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The creditors of the insolvent department store chain Galeria Karstadt Kaufhof can only expect a manageable payment at the end of the insolvency proceedings. If the insolvency plan is accepted by the creditors’ meeting on May 28th, around 22.5 million euros will be available that can be distributed to the creditors, according to the plan from Galeria insolvency administrator Stefan Denkhaus. The document that Denkhaus submitted to the Essen district court at the end of April is available exclusively to Capital. 

Denkhaus writes that the creditors of the department store group could “probably” expect a total quota of 2.5 percent. The amount should therefore be paid out in two steps: First, the creditors should receive a “base quota” of probably 0.5 percent of their claims against the company. Initially 4.5 million euros are earmarked for this. A supplementary payment is planned for a later date, the amount of which “cannot yet be conclusively quantified,” according to the insolvency plan. This “improvement rate” is expected to be two percent. 

Denkhaus had already recently prepared those creditors whose claims were not specifically secured for a quota in the single-digit percentage range. At Capital’s request, a spokesman for the administrator said that Denkhaus expected an insolvency rate of “2.5 to 3 percent”. If Galeria receives payments from claims against companies belonging to the previous parent company Signa, which is also insolvent, this would “increase the insolvency rate”. 

In the event that the creditors’ meeting on May 28th does not approve the insolvency plan, the company will have to be broken up and wound up, warns the administrator in his insolvency plan. In this case, there would be “no distributable mass” – so the creditors would come away completely empty-handed.

Germany’s last large department store chain, with a recent turnover of 2.8 billion euros, is currently in its third insolvency proceedings since 2020. In January, Galeria filed for insolvency again as part of the series of bankruptcies at investor René Benko’s Austrian Signa Group. In the protective shield and insolvency proceedings in 2020 and 2022/2023, the creditors – such as suppliers, service providers, the Federal Employment Agency, social insurance and the state Corona rescue fund WSF – had already waived billions in total. 

At the beginning of April, the current insolvency administrator Denkhaus from the BRL law firm announced the sale of the chain to a consortium of US entrepreneur Richard Baker and former Coty boss Bernd Beetz after a week-long investor process. According to current status, 76 of the 92 Galeria branches are to be retained. The number of employees is to be reduced from 12,800 to 11,400. 

The current insolvency plan now provides insights into the situation at the previous Signa subsidiary after the new insolvency – and the planned restructuring steps for reorganization. In the document, Denkhaus estimates the claims of unsubordinated, unsecured creditors registered by the end of April at up to 886 million euros. These creditors are therefore mostly landlords, but also the Federal Employment Agency (for the insolvency money), social security institutions, employees and the tax authorities. The vast majority of the retail chain’s suppliers, on the other hand, benefit from trade credit insurance.

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