Proceedings now open

Bankruptcy proceedings officially opened against Benko

Has the luxury life of the real estate juggler now come to an end? The proceedings relate to his consultancy firm and his entire private assets.(Bild: Zwefo, Alexander Tuma, Krone KREATIV)

It is now official: on Friday, the Innsbruck regional court opened bankruptcy proceedings against the assets of Signa founder René Benko. The real estate investor himself had previously filed for insolvency as an entrepreneur.

The Tyrolean real estate investor had thus admitted his inability to pay, it was reported. The total amount of the liabilities has not yet been clarified.

Money abroad also in the sights
"The effect of the bankruptcy proceedings relates to René Benko's consulting firm and all of his private assets," the creditor protectors announced. This also includes his assets abroad: "In short, it is now about the entire assets" of the Signa founder, said Klaus Schaller, KSV1870 Regional Manager West.

Benko beats the Republic's lawyer to the punch
The creditor protection association was surprised by Benko's actions, however, as the debtor would no longer be able to dispose of his assets. The self-petition only makes sense "if it prevents the bankruptcy proceedings sought by the Finanzprokuratur and a reorganization procedure is applied for in the self-petition".

Benko's Signa Group has slipped into a fatal bankruptcy - now it is a matter of liquidation.(Bild: APA/AFP/Joe Klamar)

However, such proceedings have not been applied for, which is why Benko is now "in the type of insolvency proceedings that the State Financial Procurator's Office has been seeking from the outset". With his own application, Benko had pre-empted the insolvency application of the Finanzprokuratur as the attorney for the Republic.

An overview is needed first
Andreas Grabenweger from Innsbruck was appointed insolvency administrator. He must now clarify whether the consulting firm "can be continued without further disadvantages for the creditors". He must also obtain an overview of the debtor's financial situation.

It also remains to be seen which claims will be asserted against Benko and the extent of possible claims for damages "due to the economic decline of significant Signa companies", said Schaller. A hearing to examine the claims has been scheduled for April 24. No quota offer has yet been made to the creditors. 

"With the insolvency as a sole proprietor, he can - depending on the proceedings - agree on a quota of 20 or 30 percent with the creditors," noted Creditreform managing director Gerhard Weinhofer. For the time being, it remains to be seen which of the aforementioned types of proceedings Benko has chosen.

Insolvency could still be exciting
The insolvency of the sole proprietor Benko could still be exciting: Prior to the insolvency of Signa Holding, there were changes to the beneficiaries of the foundations. In extreme cases - such as changes in beneficiaries with close relatives - transactions can be reversed for up to ten years, confirmed Cornelia Wesenauer, Head of the Insolvency Department for Vienna, Lower Austria and Burgenland at AKV Europa.