadiz for instance.
What concerns me is that this appears as yet another instance of pure chance, a lottery if you will, depending on which judge hears the case. A good, bankruptcy expert lawyer seems important too.
_______________________
Maria L. de Castro, JD, MA
Lawyer
Director www.costaluzlawyers.es
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