No bids for social area of bankrupt development

A SECOND  attempt  by Caja de Ahorros to auction off  social areas of buildings seized for non-payment of a $5 million loan has failed.

Up for grabs were  the social areas of the condo hotels Ibiza Crown and Coronado, accepted as collateral for the loan from the now-bankrupt developer, but it failed to attract any bids.

It was the second attempt to recoup the loan, made to the developer, R.G. Hotels.

Investors paid between $80,000 and $100,000 for the units, which were to be rented out as hotel rooms by the developer.

In theory, the income from the rentals was supposed to pay for the cost of the unit. However, in most cases, earnings never came.

With the company in bankruptcy, the administration of the buildings has been virtually in the hands of the owners.

Caja de Ahorros officials said that the bank may now try to directly sell commercial areas of the buildings.

Courts still have to resolve a complaint about whether or not it was legal for the bank to accept the common areas as collateral.