#CuraumaCase / Our story
CURAUMA, THE NEW CITY (CHILE)
THE CURAUMA CASE (#casocurauma / #curaumacase)
2004
2011
September 27, 2011
While Curauma S.A. was still servicing the financing provided by Euroamérica Seguros de Vida S.A., the company hired Banmerchant for financial advisory services, tasking them with conducting a financial diagnosis and restructuring.
December 13, 2011
The board of Curauma S.A. approved the valuation of its land, conducted by expert Rubén Miralles Caicedo, at a value of 16.9 million UF, approximately 691 million USD, as reported in a material event disclosed to the CMF (Financial Market Commission).
2012
March 30, 2012
On the same day, BDO Auditors and Consultants Ltd. informed Curauma S.A., at around 8:00 p.m., that they were unable to issue an opinion on the company’s financial statements due to concerns with the land valuation. This situation, which lasted into the early hours, prevented Curauma S.A. from presenting its financial statements as of December 31, 2011. Consequently, the SVS (now CMF) suspended the company’s stock transactions, halting all operations, including sales and financing.
April 2, 2012
Paul Fontaine Benavides was tasked with a capital increase of 50 million USD.
May 8, 2012
Curauma S.A. reached an agreement with the Hurtado Vicuña Group to take control of the company through a stock sale and capital increase.
September 1, 2012
An agreement was reached with Euroamérica Seguros de Vida S.A. to repurchase the land on September 1, 2013.
December 27, 2012
Curauma S.A. secured a tax payment agreement with the General Treasury of the Republic (TGR).
2013
January 7, 2013
Attorney César Millán Nicolet, who would later become the trustee in Curauma S.A.’s bankruptcy, embarked on a trip to Punta del Este, Uruguay, accompanied by his friend Nicholas Davis Lecaros, their wives, and other couples. This pleasure trip, taken aboard a private charter owned by Aerobenic S.A., a company linked to Euroamérica, would mark the beginning of events that would shape the future of Curauma S.A. The group returned to Santiago on January 11, 2013, on LAN (Latam) flight No. 901 from Uruguay.
April 2013
Curauma S.A.’s management filed a Preventive Judicial Agreement to restructure its financial situation. This agreement included an orderly sale of assets and available property to creditors, as well as a 50 million USD capital increase.
The plan aimed to exercise the repurchase options for the land financed by Euroamérica Seguros de Vida S.A. and pay off the accumulated debts from 2004 to 2013. The project was oriented toward the development of a megaproject, considering the imminent adoption of the new Greater Valparaíso Zoning Plan on October 25, 2013, which would highlight the importance of the land in question. These lands had been valued at 500 million USD by a judicial expert in November 2011, making them key components of the financial process.
The agreement was processed before an arbitrator, attorney Diego Munita Claro, in Valparaíso, with the General Treasury of the Republic as the main creditor and decisive factor for its approval. The process was tense, with threats of lawsuits for malfeasance against the arbitrator. Despite several meetings between representatives of Curauma S.A. and the General Treasury to agree on modifications to the agreement, the Treasury’s representative, attorney Víctor Vidal Gana, did not attend the creditor’s meeting on November 7, 2013, where the agreement was to be voted on. His absence prevented the legally required quorum, resulting in the rejection of the agreement.
August 6, 2013
Euroamérica Seguros de Vida S.A. unilaterally sold the Curauma S.A. land to its affiliate company, Administraciones y Proyectos Euroamérica S.A., a small business entity with minimal paid-up capital and no staff. It is worth noting that the sale price represented approximately 40% of Euroamérica Seguros de Vida S.A.’s assets, meaning any legal actions announced by Curauma S.A. would significantly affect the disposition of the land, greatly impacting Euroamérica’s financial situation.
August 8, 2013
Curauma S.A. filed a lawsuit in the 19th Civil Court of Santiago, seeking the restitution of the land in dispute. The lawsuit included charges such as usury, contract simulation, residual fraud, and incompatible negotiations. Due to financing operations involving Banco de Chile, the lawsuit was expanded to include Administraciones y Proyectos Euroamérica S.A. and Banco de Chile, accusing them of contract simulation. It was argued that the transfer of ownership was a joint maneuver between Euroamérica Seguros de Vida S.A. and Banco de Chile to evade precautionary measures on the disputed properties. Furthermore, it was claimed that there was no real intention to provide credit for the acquisition of the land, considering both the sale agreement and mortgage as simulated actions.
