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Maria

We are also interested in your response regarding Herrada del Tollo.  We don´t have a bank guarantee, and we have been told that if they go into liquidation we will be classed as ordinary creditors, so we are unlikely to get any money back as we will be at the bottom of the list of creditors.  There are a lot of purchasers on EOS in a similar situation to us.

Herrada del Tollo are in breach of contract for the majority of purchasers (if not all) as our houses were due to be delivered a long time ago (January 2008 in our case).  They went into voluntary administration in May 2008, when they were unable to raise the finance for the final build licence.

Herrada del Tollo have put forward a proposal to continue with the project, which has been scaled down, asking creditors to agree with it and are now waiting for their response. 51% of creditors need to agree or the company will be liquidated, which is why Annjoe has asked the previous question.  Herrada del Tollo´s assets are highly unlikely to raise enough finance to repay ordinary creditors in the present economic climate.

The basic proposal is that purchasers can have their houses in 3 to 5 years or, if they want their money back, they will get 65% of their deposit, 10% of which will be in year 4 and the balance in year 5.  Within the proposal there are options (such as transferring to another property) and the court administrators will be monitoring what happens.

This is a brief summary of the scenario, and I know that many people will be anxious to hear your thoughts, as they need to make a decision by the end of the week!  The deadline for signing their agreement in front of a notary is April 30th, as the decision needs to be with the judge by May 6th.

Many thanks for your advice.

Best wishes.

Sue

Dear Sue and all:

There is now Case law to back that purchasers without Bank Guarantee are before the most preferential creditors, which is, and have always been in our opinion, the correct interpretation of provisions 62 and 84.6 of the Bankruptcy Act.

Case Law is from La Coruña, which does not mean that the judge in charge of San José/Herrada del Tollo insolvency proceedings will agree with this.

Alternatively to defense of your credit as " against the assets" of the company as explained above, if you were not given a Bank Guarantee, you can use an action against the Bank which received your deposits, out of provision 1.2 of Law 57/68.

We are using this strategy for our clients, which is full grounded in Law. We do hope to succeed, but, as it is always said: cannot assure a success.

I do think that the fight is worth it and fair to Consumers rights. Specially becuase you were deprived of the most important Guarantee for these cases.

Best regards,

Maria

Is this not similar to Aifos and their failed voluntary insolvency proceedings - what happened or is happening there?

Did I read all those having paid deposits without guarantees are all ranked as unsecured creditors meaning they will never see a cent?

I've not followed the Aifos saga that closely so maybe someone else involved there would comment.

MARIA,

This is an absolutely critical point for many without BG's that are facing the possibility (having won their cases) that their status within insolvency proceedings is recognised, and that their monies are safeguarded. In other words that their legal battle to date has not been in vein.

What I fail to understand is why such inconsistency, depending on where your case is heard, is allowed to exist within the Spanish legal system. Surely once a legal precedent has been set it should be reflected across the country. Could you please explain why this is not the case Maria. Doesn't this lead to yet more insecurity for  clients as they fear that their monies spent on legal action to date might be unwarranted, given that case law as things stand now appears so unpredictable?

Clients need reassurances that there are not hidden agendas at work behind the legal judgements being made or that politicising of the legal system is another factor that they have to contend with. We all need an independent judicial system that reflects a consistent and fair approach across the board.

I for one would like to know what lawyers are doing right now to ensure that this is tackled at the highest level. Is there any legal action that can be taken against inconsistent judgements of this nature, so that the judiciary can be made ultimately accountable for their decisions?

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Please have answers/comments below in bold green ( same text as your email):

MARIA,

This is an absolutely critical point for many without BG's that are facing the possibility (having won their cases) that their status within insolvency proceedings is recognised, and that their monies are safeguarded. In other words that their legal battle to date has not been in vein. Of course it is!

What I fail to understand is why such inconsistency, depending on where your case is heard, is allowed to exist within the Spanish legal system.  It is not a defeintive, static matter,  as La Coruña already has the right approach for the protection of Comsumers in these situation, other provinces need to follow it, and of course a good defence regarding the classification of credits by buyers ( and their lawyers) is needed. Surely once a legal precedent has been set it should be reflected across the country. Could you please explain why this is not the case Maria. It will be if right legal argumentations and appeals are implemented. Doesn't this lead to yet more insecurity for  clients as they fear that their monies spent on legal action to date might be unwarranted, given that case law as things stand now appears so unpredictable? I am quite confident that  a good defence, out of Bankruptcy Act 62 and 84.6, and the recent Case Law will succeed.  

Clients need reassurances that there are not hidden agendas at work behind the legal judgements being made or that politicising of the legal system is another factor that they have to contend with. We all need an independent judicial system that reflects a consistent and fair approach across the board. Of course! We are currently brining claims to the General Council of Judges on cases on unacceptable delay.It is what we can do, together with our regular legal work, for the bettering of the Judicial System. Everyone needs to do whatever is at hand.

I for one would like to know what lawyers are doing right now to ensure that this is tackled at the highest level. Is there any legal action that can be taken against inconsistent judgements of this nature, of course, classification of credits need to be appealed up to the Supreme Court ( we are engaged on this appeals at present moment for our clients) so that the judiciary can be made ultimately accountable for their decisions? so law is applied correctly in favout of those which did not recive Bank Guarantees, paid amounts in off plan purchases, the developer has breached the contract in terms of completion deadline and the company is under insolvency proceedings.

hello dare I ask about monthly reports folks ?, has there been any news that I have missed, sam

Dear Stokey:

Please give me your name and I will request about your monthly report..... right away!

Best regards,

Maria

Hi Maria

I also have not receieved a monthly report.  I have also e:mailed Steven with some questions but have not receieved any replies. I would very much appreciate your help. 

Regards Chrissie1

 I will ask Steven about this tomorrow. No prob.

Thank you.

Regarding the Case Law is from La Coruña about purchasers recieving preferencial position amongst creditors.

It seems that it only relates to contracts still active when liquidation was first started, and as 99% of contracts for Santa Ana Del Monte (San Jose & HdT) had already been breached by this time would suggest that this law (precedent) would not apply?

What do you think?

Kind Regards,

Steve.

 It applies, out of articles 62 and 84.6 of the Bankruptcy Act

María

Does this mean that the judge in Alicante will necessarily accept this ruling, as it was in a different province?  In your answer below you said that you were quite confident, which to my mind suggested that a different judge might not accept this argument.

The reason so many of are concerned about this is that the judge in Alicante has already classified those of us without bank guarantees as ordinary creditors, so if HdT (San José company concerned) go into liquidation, is there any possibility that the judge will change his ruling and make us preferential creditors?  We are very worried that as ordinary creditors we may not get any money back, whereas as preferential creditors this is far more likely!

Thank you for all your help on EOS!

Sue

Hi Redman,

Our solicitor tried this action  for us as our contract was still in force when San Jose went into voluntary liquidation.

We were refused by the judge.

Regards

This is why the whole legal situation in Spain is so frustrating.

Laws might say one thing but the judge something else.

and on to another higher court .......

Chrissie1:

Steven has just confirmed to me that he has sent to you emails on the 28th of April and today answering your questions.

Best,

Maria

Maria

We have now had 2 e:mails from Steven today with regards to your suggestion/proposal to take action against the bank for non provision of BG's and we have to consider what we are going to do.  We will contact your office with our decision as this kind of action clearly needs careful consideration at this point.

Kind regards

Chrissie1