© Domingos Oliveira / RTL
The Cenaro real estate group has gone bankrupt and is currently under investigation. What does this mean for the company's employees?
There has been a lot of speculation in the real estate market in recent years. New players appeared, old ones disappeared. But, rarely have we seen a bankruptcy of such proportions, says Jean-Luc de Matteis of the construction section at the Independent Luxembourg Trade Union Confederation (OGBL):
"We have had several bankruptcies in the construction sector in recent years. Bankruptcies that were often unrelated to the activities themselves. There often were plenty of jobs, but the problem was with management. This bankruptcy now is making waves because it is linked to so many other things."
The most notable problem seemed to be their investment policies. In order to buy land, the company Cenaro Capital collected funds from investors at their own risk and therefore promised an interest rate of 10% and more. The capital was then invested in the Cenaro Group for various real estate projects. The problem: in 2021, the company submitted 187 sales to the notary compared to only 22 the following year. A difficult situation for the future owners, but also for Cenaro employees.
Minister of Labour, Employment and the Social and Solidarity Economy Georges Engel addressed the case in an RTL interview on Monday:
"There might be a lawsuit because the money might not have been used correctly. And as long as there is a question mark over the whole procedure, the situation of the people who worked there is not good. We have to make sure we help these people as soon as possible."
Read: One person arrested in investigation against real estate group
After the first rumours started to make rounds just before Christmas last year, some staff members contacted the union. In the event of a bankruptcy, the bankruptcy law applies and a trustee is appointed to take care of the company's remaining bills. Who still pays the company and whom does it still have to pay? De Matteis explains:
"There is a procedure saying that people are entitled to their salary anyway. Then they receive a salary for the month of the bankruptcy, the following month, and half of the trial period. But, there are still calculations to be made."
According to De Matteis, compensation is usually paid by the National Employment Agency (ADEM) after eight to 14 weeks:
"To prevent people from falling into an extremely complicated economic situation, there is the possibility that when they have a claim, they can apply to a social office for an advance. Since the bankruptcy of Socimmo in 2012, we have also had a system whereby, from a certain delay in the payment of salaries, the ADEM intervenes earlier. This means that here too, there are advances."
The delays in wage payments at Cenaro go back even further. And what about the customers? It appears that as long as the Cenaro case is in the hands of the public prosecutor's office, there will be no quick solution.