Almost 20 buildings auctioned in the largest foreclosure in post-communist Romania

Almost 20 buildings owned by Romanian businessman Costica Constanda will be auctioned in the largest foreclosure organized in Romania after the fall of Communism. The starting price is EUR 43 million, reports local Digi24. The foreclosure targets a land plot in the French Village (Satul Francez) residential area in Northern Bucharest and the buildings on that plot. Costica Constanda had secured a bank loan with this piece of land, but he couldn’t pay back the loan anymore. Thus, the bank has started the foreclosure. This means that the 29,000-sqm land plot, as well as the 17 villas, the daycare center and the gym built on it will be put up for sale at an auction scheduled to take place on March 20. If no one will be interested in the assets, the auction will be organized once again. About 18 years ago, Costica Constanda purchased the litigious right over some 3 hectares of the French Village. In 2003, the Bucharest City Hall gave the businessman a similar land plot in Bordei Park, in exchange for the French Village where the City Hall was owning several buildings. Constanda wanted to build houses on the land received from the City Hall, but he couldn’t as that was a green area. Thus, he decided to complain to the court. After five years, the court ruled in his favor, forcing the Bucharest City Council (CGMB) to pay a compensation of EUR 18 million to the businessman. However, as CGMB wanted to avoid paying the compensation, it gave Constanda a land plot in the French Village, in exchange for the plot in Bordei Park. Moreover, CGMB promised to approve a zonal urban plan for the businessman to be able to build houses on that land plot. However, the Council failed to approve the construction. Costica Constanda took a loan from the bank, which he secured with the land plot. However, as he couldn’t make any construction on the plot, he also failed to obtain the profit he was counting on, and thus failed to pay back the loan. A few years back, Constanda has won a big compensation in court. Bucharest City Hall was supposed to pay him EUR 168 million for failing to meet its obligations, reports local Digi24. However, the Supreme Court decided that the case should be retried. Irina Popescu, irina.popescu@romania-insider.com