August 30, 2013
Curauma S.A. filed a criminal complaint against the executives of Euroamérica Seguros de Vida S.A. and Administraciones y Proyectos Euroamérica S.A., accusing them of usury, fraud, and simulation. (On February 21, 2014, Manuel Cruzat Infante would file a similar complaint.)
September 25, 2013
The 19th Civil Court of Santiago issued a precautionary measure prohibiting the execution of any acts or contracts involving the land Curauma S.A. sought to recover.
September 27, 2013
Attorney Julio Bustamante Jeraldo, former director of Curauma S.A., filed for the bankruptcy of Curauma S.A. in Santiago, despite the case being properly assigned to Valparaíso, where Curauma S.A. had its legal domicile according to official records.
The bankruptcy petition was based on an alleged debt of approximately 80 million Chilean pesos, approximately 86,000 UDS, supposedly arising from consultancy fees. However, this debt lacked the necessary tax support, and no evidence of payments made or pending was presented to the directors, in accordance with the Securities Law, the Corporations Law, and the regulations of the Securities and Insurance Superintendency (SVS). The choice of Santiago as the location for filing bankruptcy, as opposed to the proper court in Valparaíso, raised suspicions about the legality of the process.
Curauma is a city project conceived in the 1970s. However, its actual development began in 1996, marking a significant national precedent in terms of private urban megaprojects.
The land where this project is located was once part of the “Forestal Valparaíso” estate, situated in the Valparaíso Region, central Chile, within the namesake municipality. Its proximity to two major urban centers in the Central Macro Zone—9.3 miles from the Valparaíso Metropolitan Area (AMV) and approximately 46.6 miles from the Santiago Metropolitan Area (AMS)—along with its strategic location next to Route 68, provides it with strong connectivity to the key hubs shaping the region’s urban structure.
The city of Curauma spans 10,625 acres, formerly part of the “Las Cenizas” and “La Luz” estates in the Valparaíso municipality, with areas of 4,942 acres and 5,683 acres, respectively. The scale of the project is substantial, covering a larger area than the city of Viña del Mar, which spans 7,562 acres. Additionally, Curauma represents 34.4% of the available land for urban expansion in the AMV. It is worth noting that the areas allocated for natural use within the project constitute 23% in Fundo La Luz and 29.8% in Fundo Las Cenizas.
Curauma S.A., the company owning the Forestal Valparaíso, La Luz, and Las Cenizas estates, has been connected since its inception to the Chilean entrepreneur Manuel Cruzat Infante. This company is responsible for the most significant real estate development in Chile’s central region in recent decades, named “Curauma, the New City.” The company designed, planned, and organized this new city, envisioned from the outset as the natural expansion of Greater Valparaíso, connecting the two main urban centers in the country—Santiago and Valparaíso—while strategically becoming a development hub for the Central Macro Zone. This vision includes a renewed port city of Valparaíso in a complementary and unified development.
Cruzat’s strategy for the execution of the real estate project involved the comprehensive management of the project and the sale of large plots to other developers, who would then design, build, and market their own projects.
THE CURAUMA CASE (#casocurauma / #curaumacase)
2004
Euroamérica Seguros de Vida S.A. and Empresas CB, the parent company of Curauma S.A., entered into a financing agreement for 715,000 Unidades de Fomento (UF), approximately 25.5 million USD. This eight-year financing, structured as a leasing and sale agreement with a repurchase option, was earmarked for land in the upper Valparaíso area to develop the Curauma and Las Cenizas projects.
September 27, 2011
While Curauma S.A. was still servicing the financing provided by Euroamérica Seguros de Vida S.A., the company hired Banmerchant for financial advisory services, tasking them with conducting a financial diagnosis and restructuring.
December 13, 2011
The board of Curauma S.A. approved the valuation of its land, conducted by expert Rubén Miralles Caicedo, at a value of 16.9 million UF, approximately 691 million USD, as reported in a material event disclosed to the CMF (Financial Market Commission).
