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When a developer runs away

Discussion in 'Dubai property' started by Gashead, Jan 12, 2009.

  1. Gashead

    Gashead New Member

    Out of interest when a developer leaves the country and his debts behind why can't his local sponsor/partner (who owns a majority holding in the company) be persued by the debtors?
     
  2. memo123

    memo123 Member

    the question is the local sponsor considered

    a partner?
     
  3. Gashead

    Gashead New Member

    Or a sponsor.
     
  4. PropGuy

    PropGuy New Member

    Nope as they don't own the liability. But investors can takeover the project if that helps.
     
  5. Sixgun

    Sixgun New Member

    "But investors can takeover the project if that helps".

    I have heard this before, but cannot really imagine how it would work in practice.
    Apart from getting 100% of the investors together (which surely would be required), to sign up etc, from every part of the world, how then does it work with required certification from government.
    A group of investors don't hold permits to build, or what I would imagine, to be 100's of other specialized documents, necessary by law for building a tower block.

    I mean, I'm not disputing the possibility in theory, but is it really feasible?, has it ever happened yet?
     
  6. Gashead

    Gashead New Member

    Not residential as far as I know but it's happened on hotels.
     
  7. naxal

    naxal New Member

    My hunch is that if the local sponsor is the 'Sleeping Partner' of the company ,then as Propguy said ,there is usually a written document signed stating that he is not responsible for the Company's Liabilities .
     
  8. zombie

    zombie New Member

    There is a local partner / sponsor, but in most cases the developer is an L.L.C - Limited Liability Company. Their liability is limited to the paid up capital of the company, which depending on the type starts from AED 300,000/-. The local partner is not responsible for more that that at the most.

    On getting the investors to get together & take over the existing business is possible, but needs cooperation & the skill to make it work. Hardly happens in real life, though possible I would think. But the important question it depends on is how much money has been siphoned off by the developer before he ran away?????
     
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