How Armonia Braila mall's closure came about

Two major factors behind the closing of Armonia Braila mall in the summer of 2009 and its subsequent insolvency were "the suspension of the rental contract sealed with Carrefour in the wake of the small visitor flow" and the "negative signals sent by Leonardo and Altex, which had inked rental contracts, but did not open stores," reads a report by Casa de Insolventa Transilvania (Transylvania Insolvency Firm), the legal administrator of Red Project Three, the developer of the project.

The mall went insolvent as a result of the low number of shoppers and visitors, around 2,000-3,000 people daily, having debts of around 35m euros (150m RON).

Of the 33 creditors registered as such, the biggest sum to be recouped is that of Volksbank, which has an exposure of 120.7m RON (28m euros), namely 80% of the total value of the debt.

The representatives of Casa de Insolventa Transilvania believe that "the company now stands minimal chances to turn around", but will not propose for bankruptcy proceedings to be opened at the first meeting of lenders, scheduled for next week, waiting for RED representatives to submit a reorganisation plan by February 13, 2011 instead.

The representatives of the legal administrator recommend for the project to resume its operations.