Couple fail in case against Platinum Developments

This is a story that seems to have come in under the radar for some reason. It's a worrying one as it involves Platinum Developments in Sandyford, a company lauded for pulling its Sunset Beach Resort in Pomorie (pictured) out of the fire when the Dutch developer legged it with a bag of cash. Credit is most certainly due to the company for not folding its tent and heading for the hills as many others would have done. The company morphed from an agent to a substantial Bulgarian developer, the largest foreign developer in the country as far as we can ascertain, and completed this development. Credit where it's due then.

There would, however, still seem to be substantial problems at the original Pomorie development in relation to promised refunds, which the Irish company is foisting on the Dutch parent, the original cause of all the problems, but also with rentals and management. See the totally property forum if you want to get in touch with others in the same boat. The forum doesn't have a posting since last November, but we're not sure whether this is because everything was settled to the owners' satisfaction or if Platinum had it shut down (it doesn't appear to be closed though). AskAboutMoney.com was threatened by the company over a posting on its forum, which you'll find here, some months ago. It was subsequently suspended.

The most recent story about Platinum is in last Wednesday's Indo and Times (you need to be a subscriber to view the whole lot). The Indo version (it was on page 4 beside a picture of Bono in Japan) doesn't seem to appear online for some reason but Eircom, God bless 'em, appear to be able to provide the full story, even though it too came from the Times.

Some excerpts:

"Mr and Mrs Uwen had said they remortgaged their home in England in 2003 to invest in the Pomorie Golf and Beach Resort in Bulgaria, owned by a Dutch company, NV Capital Ground and Building Investment (CGBI). It was developing the lands through a holding company.

The Uwens say they paid CGBI €215,000 for 14 apartments and two commercial units, representing 20 per cent deposits on the purchase, and received receipts.

In mid-2004 the Dutch authorities froze CGBI's assets after it hit financial difficulties. Works ceased with about one-tenth of the complex complete, Daniel Simms, for Mr O'Reilly, told the court.

Mr Simms said Mr O'Reilly, whose Platinum Developments firm had acted as a selling agent for CGBI, put together a team of investors to "salvage" the project, and they acquired the CGBI holding company. This firm's name was changed to Sunset Resort OOD and, in letters to the Uwens, Mr O'Reilly said he was the owner of Sunset.

In an affidavit, Mr O'Reilly said the Uwens were offered options on how to deal with their investment, and they chose repayment on completion of the development.

Mr O'Reilly denied they were entitled to receive €215,000, and said the amount was just €12,800. CGBI had informed Sunset the Uwens had paid that latter amount, he said in his affidavit.

Because the Uwens had chosen a refund on completion, they had no contract with him and acceptance of this option stipulated that the laws of Bulgaria would apply in any dispute, he said.

The Uwens claimed Mr O'Reilly repeatedly ignored letters seeking a refund and was "deliberate" in trying to avoid refunding them.

If Mr O'Reilly was sued in the Bulgarian courts, he would say there was no contract between his firm and the couple, they said. Despite Mr O'Reilly saying in May 2007 that the resort was complete, they had not been repaid."

The Uwens were essentially told to go sue Neill O'Reilly in Bulgaria although the judge did agree that they appeared to have a case and granted them costs.

The full story is here.

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For independent articles on the Bulgarian property market click here.

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