Restructuring plan on ice

Signa Development: Vienna Higher Regional Court rules in favor of the Republic of Austria

(Bild: APA/Eva Manhart)

On Friday, the Higher Regional Court of Vienna upheld the Republic of Austria's appeal and did not confirm the reorganization plan for Signa Development, which is currently being wound up. 

This means that the creditors of the insolvent sub-complex of René Benko's company structure must continue to wait for their money. "Until the present decision of the Vienna Higher Regional Court becomes legally binding, the proceedings will continue to be conducted as restructuring proceedings with self-administration", the insolvency administrator Andrea Fruhstorfer announced in a press release on Friday.

Two weeks for objection
The continuation of Signa Development as a going concern "remains in place", Fruhstorfer said. However, Signa Development can still appeal the OLG decision before the Supreme Court. The company's management now has two weeks to lodge an appeal.

Republic lodged an appeal against the restructuring plan
The creditors approved the partial restructuring plan in mid-March, but the Republic of Austria lodged an appeal shortly afterwards. The creditors hoped that the trustee and a slower property sale would generate higher proceeds from the liquidation of the real estate company than bankruptcy. In May, the Finanzprokuratur appealed against the confirmation of the Commercial Court. 

The President of the Finanzprokuratur, Wolfgang Peschorn, had already rejected the restructuring plan in March and instead argued in favor of bankruptcy in order to fully clarify the matter.

Central sub-company
Signa Development, which went bankrupt at the end of December 2023, was considered the central sub-company in the Signa conglomerate alongside Signa Prime. Signa Development bundled a number of development projects of the nested Benko group of companies. 

The Vienna Higher Regional Court also overturned the restructuring plan for Signa Prime at the request of the State Financial Procurator's Office, although the company is contesting the decision.