Bankruptcy proceedings opened over insolvent Benko

The Tyrolean real estate investor had thus admitted his insolvency, it was said. The total amount of liabilities has not yet been clarified, according to the credit protection association KSV1870.

• About the background: Why Rene Benko is filing for bankruptcy now (OÖNplus)

A meeting to consider the claims was scheduled for April 24th. As the Innsbruck regional court emphasized, the meeting was “Like every insolvency meeting, it is not public by law”.

No redevelopment plan application

According to Cornelia Wesenauer from the Alpine Creditors Association (AKV), the opening of bankruptcy proceedings was preceded by an application to open restructuring proceedings without self-administration. But because no restructuring plan application was submitted, the restructuring process was rejected, the creditor protector told the APA. “This is an essential element so that the requirements are formally met. For this reason alone, bankruptcy proceedings were opened.”

Wesenauer therefore assumes that a restructuring plan will be applied for in the course of the bankruptcy proceedings “Recycling stop” to achieve. However, she was unable to explain why the restructuring plan application was missing.

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“The effect of the bankruptcy proceedings relates to the consulting company and all of René Benko’s private assets”said the creditor protection association KSV1870. His assets abroad also include: “In short, it is now about the entire assets” of the Signa founder, said Klaus Schaller, KSV1870 regional manager West.

The creditors’ protection association had previously expressed surprise at Benko’s actions, as the debtor could no longer dispose of his assets. The self-application only makes sense if “if this prevents the bankruptcy proceedings sought by the Finanzprokurator and a restructuring procedure is requested in a self-application”. But no such application was made, which is why Benko is now in custody “in the type of insolvency proceedings that the financial procuratorate sought from the outset”. With her own application, Benko anticipated the insolvency application of the Finanzprokurator as the Republic’s lawyer.

Creditor protection association boss surprised

Gerhard Weinhofer, managing director of the creditor protection association Creditreform Austria, was also surprised by the bankruptcy filing. Because the procedure means that Benko cannot have any influence and he in it “de facto incapacitated” as he stated in an interview with the APA.

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According to Weinhofer, Benko is not without options. He has the opportunity – as Wesenauer already suspected – to apply for a restructuring plan at any time as part of the ongoing bankruptcy proceedings. In this case, however, he would have to offer his creditors a minimum quota of 20 percent and it is questionable whether he can actually service this.

Application for personal bankruptcy is conceivable

In addition, an application for personal bankruptcy is also conceivable for Benko. In the case of personal bankruptcy, there is no specific quota, but rather a payment plan that provides for less rigid deadlines and therefore potentially offers more time to pay off the debts. In such a scenario, all current income that exceeds the subsistence level would be used, explained Weinhofer. In any case, personal bankruptcy would require that Benko relinquish his entrepreneurial status.

From Weinhofer’s point of view, this is bankruptcy “certainly the most exciting procedure” in the Signa Empire, as this would also shed light on his role in the insolvent Signa Holding. If it turns out that Benko received the rumored 26 million euros in annual salary for 2019 as a consultant, then this would be an indication of the fact that he was actually a managing director, says Weinhofer. In this case, questions of liability would arise for the Tyrolean entrepreneur. Benko officially had no operational role at the holding company.

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Andreas Grabenweger from Innsbruck was appointed as insolvency administrator. According to KSV1870, this must clarify whether the consulting company “can be continued without further disadvantages for the creditors”. He also has to get an overview of the debtor’s financial situation. It also remains to be seen which claims will be asserted against Benko and how high the extent of possible claims for damages will be “due to the economic decline of key Signa companies” said Schaller. No quota offer has yet been made to the creditors.

Role of Benko’s private foundation to be clarified

As part of the bankruptcy proceedings, Benko’s role in private foundations should also be clarified. Since foundations are separate legal entities, they are “not assigned to Benko’s assets” and therefore do not fall into the estate, explained regional court spokesman Klaus Jennewein to the APA. However, if he were the beneficiary of the distributions from a foundation, the situation would be different. If Benko has changed his role or that of family members in the past, there is the possibility of challenging this.