Germany's largest bank, which holds DM1.2bn ( pounds 488m) in loans to the Schneider group, confirmed it had received a letter on 7 April from the developer saying he was leaving the group, and requesting a new bridging loan. By 10 April, the bank said that its internal investigations had reached the conclusion that the Schneiders had fled the country and the company was in severe difficulties.
Only the next day did the imminent collapse of Germany's biggest private building empire become public knowledge. Deutsche said it had not seen the importance of informing other creditors, and rejected the prosecuting office's description of the bank's handling of the affair as bizarre. Job Tilmann, spokesman for the prosecutor's office, said Deutsche's actions were being examined to see if they amount to hindering bankruptcy proceedings.
Yesterday Technoteam Bauconsult, the second Schneider group company, responsible for building projects, filed for bankruptcy, following the main operating company last Friday. But neither of these two firms hold titles to any of the 80 or so properties owned by the Schneider group. The district court in the town of Konigstein, where the group is based, said that bankruptcy proceedings had now been launched by an unnamed party against Mr Schneider and his wife, who own the properties through a shadowy holding company.
Mr Schneider, whose whereabouts are unknown, is being investigated for fraud, with the Federal Criminal Office now being brought in to assist the prosecutor. The Schneiders fled the country over a week ago, leaving debts of DM5bn and DM250m owed to contractors.
Gunter Rexrodt, the German Economics Minister, meanwhile kept up pressure on the big banks to help prevent the collapse of the empire turning into disaster for hundreds of small building firms.Reuse content