Debts left behind by Nordis insolvency: 729 million lei

CITR has released today the preliminary analysis of Nordis Management SRL’s activity and debt structure.

As the judicial administrator of Nordis Management SRL, CITR has released preliminary conclusions on the company’s activity over the past three years, the structure of its creditor claims, and possible restructuring scenarios.

While Nordis Management SRL’s business model—financing real estate projects through advance payments from buyers—is common in the industry, the company has faced a liquidity crisis preventing project completion. This was caused by multiple factors, primarily: failure to meet agreed completion deadlines, rapid decapitalization due to a sharp drop in sales volume, financial obligations arising from missed deadlines, and the simultaneous development of multiple projects, negatively impacting the entire Nordis Management SRL portfolio.

Creditors’ Table and Project Completion Impact

The preliminary creditors’ table, submitted to the court on January 31, 2025, outlines the total debt of the company at the time of entering insolvency. The total accepted claims amount to 728,879,237.17 lei (around 145 million euros), of which 422,694,049.46 lei are potential claims, mainly arising from ongoing contractual obligations. These claims are listed under the suspensive condition that they become enforceable only if the company fails to meet its primary obligations, such as property transfers, handovers, finishing, or furnishing.

Among Nordis Management SRL’s creditors—besides traditional suppliers, tax authorities, and employees—three main categories of client claims were identified:

1. Clients with ongoing sale-purchase agreements – Their primary right is to receive the promised apartments. If delivery is not possible, they can recover their advance payments. If projects are completed and apartments are delivered as promised, total debt could decrease by over 350 million lei.
2. Clients who withdrew from the project – These clients have opted for contract termination and are only entitled to recover their invested amounts.
3. Clients who own apartments that are unfinished, unfurnished, or not handed over – These creditors have registered claims for the full purchase price paid. If their properties are not delivered as agreed, they have the option to terminate the contract and seek a refund.

Delivering and finishing the apartments could reduce total debt by more than 55 million lei. Additionally, the overall creditor claims have grown by over 40 million lei due to penalties, interest, litigation costs, and damages.

According to the law, creditors have seven days from the publication of the table in the Insolvency Proceedings Bulletin to submit objections.

Causes of Insolvency

1. Simultaneous development of multiple projects (Mamaia, Sinaia, Brașov) – In 2019-2020, Nordis Management SRL launched three real estate projects simultaneously, financing them through advance payments. The lack of separate financial management for each project created financial interdependence, increasing risk exposure across the portfolio.
2. Lack of cost/profit center allocation – The entire company operated as a single unit without individual financial tracking for each project. This led to inefficient cost control, inability to assess project profitability, and financial contamination between viable and unprofitable projects.
3. Inaccurate cost estimates – Due to the absence of separate financial tracking, cost estimates were significantly incorrect. For example, the estimated cost for land stabilization in Sinaia was 3.3 million lei, but actual costs reached 15.09 million lei, exceeding initial estimates by 9.53 million lei.
4. Breach of contractual obligations and project delays – Failure to meet deadlines resulted in financial penalties and damage claims, further straining liquidity. Total recorded penalties, fines, and damages in the analyzed period amounted to 42.33 million lei. Unfulfilled contractual obligations also led to contract terminations and refund demands, negatively impacting cash flow.

Nordis Management SRL’s business model relies on transactions within its corporate group. This requires cross-verification of contracts and transactions with affiliated companies. To determine whether company management bears personal liability for the insolvency, CITR will analyze financial records from Nordis Mamaia SRL, Nordis Hotel SRL, and Lampp Building Project SRL, all of which are also in insolvency. A technical assessment of ongoing projects and a forensic accounting investigation of intercompany transactions will be conducted.

Restructuring Scenarios

Completing ongoing real estate projects is crucial for protecting Nordis Management SRL’s investors. A bankruptcy scenario would lead to asset liquidation in their current state, offering limited recovery for creditors. Current restructuring options include:

• Nordis Mamaia – A phased completion plan by selling excess properties to generate capital, enabling the first building’s registration and delivery by the 2025 summer season. Discussions are also underway with investors for additional funding.
• Nordis Brașov – Advanced negotiations with an investor for project acquisition and completion, ensuring apartment deliveries.
• Nordis Sinaia – No interested investors have been identified yet, but market exploration continues.

If these projects are completed, 414 units out of 1,966 under development will be available for sale.

Next Steps

During this initial insolvency phase, CITR has:

• Notified over 1,500 creditors
• Analyzed 1,000+ contracts and claims
• Conducted a preliminary insolvency cause analysis
• Started inventory and asset valuation
• Reviewed financial records covering 2021-2024 (over 150,000 transactions)
• Examined 1,000 creditor claims (about 100,000 pages of documents)