At the meeting of the creditors of the insolvent Signa companies, it will be decided what will happen to René Benko’s real estate. The Republic of Austria does not want to agree to the restructuring plans.
The creditors of the two most important real estate companies, Signa Prime and Development, will vote on the restructuring plans presented at the Vienna Commercial Court this afternoon. If there is no majority for the proposed trust solution and a sale of the luxury real estate over several years, bankruptcy will result and thus a break-up.
This is a very realistic option: the Republic of Austria, as one of the creditors of the insolvent Signa companies of the Tyrolean investor Rene Benko, will not agree to the proposed restructuring plans. This is what Wolfgang Peschorn, President of the Austrian Financial Procuratorate and thus the Republic’s lawyer, said today ORF Radio.
Lack of liquidity
The head of the financial administration justified his rejection by saying that the liquidity necessary for a slow sale was not available. This is needed in order to be able to wait for a market recovery and to take time to sell. “The company can only stay afloat in the next few weeks by selling real estate,” said Peschorn.
In addition, it is not certain that the promised quota of 30 percent can be met if the restructuring plan is accepted. “There is no guarantee,” said Peschorn. The lawyer also once again criticized the lack of transparency. In his opinion, bankruptcy would “definitely” bring more clarity. Money could have been taken out of the companies and then reinvested in new projects, said Peschorn.
More than ten billion euros in claims
The Signa bankruptcy is the largest bankruptcy in Austrian economic history. Creditors have registered claims of around 10.8 billion euros against Signa Prime, although according to the restructuring report, only just under 3.1 billion euros have been recognized so far.
Signa Prime includes the most important properties, including the luxury hotel Park Hyatt in Vienna, the Selfridges in London, the KaDeWe in Berlin, the Alsterhaus in Hamburg, the Oberpollinger in Munich and the stopped Elbtower in Hamburg. Around 2.3 billion euros in claims have been registered with Signa Development, of which 1.3 billion euros have been recognized so far.
When the creditors vote at the Vienna Commercial Court, there must be a majority in terms of heads and the amount of the claim. Peschorn did not want to speculate on how other creditors would vote. “We are not guided by the majority, but rather by what is in the interests of the Republic and the taxpayers.”