Drac: Bankruptcy in Spain as housing downturn bites

I am hearing from multiple sources that the large property company Drac, based in Mallorca in Spain, has filed for bankruptcy. The company had 600 or 700 million euros of debt at the time of its bankruptcy, depending upon the source. Drac had constructed more than 2,000 apartment flats on the Island and has a property empire stretching to Eastern Europe and the Caribbean.

Drac filed for voluntary bankruptcy and does not plan to enter liquidation. I have not yet ascertained who the major creditors are. When I do, I will update this story. This is the largest property bankruptcy in the Balearic Islands ever and should be a harbinger of things to come. Expect large writedowns at banks exposed to the property market in Spain.

Foreign-language Sources
Immobilienkrise sorgt für Mallorcas größte Pleite, Handelsblatt, 17 Jun 2008
Vicente Grande presenta la suspensión de pagos en el grupo inmobiliario Drac, El Mundo, 17 Jun 2008
La inmobiliaria del presidente del Mallorca suspende pagos, El Pais, 17 Jun 2008