The notorious Spanish developer Aifos has been forced into administration proceedings by creditors, reports the Spanish daily El Pais. This is a step in Spanish commercial law that can lead to administration and bankruptcy.
Two suppliers, owed a combined total of 392,000 Euros by Aifos, asked the commercial courts in Malaga to put the company into administration. On 8 January the Judge Enrique Sanjuán agreed that Aifos meets the “objective conditions” to start bankruptcy proceedings. As a result, the court has accepted the creditor request to start proceedings.
Solicitors representing the suppliers claim that Aifos has outstanding debts of 7.9 million Euros to pay.
If the court decides to put Aifos into administration, buyers who are still waiting for a property from Aifos long after making substantial stage payments will have to join the queue of creditors trying to get their money back from Aifos. As unsecured creditors, buyers without bank guarantees would be at the back of the queue.
Before reaching a decision on whether to put Aifos into administration, the court has asked various banks to confirm whether Aifos has defaulted on its debts to them.
At the beginning of December the court rejected a similar request by another one of Aifos’s creditors – a company called Gestión de Obras y Reformas. At the time Gestión de Obras y Reformas did not provide any evidence of other creditors, and based its request on the assumption that Aifos would run out of money as a consequence of the bankruptcy of Grupo Tremon – another large Spanish developer.
British property Investors in the firing line
At the height of Spain’s property boom Aifos opened offices in London and Manchester, and focused heavily on sales to British overseas property investors. Many of them may now be affected if the company is forced into administration.
Aifos, which describes itself as a “strong and solvent group of companies” at its website, has been the subject of numerous client complaints for engaging in practices like selling off-plan without planning permission. The Sunday Times was one of the first to draw attention to problems at Aifos in its April 2005 article Costa Britons sink in tide of scandals
Aifos President Jesús Ruiz Casado has also been implicated in ‘Operation Malaya’- the police investigation into municipal corruption and urban planning scandals.
Aifos also owns 3 Guadalpin Hotels in Marbella, Puerto Banus, and Mijas. The Guadalpin Banus is caught up in a town planning scandal.