The Cursach Group, flagship establishments of which are BCM, Mega Park and Titos, filed for pre-insolvency on 9 March. It is understood that this measure applies to all companies within the group and has come about because of uncertainties regarding the Mega Park operation, among others.
The group turned over some 70 million euros last year and declared a profit. However, because of Palma town hall interventions in respect of Mega Park, it is possible that the group will be unable to open the Arenal club. In Magalluf, BCM has been closed since April last year following intervention by Calvia town hall.
It is said that the group is already in negotiation with financial institutions and suppliers. The filing of pre-insolvency is a defensive measure that enables these negotiations. A company can inform a court that it has initiated negotiations to reach agreement on refinancing. This is pre-insolvency, for which there is a three-month period designed to stave off being declared insolvent. If agreement is not reached after three months, there is a further month before insolvency has to be requested. A court has to declare a company insolvent. In doing so, interest on debts is frozen and there remains the possibility of renegotiating payments. It does not necessarily mean the cessation of commercial activities, and insolvency can indeed be temporary.