First UAE developer files for bankruptcy

Wednesday, 24 November 2010 10:26 AM

BANKRUPTCY FILING: The move is thought to be the first court-mandated bankruptcy of a distressed property project since the financial crisis began (Getty Images)

In a move that could spark further concern for local investors in troubled real estate projects, a UAE developer has filed for liquidation, according to the Financial Times.

The move is thought to be the first court-mandated bankruptcy of a distressed property project since the financial crisis began.

The UK newspaper reported that Al Murjan Real Estate, the owner of the $3bn 8,000-home White Bay project in Umm Al Quwain, filed for insolvency in the Sharjah courts, where two liquidators have already been appointed.

The news means that investors in the development, which includes two man-made islands and waterfront housing, may now be forced to turn to the legal process to recover their down-payments alongside other creditors.

“This is unprecedented,” Ludmila Yamalova of law firm HPL Yamalova & Plewka JLT - which has several clients as investors in the project - told the Financial Times.

“It could become a common tactic for developers to forestall investors’ ability to enforce their interests as proceedings could take years.”

The newspaper also reported that the liquidation had been confirmed by the White Bay project manager, Luke Barnett, who has been sending out notices of court proceedings to investors.

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Posted by: Iqbal Thursday, 25 November 2010 9:53 AM[UAE] - UAE

I agree with Hakim. The response from the authorities is what all investors will be watching. There are many such stalled projects all over UAE with small genuine investors being the victims.

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Posted by: Mohamed Thursday, 25 November 2010 9:47 AM[UAE] - UAE

In Umm Al Quwain similar project have failed and did not start at all- it is Al Salam City by Tameer on Emirates Road.
lukily I mangae to get my money back but after three years of waiting.
The authority in Umm Ulaquwain should take more steps in protecting the small investor and controlling the projecrts

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Posted by: John Wednesday, 24 November 2010 3:22 PM[UAE] - UAE

There is no wonder as far this news is concerned. I own a small business in a Dubai free zone which is not going very well at the moment. I could not renew the license and within 2 months from license expiry they told me to de-register my company by canceling all the visas.

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Posted by: aslamk Wednesday, 24 November 2010 3:22 PM[UAE] - uae

Its a great lesson and high time for other Emirates to be cautious and protect the genuine investors and their hard earned money.

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Posted by: Kat Wednesday, 24 November 2010 3:22 PM[UAE] - UAE

I know it's for illustrative purposes but using an image of Dubai to highlight a bankruptcy in Umm Al Quwain is a little unfair. Let's stop bashing Dubai for a while please!

Posted by: steve Thursday, 25 November 2010 12:13 PM[UAE] - India

I agree with Kat, the pic used should hv been of UAQ. Although Dubai & UAQ are part of UAE, it is unfiar to use a Dubai pic to highlight this news.

Posted by: Ferdinand Marcos Thursday, 25 November 2010 9:48 AM[UAE] - Philippines

Kat, its not bashing, its reality. If people loose money and the authorities do not care and stick the head in the sand, then its a good thing that Arabian Business reports about it.

BTW, the world does not make a big difference between UAQ and Dubai and whatever. They either know its the Emirates (one country, right?) or call it all Dubai.

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