Financial institution accounts of Bucharest Municipality frozen by a businessman

The financial institution accounts of the Bucharest Municipality are frozen as a result of the town fails to pay monetary compensation to a businessman. It’s not a primary on this dispute that began twenty years in the past.

The mayor of Bucharest Nicuşor Dan introduced on Could 4 that the municipality financial institution accounts are frozen by Romania’s judiciary.

As such, the administration is simply in a position to pay working bills like salaries and subsidies however Bucharest just isn’t in a position to fund any funding and might want to pause building and renovation works.

The freeze of Romania’s capital metropolis financial institution accounts has been requested by Costică Constanda. Bucharest fails to pay him the 120 million euros (US$127 million) of compensation he gained in a long-standing actual property growth dispute.

“Our intention is to pay as a result of it’s a authorized obligation. However we can not pay 120 million euros directly,” stated Nicuşor Dan who has been negotiating staggered funds. The debt is roughly 10% of the finances of the town for 2022 (5.7 billion lei; $1.2 billion). However it didn’t provision the finances a lot for paying the lawsuit – solely 156 million lei ($33 million) provisioned in civil damages – in response to HotNews. About 670 million lei ($143 million) have been provisioned in funding bills.

And it’s not the primary time Bucharest’s financial institution accounts are frozen over the problem.

Litigation of 20 years between Bucharest and Costică Constanda

The state of affairs began on the daybreak of the 2000s with litigation on the possession of three hectares (7 acres) of land, price lots of of 1000’s of euros on the time, close to the Herastrau Park, one of many largest parks of the capital often known as King Michael I Park at this time. Eugen Lincaru and Dumitru Tudor have been ultimately acknowledged because the rightful house owners of the areas, whose rights – in some way – have been later transferred to Costică Constanda.

However the metropolis had already constructed luxurious properties within the Nineteen Nineties on this space referred to as Satul Francez, the French quarter. The 7 ha (14 ac) of the French Quarter is a high-end residential space of Bucharest with a number of the costliest rents, initially devoted to expatriates, officers and worldwide companies.

Traian Băsescu, who served because the mayor of Bucharest between 2000 and 2004 earlier than serving because the president of Romania for ten years, proposed to get again the parcel of the French quarter by buying and selling it with a close-by lot of equal dimension and worth: the Bordei Park.

The park was public property and have become personal in 2003 in order that Constanda may personal it. Constanda supposed to construct an actual property advanced across the park. However the Basic Council of Bucharest was against the development of buildings on this inexperienced area and by no means accepted the proposed city plan.

The actual property developer then introduced the case to courtroom. He gained the case and was to obtain nearly 30 million euros ($31.7 million on the present alternate price) in compensation, a call upheld by the Bucharest Enchantment Court docket.

Constanda then in 2007 agreed with mayor Adrian Videanu to get again the lot within the French Quarter the place he would be capable to elevate 5-story buildings as an alternative of receiving the monetary compensation.

However once more, the Council of Bucharest in 2009, beneath a brand new mayor Sorin Oprescu, didn’t approve the actual property challenge, or a minimum of not earlier than a brand new judicial process began. Constanda had bought a part of the lot to a building firm however the contract fell off as a result of the city planning was not accepted on time. Furthermore, in 2008, Bordei Park turned public property once more, leaving one other swap off the desk.

From lots of of 1000’s to tens of millions of euros

In July 2011, the Court docket of Bucharest dominated in favor of the actual property developer stating that the town ought to compensate him with about 165 million euros ($174 million). Town appealed the choice in 2013 which dominated once more in favor of Constanda however lowered the compensation to roughly 115 million euros.

Seized by the municipality, the Excessive Court docket of Cassation and Justice, Romania’s Supreme Court docket, then ordered a retry, which Constanda gained once more in 2018. The Excessive Court docket ultimately rejected Bucharest’s attraction and dominated that it wanted to compensate Constanda with 75 million euros for the injury plus penalty charges, for a complete of about 115 million euros, or 120 million euros in response to the present mayor after new calculations of late penalties. The Excessive Court docket resolution was ultimate and couldn’t be contested.

In August 2020, Costică Constanda already requested to freeze the accounts of Bucharest, a state of affairs that lasted till Could 2021. He had agreed that the town would give him 11,000 sq. meters within the French Quarter, with possession of the buildings, valued at about 35 million euros.

Mayor Gabriela Fiera stated the town already paid 17 million euros and would scale back its debt to Constanda by 40% with the answer. However the Basic Council repeatedly rejected the answer. Nicuşor Dan was then a part of the opposition who refused to approve it, and a declared candidate to turn into mayor of the town a number of months later.

However because the metropolis corridor refused to surrender any land, Constanda requested the accounts to be frozen. And now, as negotiations haven’t gone properly once more, he has requested to freeze accounts of the town once more.

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