The two most important companies in the insolvent Signa Group of the Austrian investor René Benko are facing liquidation. On Monday afternoon, the creditors of the luxury real estate company Signa Prime Selection AG and the real estate developer Signa Development Selection AG will decide whether the portfolio of real estate and construction projects should be sold in an orderly manner and with higher returns – or quickly and possibly cheaper.
The insolvency administrators of the luxury real estate company Signa Prime Selection AG and the real estate developer Signa Development Selection AG have proposed trust solutions. According to both administrators, the aim of the trust is the orderly “complete utilization and distribution” of all assets in order to settle around 30 percent of the billions in claims. If the creditors of Signa Prime and Development do not agree to the plans, the real estate portfolios would be sold more quickly and probably for significantly lower sums in a so-called bankruptcy procedure.
Signa Prime also includes the unfinished Elbtower in Hamburg, the Berlin luxury department store KaDeWe and buildings of the Galeria Karstadt Kaufhof department store chain. Subsidiaries that hold shares in German properties would be excluded from trust management. However, they should also be liquidated after their properties have been sold, as stated in the insolvency administrator’s plan. In addition, the Austrian trustee would manage Signa Prime’s claims against its subsidiaries. Creditors of Signa Prime have registered claims of around 10.8 billion euros. The insolvency administrator has so far only recognized around 3.1 billion euros of this. Signa Development is faced with claims of 2.3 billion euros, of which 1.3 billion have been recognized so far. Benko’s nested real estate and trading group has plunged into crisis after years of expansion amid rising interest rates, construction costs and energy prices.
