Investors in the failed White Bay development in Umm al Qaiwain may be offered land to settle their claims, members of the liquidation committee told investors yesterday.
The liquidators began meeting individual investors this week, giving the first clues as to how administrators planned to handle the case.
More than 400 people have filed Dh370 million (US$100.7m) of claims against White Bay, the liquidators said. The project's assets will more than cover the claims, liquidators told investors, some of whom spoke to The National after their meetings.
Assets reportedly include the project's 176.5 hectares of land and about Dh45m of cash in an escrow account.
"We feel we're in a good position because there is money," said one investor, who asked not to be identified. "I feel like there is a chance we can get our money back."
Members of the liquidation team declined to comment.
Al Murjan Real Estate, the developer of White Bay, filed for liquidation in November. White Bay was to include more than 7,300 villas, a marina, a shopping centre and a man-made island. The first phase of the project was due for completion in 2009.
Al Murjan is jointly owned by Sheikh Abdullah bin Rashid, Deputy Ruler of Umm al Qaiwain, and Al Khalijia Investments, a Sharjah company, statements supplied by the liquidators show.
Sheikh Abdullah filed a lawsuit last year to force the proceedings, citing the inability to obtain planning approvals from the local government, according to a notice sent from the liquidators.
Fifty per cent of the buyers defaulted on their payments, making it difficult for the project to move forward, the liquidators said in a statement at the time.
In meetings with investors yesterday, liquidators declined to offer specifics on possible refunds. But they said investors might be offered land from the project as part of a settlement.
"We're open to anything to get our money back," said another investor, who did not want to be identified. "We prefer money, but if we have to choose between land and less cash and nothing, we'll be happy with the land."
The land is 100 per cent owned by Al Murjan and there are no liens on it, the liquidators said in meetings. Infrastructure work on early phases of White Bay has been completed.
Land may also be sold to pay off investors. The land on which the project was being developed has been subdivided under the court's direction, but the value of developable land has dropped dramatically in recent years.
"On one hand, it is a positive that there is an official, court-managed proceeding of the liquidation of the company," said Ludmila Yamalova, a lawyer representing investors in the project.
"This is the first time that there is a proper court proceeding" to deal with claims against a developer, Ms Yamalova said. If investors do not accept settlements offered by liquidators, they will still be able to go to court to pursue claims, she said.
"I think investors are relieved," Ms Yamalova said. "The fact that liquidators are taking time to meet with investors is a big step forward."
The meetings with investors, which will continue until April 24, are solely to determine the status of claims. If the liquidators and claimants agreed on an amount, they signed a document stipulating how much was owed.
Investors will be split into categories according to whether they were in default or had paid in full at the time of the liquidation.
Liquidators did not give investors a time for resolving the issues but said they hoped the process would take months, not years.
