Schneider creditors could lose pounds 1.6bn, liquidator warns

CREDITORS of the fugitive property tycoon, Jurgen Schneider, could lose DM4bn ( pounds 1.61bn). Gerhard Walter, the court-appointed liquidator, told an overflowing creditors' meeting in Konigstein, that 'instead of the DM3.7bn of net assets claimed by Schneider, there is a negative worth of at least DM3.5bn and probably DM4bn.'

Mr Schneider and his wife, Claudia, disappeared last month leaving debts of DM5.5bn. Mr Walter estimated that the Schneider group had realisable assets of just DM2bn.

The developer, recently described as one of Germany's most enterprising and colourful property developers, is under investigation for fraud and tax evasion, and an international warrant for his arrest has been issued.

Mr Walter said that investigations into the hugely complex structure of the Schneider group had revealed that 95 per cent of the business was owned by Claudia and the remainder by Jurgen.

The liquidators confirmed that the couple had transferred DM250m in March to an unnamed London bank, and from there on to a third country. Mr Schneider is rumoured to be in Paraguay. But the Federal Criminal Office in Germany said yesterday it still had no trace of the whereabouts of Mr Schneider or his wife.

A review of the property group's financial situation showed the Schneiders were heading deeper into debt. The running costs massively outweighed actual or potential income, said Mr Walter. 'Schneider bought too expensively, built too expensively and managed too expensively,' he said. The Schneiders held 121 properties in 14 German cities, of which 41 are in Leipzig and 24 in Frankfurt.

Deutsche Bank is the largest of the 50 bank creditors, owed some DM1.2bn. The bank faced renewed criticism at yesterday's meeting for its handling of the crisis.