2012
March 30, 2012
Agreements were reached for several major transactions, such as the sale of 24.7 acres to Pacal and Desco, 49.4 acres to Aconcagua, Enaco, and Invica, and 17.3 acres to Octavio Díaz. Additional financing deals were secured with Norte Sur, Eurocapital, Mackenna, and Peña, set to close the following week. Further land sales to Munita, Galilea, and other companies were projected for April, along with the acquisition of 61.8 additional acres in the northern sector in May.
On the same day, BDO Auditors and Consultants Ltd. informed Curauma S.A., at around 8:00 p.m., that they were unable to issue an opinion on the company’s financial statements due to concerns with the land valuation. This situation, which lasted into the early hours, prevented Curauma S.A. from presenting its financial statements as of December 31, 2011. Consequently, the SVS (now CMF) suspended the company’s stock transactions, halting all operations, including sales and financing.
April 2, 2012
Paul Fontaine Benavides was tasked with a capital increase of 50 million USD.
May 8, 2012
Curauma S.A. reached an agreement with the Hurtado Vicuña Group to take control of the company through a stock sale and capital increase.
September 1, 2012
An agreement was reached with Euroamérica Seguros de Vida S.A. to repurchase the land on September 1, 2013.
December 27, 2012
Curauma S.A. secured a tax payment agreement with the General Treasury of the Republic (TGR).
2013
January 7, 2013
Attorney César Millán Nicolet, who would later become the trustee in Curauma S.A.’s bankruptcy, embarked on a trip to Punta del Este, Uruguay, accompanied by his friend Nicholas Davis Lecaros, their wives, and other couples. This pleasure trip, taken aboard a private charter owned by Aerobenic S.A., a company linked to Euroamérica, would mark the beginning of events that would shape the future of Curauma S.A. The group returned to Santiago on January 11, 2013, on LAN (Latam) flight No. 901 from Uruguay.
April 2013
Curauma S.A.’s management filed a Preventive Judicial Agreement to restructure its financial situation. This agreement included an orderly sale of assets and available property to creditors, as well as a 50 million USD capital increase.
The plan aimed to exercise the repurchase options for the land financed by Euroamérica Seguros de Vida S.A. and pay off the accumulated debts from 2004 to 2013. The project was oriented toward the development of a megaproject, considering the imminent adoption of the new Greater Valparaíso Zoning Plan on October 25, 2013, which would highlight the importance of the land in question. These lands had been valued at 500 million USD by a judicial expert in November 2011, making them key components of the financial process.
The agreement was processed before an arbitrator, attorney Diego Munita Claro, in Valparaíso, with the General Treasury of the Republic as the main creditor and decisive factor for its approval. The process was tense, with threats of lawsuits for malfeasance against the arbitrator. Despite several meetings between representatives of Curauma S.A. and the General Treasury to agree on modifications to the agreement, the Treasury’s representative, attorney Víctor Vidal Gana, did not attend the creditor’s meeting on November 7, 2013, where the agreement was to be voted on. His absence prevented the legally required quorum, resulting in the rejection of the agreement.
August 6, 2013
Euroamérica Seguros de Vida S.A. unilaterally sold the Curauma S.A. land to its affiliate company, Administraciones y Proyectos Euroamérica S.A., a small business entity with minimal paid-up capital and no staff. It is worth noting that the sale price represented approximately 40% of Euroamérica Seguros de Vida S.A.’s assets, meaning any legal actions announced by Curauma S.A. would significantly affect the disposition of the land, greatly impacting Euroamérica’s financial situation.
August 8, 2013
Curauma S.A. filed a lawsuit in the 19th Civil Court of Santiago, seeking the restitution of the land in dispute. The lawsuit included charges such as usury, contract simulation, residual fraud, and incompatible negotiations. Due to financing operations involving Banco de Chile, the lawsuit was expanded to include Administraciones y Proyectos Euroamérica S.A. and Banco de Chile, accusing them of contract simulation. It was argued that the transfer of ownership was a joint maneuver between Euroamérica Seguros de Vida S.A. and Banco de Chile to evade precautionary measures on the disputed properties. Furthermore, it was claimed that there was no real intention to provide credit for the acquisition of the land, considering both the sale agreement and mortgage as simulated actions.
