Companies belonging to the Project Immobilien Group have gone bankrupt. Some of those who bought properties have already paid large down payments and are anxious given the difficult situation.
Many building projects have yet to be completed, and yet companies affiliated with the Project Immobilien Group have filed for bankruptcy. The buyers, some of whom have already made substantial advance payments, are asking themselves what comes next. Will the relevant building project be completed, and what about the money they have already invested up till now? Commercial law firm MTR Legal Rechtsanwälte advises both private and commercial investors on real estate law, and can shine a light on the legal options available to buyers affected by the wave of insolvencies that have hit the Project Group.
The Group is made up of two corporate wings: the Project Immobilien Group is responsible for planning, supervising, and marketing the Group’s real estate projects. It is here that Nuremberg’s district court – the Amtsgericht Nürnberg – has opened preliminary insolvency proceedings against the holding company Project Real Estate AG, as well as the companies Project Immobilien Projektentwicklungs GmbH, Project Immobilien Management GmbH, and Project Immobilien Wohnen und Gewerbe GmbH.
The situation is complicated by the fact that the Project Immobilien Group does not own the properties. These are owned by the Group’s second wing: the Project Investment Group, whose only subsidiary to file for bankruptcy to date has been Project Vermittlungs GmbH.
The Project Investment Group has, among other things, set up funds that finance each and every building project. While the fund management companies have not yet been affected by the bankruptcies, German business newspaper Handelsblatt reported on August 22, 2023, that these companies had stopped making payouts unrelated to profits to investors.
The provisional insolvency administrator for the holding company Project Real Estate AG and for the operating company Project Immobilien Management Immobilien GmbH has disclosed that every effort is being made together with the fund management companies to find a solution and to look into whether and how the necessary funding might be raised to continue the building projects. This entails ascertaining key information relevant to each individual building project, such as the stage of construction, accounting status, outstanding liabilities, and future financing requirements. The Project Immobilien Group currently manages around 118 projects, including the construction of residential properties with about 1,850 apartments. This means that the process is time-consuming and that it may be some time yet before the buyers have more clarity.
But those who have bought properties can start preparing themselves for further developments now by seeking legal advice.
The team of expert real estate lawyers at MTR Legal can provide counsel.
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