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Real estate: Signa founder in insolvency proceedings: Benko assets in focus

Real estate: Signa founder in insolvency proceedings: Benko assets in focus

So far, the investor has remained silent about the crisis in his real estate and trading group. Now he has to disclose his assets. His businesses are also under scrutiny.

The former Austrian billionaire René Benko can no longer meet his current payment obligations. The Innsbruck regional court opened corresponding insolvency proceedings, as a court spokesman announced. This means that the entire private assets of the man who built up the real estate and trading group Signa, which was affected by bankruptcies, can be exploited.

Last year, the US magazine Forbes valued Benko’s wealth at $6 billion (5.5 billion euros). Forbes has now removed him from the global billionaire list. It is currently not possible to estimate how much of the assets are left, said insolvency expert Klaus Schaller from the creditors’ association KSV 1870 to the German Press Agency. This will now be put on the table in the bankruptcy proceedings.

“What will be particularly exciting is the question of whether and, if so, what mutual claims there are to Signa companies,” says Schaller. The question also arises as to whether assets in Benko’s private environment had been moved. So far, the entrepreneur has remained silent about the Signa crisis and his role in the decline of the intricate company network.

Luxury goods not privately owned by Benko

Benko is known for his glamorous lifestyle with a magnificent villa in Innsbruck, a large chalet in a posh ski resort on the Arlberg and a private jet. However, these luxury goods are not owned by Benko, but by companies located in the vicinity of Benko private foundations and Signa companies. The assets of the foundations cannot be accessed directly to pay off Benko’s debts. However, the bankruptcy administrator could examine Benko’s transactions from recent years and also reverse them if creditors were disadvantaged by these transactions, said Schaller.

So far, Austrian tax authorities have made Benko owe tax debts of almost two million euros, as the dpa learned. However, the demands on the entrepreneur could be significantly higher. For example, the sovereign wealth fund Mubadala in Abu Dhabi is trying to collect 713 million euros from Benko and Signa companies.

No sufficient ongoing income

Although Benko no longer had any official management positions at Signa, he did have consulting contracts with individual sub-companies of the group. After these contracts were terminated in the wake of the group’s crisis, Benko currently does not have sufficient current income to settle the claims, as the dpa learned.

In bankruptcy proceedings under Austrian law, the debtor’s assets are divided among the creditors. However, it is possible to create a restructuring plan as part of the process. The creditors would then receive 20 percent of the requested amount. If a debtor does not directly seek restructuring proceedings, but instead files for bankruptcy as a first step, as Benko did, this could be because the debtor does not have the minimum quota of 20 percent, said Gerhard Weinhofer from the credit agency Creditreform of the dpa.

Signa had expanded significantly during the low interest rate phase and plunged into crisis due to rising interest rates and construction costs. The portfolio of the nested group of companies includes, among others, the insolvent department store chain Galeria Karstadt Kaufhof, the Berlin luxury department store KaDeWe and the Elbtower in Hamburg. The sales process for the unfinished high-rise is scheduled to begin in mid-March, as the insolvency administrator of the Elbtower project company, Torsten Martini, told dpa. In the wake of the Signa crisis, a luxury business district, a luxury hotel and the building of the Austrian Constitutional Court are up for sale in Vienna’s city center.

Source: Stern

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