Retail: Galeria insolvency administrator submits restructuring plan

Retail: Galeria insolvency administrator submits restructuring plan

The insolvency plan must, among other things, show how the department store company can get back into the black. The creditors will vote on it at the end of May.

The financially troubled department store company Galeria Karstadt Kaufhof has submitted an insolvency plan to the responsible district court in Essen. “Galeria’s economic prospects are good. I have no doubts about that,” said insolvency administrator Stefan Denkhaus to the German Press Agency (dpa). He estimates the risk of the group becoming insolvent again in the near future to be low, “within the framework of the general economic risk.”

The district court will now check whether the insolvency plan drawn up by Denkhaus meets the legal requirements. The lawyer must show how the department store chain can be restructured and operated profitably again in the future. It was recently announced that 16 of the 92 branches would have to close at the end of August.

The insolvency plan is a contract between the company and creditors – i.e. all those to whom Galeria owes money. These include, among others, suppliers, landlords and the Federal Employment Agency, which paid insolvency money to the employees. Creditors must register their claims by May 14th. The plan regulates what percentage of this you will receive back after the procedure is completed. Denkhaus had recently spoken of a single-digit rate. That would mean: Less than ten percent of the money owed would go back to the creditors.

The insolvency plan also stipulates that a consortium made up of the US investment company NRDC and the entrepreneur Bernd Beetz’s investment company BB Kapital SA should take over Galeria. However, the agreement concluded between them and the trading group will only come into effect if the creditors accept the insolvency plan on May 28th and it is then reconfirmed by the court. Denkhaus wants to hand over the company to the new owners by the end of July.

Galeria headquarters is to move to Düsseldorf

The department store chain’s headquarters are scheduled to move from Essen to Düsseldorf from the beginning of 2025. “The move will not happen in one go, but gradually over the course of the first half of the year,” Denkhaus told dpa. As part of the renovation, the administration is to be relocated to the Düsseldorf Schadowstrasse branch. Galeria has rented several floors there, one of which, according to Denkhaus, is to be converted.

The planned move out of the headquarters in Essen had already been announced recently. The property belongs to a subsidiary of the also insolvent Signa Group of the previous owner René Benko. Insolvency administrator Denkhaus wants to make Galeria more medium-sized. In some cases, however, there are still corporate structures in the administration, he recently explained. Around half of the 900 jobs there to date will therefore be eliminated.

Source: Stern

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