Last May 2008, the companies Herrada del Tollo S.L. and San José Inversiones y Proyectos Urbanisticos S.A, presented voluntary Creditors Administration Proceedings at the Mercantil Court in Alicante. This situation is due to the developer’s insolvency.

The companies’ management and disposal of its assets depends now on the authorization or management of the Administrators.  

The clients who have became creditors of the building company, should inform the Court about their credits according to the Spanish Voluntary Administration Act (Ley Concursal). There is one month period to inform the Court regarding buyer’s credits, since the publication of the Voluntary Administration order in the Spanish Official Gazette. They should enclose their purchase and sale contract, a Power of Attorney and evidences of the payments done up to date. 

After that, the official administrators appointed by Court (an economist, a solicitor, and a Bank) will prepare a list of creditors, classifying them per its importance: privileged credits, ordinary credits, junior credits.    

Finally, in case an agreement may arise, the clients have the possibility of getting their dwellings by an extension of their contracts (with a variation in the estimated period of time); or getting their money refunded (all the amounts paid or just a part of them) but in a time schedule arranged by the parties.  

In despite of the above, if no arrangement is possible, there would be a liquidation of the assets of the company: there would be an auction and the profit will be shared between the creditors, always in proportion to their credits.

Mare Nostrum legal department is specialist in Creditors Administration Proceedings, and we are helping clients in this situation to get through their cases against Herrada del Tollo S.L. and San José starting legal action in the Court of Alicante.