August 30, 2013
Curauma S.A. filed a criminal complaint against the executives of Euroamérica Seguros de Vida S.A. and Administraciones y Proyectos Euroamérica S.A., accusing them of usury, fraud, and simulation. (On February 21, 2014, Manuel Cruzat Infante would file a similar complaint.)
September 25, 2013
The 19th Civil Court of Santiago issued a precautionary measure prohibiting the execution of any acts or contracts involving the land Curauma S.A. sought to recover.
September 27, 2013
Attorney Julio Bustamante Jeraldo, former director of Curauma S.A., filed for the bankruptcy of Curauma S.A. in Santiago, despite the case being properly assigned to Valparaíso, where Curauma S.A. had its legal domicile according to official records.
The bankruptcy petition was based on an alleged debt of approximately 80 million Chilean pesos, approximately 86,000 UDS, supposedly arising from consultancy fees. However, this debt lacked the necessary tax support, and no evidence of payments made or pending was presented to the directors, in accordance with the Securities Law, the Corporations Law, and the regulations of the Securities and Insurance Superintendency (SVS). The choice of Santiago as the location for filing bankruptcy, as opposed to the proper court in Valparaíso, raised suspicions about the legality of the process.
October 25, 2013
The new Greater Valparaíso Regulatory Plan (Premval) was enacted, which reclassified the majority of the disputed Curauma-Las Cenizas land as urban extension. This had a significantly positive effect on its valuation.
November 7, 2013
The representative of the General Treasury of the Republic, attorney Víctor Vidal Gana, failed to attend the creditor meeting where the agreement was to be voted on, despite being present on the premises. His absence resulted in the lack of the legally required quorum, leading to the rejection of the agreement.
November 11, 2013
Curauma S.A.’s management filed an appeal with the Valparaíso Court of Appeals against the ruling issued by the trustee, attorney Diego Munita Luco.
November 22, 2013
Euroamérica Seguros de Vida S.A. and Administraciones y Proyectos Euroamérica S.A. filed a lawsuit against Curauma S.A. in an arbitration proceeding for breach of contract, seeking compensation for lost profits and direct damages amounting to approximately 40 million USD. This amount was verified during Curauma S.A.’s bankruptcy proceedings, and both companies participated with full voting rights in the creditors’ meetings.
December 18, 2013
Despite what would seem logical and contrary to the rules that usually govern the assignment of cases in the Chilean Judiciary, which are managed by the Administrative Corporation of the Judiciary (CAPJ), this particular case was unexpectedly given to the 2nd Civil Court of Santiago. This court was led by Judge Inelie Durán Madina. Typically, cases are assigned based on a strict algorithm designed to ensure that they are distributed fairly and randomly among the courts.
This court declared the bankruptcy of Curauma S.A. in response to a petition filed by attorney Julio Bustamante Jeraldo, a former director of Curauma S.A. César Millán Nicolet was appointed as the trustee for the process. It is worth noting that the bankruptcy was declared despite a pending appeal with the Valparaíso Court of Appeals.
December 20, 2013
On December 20, 2013, César Millán Nicolet was sworn in as trustee, and on December 23, he appeared at Curauma S.A.’s offices to announce the bankruptcy and take control of the company’s management.
It is relevant to point out that in 2013, César Millán Nicolet traveled to Spain on February 11 and returned to Chile on December 20, just two days after the bankruptcy was declared.
Note:
Between 2004 and 2013, the parent company of Curauma S.A. (Empresas CB) paid Euroamérica Seguros de Vida S.A. a total of 1,040,775 Unidades de Fomento (UF) (approximately 37 million USD), covering the original capital of 715,000 UF (approximately 25.5 million USD) plus an additional 45.6% over eight years. This represents an annual compounded return of UF +7.36%, well above the prevailing Maximum Conventional Rate for similar loans.
The Unidad de Fomento (UF) is a Chilean inflation-indexed unit of account used for financial transactions like loans, real estate, and contracts. Its value is adjusted daily based on inflation to preserve purchasing power.
2014
January 13, 2014
Trustee César Millán Nicolet filed a complaint with the Public Prosecutor’s Office based on Article 220 No. 7 of Book IV of the Commercial Code.
January 27, 2014
César Millán Nicolet revoked the powers previously granted by Curauma S.A. before the bankruptcy declaration, without following the procedures outlined in Book IV of the Commercial Code or consulting the attorneys handling the case.
