Nueva Rumasa conglomerate on verge of collapse

Facing a host of possible lawsuits, the commercial group Nueva Rumasa announced on Thursday that it has filed for bankruptcy protection so it can renegotiate its outstanding debt with its creditors and avoid being declared insolvent, the head of the family-owned conglomerate said.

José María Ruiz Mateos, the controversial founder of the group, told a news conference that Nueva Rumasa was forced to seek protection under a clause in the bankruptcy law because of "the monumental campaign" waged against his companies.

The original Rumasa group was expropriated by the government in 1983 with huge debts. According to filings obtained by EL PAÍS, Nuevo Rumasa owes some 76 million euros to different banks.

Nueva Rumasa, which owns food and dairy brands such as Clesa, Duhl and Trapa, as well as the Rayo Vallecano soccer team, has been suffering from severe cash-flow problems and has tried to raise money through different investment offerings.

The conglomerate has also come under the scrutiny of the CNMV security exchange watchdog, which has warned investors in Nueva Rumasa affiliates on seven occasions to seek advice before investing in its affiliates, which are registered in and controlled from offshore tax havens.

Social Security has embargoed the Ruiz Mateos family's properties for reported non-payment of contributions.