First UAE developer files for bankruptcy

[kannus]

First UAE developer files for bankruptcy - Real Estate - ArabianBusiness.com


I'm afraid other developers would take this for granted.

 

[shoeb]

hi kanus are you sure about this

 

[kannus]

Hi Shoeb,

I've pasted the link related to this news that came in yestredays Arabianbusiness dot com. So it has to be true

 

[memo123]

This is unprecedented," said Ludmila Yamalova of law firm HPL Yamalova & Plewka JLT, who is representing five customers who want to maintain payments to complete the project.

"It could become a common tactic for developers to forestall investors' ability to enforce their interests as proceedings could take years."

"The project, spanning a waterfront strip and two man-made islands on the Gulf coast, is a joint venture between Sheikh Abdullah bin Rashid Al Mualla, Umm al-Quwain deputy ruler, and Sheikh Tariq bin Faisal Al Qassimi of Sharjah-based Emirates Investment GroupEmirates Investment Group" zawya

If the ruling family is doing this as a developer then what should we expect from the 100s of dodgy developers that had no intentions of building anything to start with ?
they shipped the money out , beefed up their bank accounts some even skipped the country just to come back and declare bankruptcy !
ALL DEVELOPER WILL FOLLOW SUIT .
DISGUSTING !

 

[Brendan R]

as expected, the oyster is closing, Nemo is trapped

 

[memo123]

Emirates builder files for bankruptcy

Tuesday, Nov 23, 2010

The company behind a $3bn stalled project in a smaller United Arab Emirates member has filed for insolvency.

Lawyers say the move is the UAE's first court-mandated bankruptcy of a distressed property project since the financial crisis struck.

The filing will raise fears among the thousands of investors in stalled real estate developments across the UAE, especially Dubai, where many projects have floundered since the crisis sent the market into decline.

Customers at the 8,000-home White Bay development in Umm al-Quwain now face the prospect of a long legal process to recover down-payments as they scramble for assets along with other creditors, potentially undermining investor sentiment further.

If other developers pursue a similar approach, buyers of incomplete apartments and villas will have to chase their savings through an opaque court process.

Al Murjan Real EstateAl Murjan Real EstateLoading..., the owner of White Bay, has filed for liquidation in the courts of Sharjah, where two liquidators have been appointed, according to documents seen by the Financial Times.

"This is unprecedented," said Ludmila Yamalova of law firm HPL Yamalova & Plewka JLT, who is representing five customers who want to maintain payments to complete the project.

"It could become a common tactic for developers to forestall investors' ability to enforce their interests as proceedings could take years."

The project, spanning a waterfront strip and two man-made islands on the Gulf coast, is a joint venture between Sheikh Abdullah bin Rashid Al Mualla, Umm al-Quwain deputy ruler, and Sheikh Tariq bin Faisal Al Qassimi of Sharjah-based Emirates Investment GroupEmirates Investment Group
Emirates Investments Group, EIG

"I felt comfortable because the investment was with the ruling family, but if you can't trust the government, who can you trust," said Valeriy Babak, a Russian investor who bought two villas in the resort in 2007.

Emirates Sunland GroupEmirates Sunland GroupLoading..., a joint venture between Sheikh Tariq's EIGEIGLoading... and Australia's Sunland, has been managing the project, where contractors had until recently still been working on finishing the infrastructure ahead of starting construction on the site.

Luke Barnett, White Bay project manager, has been sending out notices of the court proceedings for investors, which say the owner has had a problem gaining government planning approvals. The notice also claims that half of the buyers have not maintained payments, making financing difficult.

Mr Barnett confirmed the liquidation but declined to comment further.

Two years into the crisis, property values across the UAE are continuing to edge down after losing as much as 60 per cent from their 2008 peak.

Government-backed companies have received emergency state support, such as the $9bn to Nakheel amid the restructuring of troubled conglomerate Dubai World's $25bn debt pile.

Some small developers have fled the country, while others have been jailed for not returning funds received by investors or for bouncing security cheques, which is a criminal offence in the UAE.

By Simeon Kerr in Dubai

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