For the first time ever, court marshals have begun seizing several hundred apartments that have already been sold, along with other assets, after Baltiisky Bank filed a lawsuit against St. Petersburg developer Stroimontazh.
Court marshals want to seize the 8,500-square-meter Monblan business center and 1,700 apartments belonging to Stroimontazh clients, the developer said last week. Dmitry Bogolyubov, a spokesman for the builder, said the information was from enforcement proceedings that it had seen.
Courts sided with the bank three times in its lawsuit seeking 250 million rubles ($8.6 million) in debt from Stroimontazh. Marshals are currently carrying out the court's order and working to seize property on the builder's balance sheet, Baltiisky Bank spokeswoman Yelena Sanarova said.
According to Stroimontazh data, the apartments were on average 50 square meters and cost 60,000 rubles per square meter, meaning that the value of just the 1,700 apartments would be no less than 5 billion rubles ($172 million). The Monblan business center is probably worth another 560 million rubles to 600 million rubles, said Alexander Filippov, director of NAI Becar's appraisal department.
Stroimontazh prepared a written protest over the property arrests. The document says all of the apartments sought by the bank actually belong to individuals who signed contracts with Stroimontazh and have fully paid. The company signed preliminary purchase agreements for the apartments, which is why some of them still belong to the developer, Bogolyubov said.
He declined to say how many apartments Stroimontazh still owns, but a source in the company said there were "several hundred."
If Stroimontazh was operating in accordance with the law on equity construction — which lets future homeowners buy a share in a building being constructed — then apartments that have already been sold should not be on the firm's balance sheet, said Sanarova, of Baltiisky Bank.
In May, the builder announced that it had finished all construction and handed all of the apartments over to their owners. In July, Stroimontazh filed to enter bankruptcy with arbitration courts in St. Petersburg and the surrounding Leningrad region. The courts have yet to rule on those requests.
Not including an outstanding bond for 1.3 billion rubles, Stroimontazh had debt in April of 2.3 billion rubles, although company representatives say they have agreed on restructuring with all of their creditors except Baltiisky Bank.
The creditors have real cause for concern. Last week, the main shareholders of Stroimontazh, Stroimontazh Corporation, decided to liquidate the company. The corporation guaranteed 2.1 billion rubles in loans to the developer: 1.5 billion rubles from Sberbank, 300 million rubles from Svyaz-Bank, $3 million from Credit Europe Bank and the 250 million rubles from Baltiisky Bank.
Stroimontazh, founded in 1994, is 90 percent owned by Artur Kirilenko, while Mirax Group owner Sergei Polonsky owns the remaining 10 percent. The company had a full-year loss of 90 million rubles in 2008, according to Interfax's SPARK database.
This is the first major bankruptcy of a developer that has resulted in an attempt to seize apartments, said Yegor Noskov, managing partner at Duvernoix Legal. Until Stroimontazh goes into administration, the bank can have apartments arrested that were not sold under the law on equity construction, although the developer remains responsible for ultimately providing the apartments to its clients, he said.
If Stroimontazh enters bankruptcy, the apartment buyers will have to wait with other creditors to collect their debt. If the company doesn't have a lot of property left, they will have little chance of collecting, Noskov said.
The bank and builder are likely just playing hardball with each other, said one of the apartment owners. If the apartments really are handed over to the bank, it is unlikely that the lender would try to force out the residents, which would lead to major protests, he said.
"Our building was finished in July, but the majority of contracts still haven't been registered," he said. "The builder made us sign an agreement for a middleman to prepare the deeds, which cost 23,000 rubles, and they wouldn't give us the purchase agreement until we paid. That's why people weren't able to register the property themselves."
The press service for the Federal Court Marshals Service declined comment.
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