The Swiss Times - Swiss News in English

Expert considers Signa restructuring plan to be the wrong path

The restructuring plan for the insolvent Signa Group of ex-billionaire René Benko is the wrong way to go, according to the Austrian Financial Procurator's Office.

The promised quota of 30 percent for creditors can only be achieved if there is a "striking market recovery" in real estate, said the President of the Financial Procurator's Office, Wolfgang Peschorn, to the Association of Foreign Press in Vienna.

Peschorn said that he still believes that bankruptcy would have been the cleaner solution. Such a break-up under the direction of an insolvency administrator would also have had the goal of the best possible utilization of the existing assets and would also have guaranteed that those previously responsible for the disastrous development at the Signa Group would definitely no longer have a say.

"Not quite as enthusiastic about the refurbishment"

Peschorn, who represents the legal interests of the Republic of Austria as head of the Financial Procurator's Office, lamented a very limited willingness to clarify matters on almost all sides. "There is a lack of enthusiasm when it comes to coming to terms with the circumstances."

Peschorn, who was also Minister of the Interior from 2019 to the beginning of 2020, said that it should be questioned on the basis of which concrete considerations a restructuring plan was approved when there was not even money for the insolvency administrator's salary at the time of the decision. Even the recently promised bankruptcy loan of tens of millions of euros for Signa would not fundamentally change the handling of the largest economic bankruptcy in Austria's history.

"I would sleep very restlessly"

According to Peschorn, Signa founder Benko could find himself in a tight legal situation. "I would sleep very uneasily", said the "Lawyer of the Republic" with regard to the former real estate tycoon. There are currently "numerous indications of criminal offenses" surrounding the spectacular downfall of the Signa Group. Investors had described Benko as the "de facto managing director" and he was therefore presumably the driving force behind the transactions.

A review of the case, including a critical examination of the role of supervisory boards, would be very important for Austria and also for Germany - if only to contribute to hygiene, said Peschorn. "If this is not dealt with, you have to ask yourself what else is going on and why do we have legally regulated responsibilities?"

Over two dozen Signa companies are based in Switzerland. These include Signa Retail Selection AG, which holds half of the Globus department store chain. Some of them are bankrupt, others are being liquidated and some are undergoing a provisional debt restructuring moratorium to examine the possibility of restructuring the companies or continuing their business activities.


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