The heavily indebted ECM Real Estate Investments has declared bankruptcy. The Prague City Court made the ruling after a majority of the developer’s creditors asked the reorganization plan be withdrawn, stating that the move is “the only possible and suitable solution of the debtor’s insolvency.” The total volume of claims against ECM has reached CZK 9.5bn.
The company’s reorganization proposal was submitted in August by Astin Capital Management Limited, representing the ECM’s Eurobond holders. The bankruptcy declaration will not change ECM’s situation much, according to the insolvency administrator Ivo Hala. Hala told ČTK that “the process of converting assets into money will continue. … For creditors, Friday’s court decision is a way of getting their money back relatively quickly.”
The sale of ECM’s Chinese assets is currently underway, and sale contracts on all the developer’s assets in Pankrác-Prague 4 with the exception of City Deco and City Element have been signed. Restitution claims hampering the sale of the last two plots were solved recently, opening way for potential investors.
