Real estate developer GEA's residential compound Laguna Residence in Bucharest recently has gone bankrupt. This canceled the forced execution procedure previously started by other creditors of the project, which would have meant that the 25,000 sqm land plot and the nine existing, yet unfinished buildings would have been sold at auction. The forced execution procedure had been started by construction company Acosta Inversiones, which was owed EUR 200,000 from the real estate developer.

The starting price for the bid was of EUR 24.6 million, but after two bidding sessions, no buyers showed interest. If it had sold, the developer would have been able to pay off the construction company and loans from Spanish banking group La Caixa.

RVA Insolvency Specialists are the judiciary liquidator, which will evaluate the company's assets and attempt to sell them, as GEA's Romanian subsidiary does not have any liquidities. If the sale price is low, clients who already put down payments for apartments might not recover their down payments in full.

The 500-apartment project, which should have been finalized in 2009, was stopped initially due to misunderstandings between its two developers, Spanish GEA 21 and Prasa. GEA 21 took over the project entirely in 2010 and received a EUR 10.5 million financing from La Caixa. Then, it also announced the first blocks with 140 apartments would be ready either end-2010 or in the first months of 2011.

Laguna Residence is located on the banks of the Tei lake in the eastern part of Bucharest.

Developer GEA 21 has been working on residential, commercial, sanitary, educational, office, cultural, and sports buildings, as well as motorways in Spain.

editor@romania-insider.com