The President of the Austrian Financial Procuratorate Wolfgang Peschorn does not rule out bankruptcy and thus a break-up of the insolvent Signa Group owned by Tyrolean investor René Benko. “Of course you should be prepared for all developments, you can’t rule anything out at the moment,” Peschorn told ORF Radio on Tuesday.
In order for the creditors, including the Republic of Austria, to agree to the restructuring plan, everything at Signa must now be disclosed, demanded the President of the Austrian tax authorities. “It is now the hour of transparency, everything has to be on the table.” After Signa Holding, the parent company, self-administered restructuring proceedings were recently opened at the Vienna Commercial Court for the group’s operational subsidiaries and flagships, Signa Prime and Signa Development. Signa Prime includes the most important properties, including the KaDeWe in Berlin, the Alsterhaus in Hamburg, the Oberpollinger in Munich as well as the “Elbtower” under construction in Hamburg and the “Lamarr” department store in Vienna. The creditors’ claims should be satisfied to 30 percent.
For the restructuring plan to be accepted, the majority of creditors must agree. “We have to know what kind of claims there are. As creditors, we have to know how the management took place, what responsibilities have to be asserted towards organs, but also towards consultants, supervisory boards and advisory board members,” said Peschorn. Only then can you decide whether you will agree or not. “But there is still a long way to go.” The deadline runs until February 12th, when creditors, including banks, national and international companies, service providers, hotels, lawyers and private individuals, will vote on the holding company’s restructuring plan.
The Signa bankruptcy is the largest bankruptcy in Austrian economic history. The real estate giant is struggling, among other things, with rising interest rates and construction costs as well as transactions on the real estate market that have almost come to a standstill. Overall, the insolvent group’s liabilities currently amount to over eleven billion euros. If the restructuring plan fails, there could be emergency sales of properties in prime locations in Vienna, Berlin, Munich and Hamburg.
It only recently became known that the Republic of Austria had seized a villa near Innsbruck that Benko used privately. The company that owns the property is accused of not paying sales tax for years. According to media reports based on the lien application, more than twelve million euros in sales tax are said to be outstanding. A Signa spokesman rejected this to Reuters: “As part of the tax audit, the tax administration is of the one-sided view that the input taxes that have already been refunded must be repaid – which has no legal basis and is rejected by the property owner,” it said in a written statement. The owner, Schlosshotel Igls GmbH, is an independent real estate entrepreneur and has properly paid VAT on construction costs as part of the construction of the new building and has properly and correctly refunded it as part of the input tax from the tax office.