Banks have withdrawn all financing from his company, Jurgen Schneider, which owns some of the most prominent buildings in Frankfurt.
The company's debts are thought to be DM3bn-DM8bn (pounds 1.2bn-pounds 3.3bn) and shares in Deutsche Bank fell amid rumours that the bank may have exposure of more than DM1bn. Some reports suggest that up to 50 banks could be affected.
But the most bizarre element of the story involves Mr Schneider, who appears to have vanished. The Schneider group said that the chairman had told the board 'to our surprise and consternation' that he had withdrawn from the company on advice of his doctors after falling ill at Easter.
'We are unaware of his whereabouts,' the company added.
Mr Schneider prided himself on having renovated many prestigious German properties, including the Zeil Galerie in Frankfurt.
Industry sources say Mr Schneider did not usually sell the properties he renovated but used the restored buildings as collateral for further purchases.Reuse content