12 February 2015 – Expansión
No options left / The Supreme Court dismisses the appeal lodged by the real estate company, which is also failing to reach an agreement with its creditors
The real estate company Martinsa Fadesa received a slap in the face yesterday as the Supreme Court rejected its latest appeal in the legal battle against Fadesa’s former managers, Antonio de la Morena and Manuel Jove.
The Supreme Court was the last legal option for Fernando Martín (pictured above) in his attempt to get Jove and De la Morena to compensate Martinsa with €1,576 million for allegedly falsifying Fadesa’s valuations prior to its purchase by Martinsa in 2007.
Following the rulings against the plaintiff by the Commercial Court, the Provincial Court of La Coruña and now the Supreme Court, the real estate company is left without any legal options. It could request the referral of the case to the Constitutional Court, but that is something that judicial sources deem unlikely.
This failure comes at a very delicate time for the real estate company, just a few days before the period for reaching a new agreement with its creditors comes to an end. In the proposal to its creditors, Martinsa (which has an equity deficit of €4,500 million) had included the possibility of cleaning up the company with the €1,576 million that it hoped to receive from Manuel Jove and share some of the money with its creditors. Now, the company will not only receive that amount, but the judge has order that it cover the legal costs of the trial, which lasted for almost four years. In total, Martina may be forced to pay more than €40 million as a result.
In this context, the deadline imposed by the judge in La Coruña for the creditors of the real estate company to join the payment plan will expire on 26 February. The proposed plan includes a significant debt forgiveness clause (“quita”) for some of the more than €6,000 million that it owes.
In addition to sharing out the compensation expected from Jove, the proposal includes a number of other improvements, but they are not sufficient for the creditor banks, which have been trying to reach an agreement with Martín for months.
Amongst the discrepancies between Martinsa and its creditors is a mismatch of up to 70% regarding the valuation of assets. Faced with this situation, the entities, including Popular, CaixaBank, Abanca and Sareb, amongst others, will not sign up to the agreement and so the judge in charge of the case will have no choice but to initiate the company’s liquidation plan. This process will be “long and complex” due to the huge volumes of plots, with a variety of different uses and locations, and the fact that many of them are in very early stages of development.
Original story: Expansión (by R. Ruiz and S. Arancibia)
Translation: Carmel Drake