The Luxembourg insolvency trustees of the Espírito Santo Group’s property offshoot, Rioforte, have appealed to Portugal’s Public Prosecutor to unblock the company’s asset, the Herdade da Comporta real estate fund.
The fund was released for sale to Ardma Imobiliária last year but was withdrawn when the buyer, businessman Pedro de Almeida, was found to have been dealing directly with Espírito Santo family members close to the deal and had compromised himself.
In November 2017, veteran US investor Asher Edeman commented, “Clearly, the prosecutor alighted on the truth - Pedro Almeida cooked up his deal with the group responsible for the demise of the Espírito Santo Group and for the tragedy for the depositors and investors in Ricardo Salgado’s fraudulent empire. Now, the best next step will be to remove the negotiation approval from Haitong Bank which is still populated by staff loyal to the Espírito Santo family.”
Ardma’s July 2017 contract for the purchase and sale of 59% of the Comporta real estate fund would have seen a sale for a ‘nominal sum’ - to the detriment of Rioforte creditors and the Portuguese taxpayer which owns the major creditor, Caixa Geral de Depósitos.
The Luxembourg insolvency trustees, Alain Rukavina and Paul Laplume, were all for the Ardma sale despite the potential destruction of value for the creditors they purport to represent. The pair now is bleating that, “the Herdade da Comporta real estate fund risks insolvency."
Without a thawing of the asset freeze imposed on Comporta by the Public Prosecutor, part of a wider legal move to seize and preserve all Rioforte assets while investigations continue into the whole Espirito Santo mess, Comporta is going nowhere but downhill.
Alain Rukavina and Paul Laplume appealed against last autumn's decision to re-impose the asset freeze for Comporta and instead of finding a suitable buyer, rather than approving another puppet for the clan, both now complain about a situation caused by their own selection of an unsuitable buyer for Comporta.
Without selling the Comporta real estate fund, Rioforte will collapse and the liquidators job of raising money for creditors will have failed in spectacular fashion.
The Comporta real estate fund owes money to Caixa Geral which at the end of 2016 was waiting for €98.7 million, plus €10 million in interest. The Comporta fund has assets, albeit it re-frozen ones, as it owns land, real estate construction projects and building plots at Herdade de Comporta and nearby.
The other part to this sorry mess is the estate fund, Herdade da Comporta - Agro-Silvicultural and Tourist Activities, which manages the agricultural and tourist part of the enterprise spread across the Grândola and Alcácer do Sal council borders: this business is 'suspended,' pending a solution to the Comporta real estate fund
The Luxembourg insolvency trustees resolutely have refused to release information to an interested US investment fund. This was on the advice from Haitong Bank that one of those involved had existing links with a Clan member. This friendship went back decades, was personal not financial and sadly is at an end, due to the death of Vera Espírito Santo Iachia.
Advised by Haitong Bank, itself then run by clan member José Maria Ricciardi until he was ‘let go’ by the Chairman last year, the Luxembourg trustees have failed to get to grips with the web of Espírito Santo influence and family connections which faced them and have been little more than pawns in the clan’s game.
The Public Prosecutor has no reason to turn down a serious application to release Comporta for sale, nor have the liquidators any reason to continue to ignore serious offers from more respectable parties that Pedro de Almeida who was known to be a friend of Haitong Bank’s Ricciardi and who had other clan connections.
Asher Edelman commented on these developments:
“I hope the bank contacts us this time regarding an offer. They have fought my every offer from €400 million on, only to end up with a bankrupt property. We are prepared to talk and negotiate a fair purchase price for assets that the management and the bank have managed to sink into the marshes.”
The offer from Edelman and his business partner David Storper at Armory Merchant, could be back on the table, but has the playing field finally levelled now that the collapse of the Comporta business is in sight and the Luxemburg liquidators have woken up to the awkward position in which they have allowed themselves to be placed?
