Aifos built 80 developments on the Mediterranean coastline. :: SUR
After a long and complicated process that has dragged on for five years, the future of Aifos will be decided within the next few weeks and, with it, that of nearly 5,000 people who were affected when this property group, which at one time was the largest developer in Malaga province and had more than 80 residential developments all over the Mediterranean, went into voluntary receivership on 22nd July, 2009.
Those affected included not only purchasers of properties that they never received, but also workers, suppliers, banks and even the tax and social security authorities.
Aifos went from being a major business with offices in London, Munich and Dublin to becoming the biggest insolvency case in Andalucía with debts of 901 million euros. The creditors have until 4th September to file with the court a proposed agreement that would allow the company to be saved.
The Aifos proposal
At the moment the only proposal drawn up is by Aifos, although the Receivers, who are openly at war with Aifos owner Jesús Ruiz Casado, have doubts about its viability because it involves the use of money which is subject to legal proceedings and may not be available.
Aifos suggests giving its creditors a choice between receiving part of the money they are owed, or waiting until all the assets are sold and the money acquired is divided up. However, in the latter case, financial institutions (who are owed two thirds of the debt), Hacienda and Social Security would have priority, and other creditors would only receive whatever is left after the authorities had been paid off.
Aifos suggests paying people who bought properties, suppliers and other creditors only half of what they are owed (the total of this type of debt is 209 million euros) and they would not receive any of the money for nine years. It proposes paying its 50 million euro tax and social security debt over several years, until 2022, and wants the banks (who are owed 600 million euros) to enter into new bilateral agreements which would enable the company to finish its uncompleted developments and continue to pay back its loans. However, there is a drawback - Aifos does not have the money to pay the ordinary creditors their 50 per cent, although it seems confident that it will manage to obtain it.
Time is running out
Some of those who have paid Aifos for properties they have never received are considering accepting an 80 per cent refund, whereby 20 per cent of it would be in cash and the rest as an equity loan to the company to prevent it having to go into bankruptcy and to give themselves more chance of recovering their money. However, this proposal would need a certain percentage of support and time is running short.
Lawyer Carlos Cómitre, of Ley 57 Abogados, has pointed out that support from the banks is crucial. “They must decide whether to face losing all or part of their money or to join smaller creditors in managing a new Aifos with new shareholders and management,” he said.