Bang in the vote

Signa Prime: Creditors’ votes are counted

Over 400 creditors of the luxury real estate company Signa Prime came to the Commercial Court in Vienna on Monday.

(Bild: APA/EVA MANHART)

Today is a decisive day for the future of the Signa Group founded by René Benko. The more than 400 creditors of the luxury real estate company Signa Prime voted on the restructuring plan at the creditors' meeting at the Commercial Court of Vienna - the majority voted for a trustee solution. Wolfgang Peschorn, representative of the Republic of Austria in this matter, had sharply criticized this plan in advance and announced that he would vote against it. Late in the afternoon, the trustee solution was also accepted for Signa Development, which is also ailing.

In the restructuring proceedings of Signa Prime Selection AG, a total of 475 creditors have registered around EUR 12.8 billion for the restructuring plan meeting to date, EUR 6.2 billion of which is conditional. Around EUR 5.9 billion is currently recognized.

Creditors want trustee restructuring
As the "Krone" learned on Monday, the trustee restructuring plans for both Signa Prime and Signal Development were accepted by a majority. According to the restructuring plan proposals, creditors are to receive at least 30 percent of their recognized claims within two years and all realizable assets are to be transferred to a trustee, in this case lawyer Norbert Abel, for liquidation or satisfaction of creditors.

Signa Prime insolvency administrator Norbert Abel at the Commercial Court of Vienna

(Bild: APA/EVA MANHART)

In the view of the insolvency administrators, the trustee restructuring plans offered lead to a significantly higher quota expectation than in the break-up scenario and they therefore recommended in advance that the creditors accept the trustee restructuring plans.

Sharp criticism from Peschorn
Wolfgang Peschorn, who as President of the State Financial Procurator's Office represents the interests of the Republic of Austria at the creditors' meeting, made it clear before the vote: He would not agree to the restructuring plans. The restructuring plans presented are aimed at achieving higher proceeds by selling the properties under a trustee model than in the event of bankruptcy. The liquidity required for a slow sale "is currently not in sight", Peschorn told the "Krone" newspaper. Even if the restructuring plan is accepted, the company would have to be sold under pressure. "Only by selling can the company keep its head above water in the coming weeks."

Wolfgang Peschorn, head of the Finanzprokuratur

(Bild: Fuchs)

In Peschorn's opinion, however, it is "not at all certain that this 30 percent quota will be available if the restructuring plan is accepted". The quota is merely held out as a prospect and could perhaps only be achieved under very optimistic assumptions.

"Bankruptcy would bring clarity"
Peschorn once again criticized the lack of transparency of the Signa Group to the Ö1 "Morgenjournal". Bankruptcy would "definitely" bring more clarity. He suspects that money could have been taken out of the companies and then reinvested in new projects. An investor could now appear, "who is now acting as a creditor with the money that was once in the companies".

Peschorn believes that criminal investigations are possible. "And I also hope that the criminal authorities will start targeted investigations here as soon as possible." In this case too, bankruptcy proceedings "would undoubtedly be an advantage for the criminal prosecution authorities, because a trustee in bankruptcy can work very well with them".

Benko's Signa construct is crumbling more and more.

(Bild: APA/Roland Schlager)

100 million loan from Kühne?
Before the start of the hearing, reports in several German media had caused a stir, according to which Hamburg billionaire Klaus-Michael Kühne could help the insolvent Signa Prime with an emergency loan, according to an insider. A person familiar with the situation told the news agency Reuters on Monday that there were talks about a loan of more than 100 million euros. The Bloomberg agency had previously reported on such an emergency loan.

Kühne and several banks could provide a total loan of more than 100 million euros, the Bloomberg report said, citing several people familiar with the matter. The money would provide liquidity to cover bills and continue construction work, the insiders said.

Largest insolvency in Austrian economic history
The Signa bankruptcy series is by far the largest insolvency in Austrian economic history. Signa Prime's portfolio includes, for example, the luxury department store KaDeWe in Berlin, Selfridges in London and the Elbtower in Hamburg, which has been stopped at 100 of 245 meters of construction height, as well as many other properties, such as the Goldenes Quartier and the Park Hyatt Hotel in Vienna and the Tyrol department store in Innsbruck. Signa Development develops real estate projects outside the prime locations in Austria and Germany as well as in South Tyrol.