February 28, 2014
Administraciones y Proyectos Euroamérica S.A. acquired credits on the Santiago Stock Exchange against Curauma S.A., participating in creditors' meetings with interests opposing those of minority shareholders.
September 14, 2014
The newspaper "El Mercurio" published an article about the Fundación Generación Empresarial, where the owner of Euroamérica Seguros de Vida S.A. holds the position of vice president, creating a conflict of interest.
October 14, 2014
At the Extraordinary Meeting of Creditors of Curauma S.A., a settlement was approved with Euroamérica Seguros de Vida S.A., omitting crucial information that was reported to the Superintendency of Insolvency and Re-entrepreneurship.
October 30, 2014
Euroamérica Seguros de Vida S.A. commissioned a financial analysis and legal report to support its position in the lawsuit against the representatives of Curauma S.A.
December 1, 2014
A complaint was filed with the Superintendency of Banks regarding the irregular granting of a loan to Administraciones y Proyectos Euroamérica S.A.
December 7, 2014
Manuel Cruzat Infante expanded his lawsuit to include the executives of Banco de Chile involved in the operation with Euroamérica Seguros de Vida S.A.
December 15, 2014
Curauma S.A. filed a criminal complaint against the bankruptcy trustee César Millán Nicolet and others for offenses specified under Article 38 of Book IV of the Commercial Code.
December 16, 2014
At the request of trustee César Millán Nicolet, the Valparaíso Court of Appeals dismissed Curauma S.A.’s appeal.
2015
Throughout 2015, sanctions were imposed on the trustee’s attorneys, new lawsuits and complaints were filed, and ongoing conflicts emerged.
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ATTACHMENTS:
CONFLICT BETWEEN CURAUMA S.A. AND EUROAMÉRICA SEGUROS DE VIDA S.A.
1. THE FINANCING OPERATION (2004)
In 2004, Euroamérica Seguros de Vida S.A. and Empresas CB, the parent company of Curauma S.A., signed a financing agreement for 715,000 UF, approximately 25.5 million USD.
The financing, structured as a leasing agreement with a repurchase option, was directed towards land in Upper Valparaíso for the development of the Curauma and Las Cenizas projects. Between 2004 and 2013, Curauma S.A., through Empresas CB, paid Euroamérica Seguros de Vida S.A. a total of 1,040,775 UF, approximately 44 million USD, resulting in an annual compounded return of UF +7.36%.
In addition, Empresas CB had to pay an additional 907,081 UF, approximately 38 million USD, to reclaim the land by August 31, 2013, which would have increased the annual return to UF +21.43%.
2. THE CONFLICT (2013)
In August 2013, Curauma S.A. filed a lawsuit seeking the return of the land, arguing that it had already been fully paid for.
Shortly before the lawsuit, Euroamérica Seguros de Vida S.A. sold the land to its related entity, Administraciones y Proyectos Euroamérica S.A. (APE).
Curauma S.A.'s legal action affected the guarantee of a loan granted by Banco de Chile to APE, leading to financial complications.
A significant discrepancy was noted between the appraised value of the land and the related sale price, which could impact the oversight of the Internal Revenue Service (SII).
3. THE EUROAMÉRICA GROUP DURING THE CONFLICT
The Euroamérica Group, led by Euroamérica Seguros de Vida S.A., declared assets of $150 million USD and managed assets worth over $2.85 billion USD.
However, it faced insolvency risks due to low interest rates and high debt levels, threatening its ability to meet annuity contract obligations.
Euroamérica Seguros de Vida S.A. had paid dividends and financial advisory fees to its controlling shareholder, recovering more than four times its initial investment over ten years.
The insolvency risk jeopardized not only its ability to meet annuity contract obligations but also public trust and fiscal interests.
On October 2, 2023, the Financial Market Commission (CMF) reported that its board had sanctioned Euroamérica Seguros de Vida S.A. with a fine 4,200 USD for violations of financial reporting regulations that must be submitted to the CMF.
As of September 2024, there are ongoing lawsuits and criminal complaints against those responsible for the irregularities in the Curauma Case.
CURAUMA S.A.
#CasoCurauma #CuraumaCase