Signa managers should be liable for at least 1 billion euros

The insolvency administrator of Signa Prime Selection AG, in which company founder René Benko Luxury real estate has parked, is stepping up its pace to raise money for the creditors. 13 months after the bankruptcy filing at the end of November 2023, letters of liability from the lawyer Norbert Abel were sent to four former board members and twelve ex-supervisory board members shortly before the turn of the year. Abel blames them for at least 1 billion euros in damage.

Specifically, the insolvency administrator is throwing the former executives Manuel Pirolt, Timo Herzberg, Tobias Sauerbier and Claus Stadler as well as the ex-supervisory board members, including ex-SPÖ Chancellor Alfred Gusenbauer, grosso modo serious misconduct breaches of duty and delay in insolvency.

It is assumed that Signa Prime was materially insolvent “since March 31, 2022 at the latest”, which should have been known to both the supervisory board and the members of the management board and to the corresponding steps – position of one bankruptcy filing – should have led, according to a lawyer’s letter. This addresses managers who held their position between January 1, 2022 and the opening of insolvency on December 29, 2023.

Acting in breach of care and duty

The authoritative one Damage From today’s perspective, the cost of acting carelessly and in breach of duty amounts to around 1 billion euros. The board thereby ensured that Signa Prime’s operating loss was borne by the company creditor increased and that the bankruptcy estate was diminished. As a result, the insolvency rate was reduced accordingly and there was damage to the rate.

At first it was evident that it was not suitable Controlling and not a suitable one Financial planning Abel also states this in a letter to Pirolt’s lawyer Michael Rohregger. His client was also a member of the debtor’s board of directors in the years before the bankruptcy was declared and had “culpably violated his duties in this regard during the appointment period.”

The insolvency administrator called on the former executive bodies of Signa Prime to “acknowledge the substance of their liability”. According to the information, this sum was raised through “illegal payments, intercompany loans and unclaimed repayments”. As Deadline January 20, 2025 is set for receipt of the acknowledgment of liability.

“Beer mat” calculations in the three-digit million range

The debtor’s liquidity planning is “only cursory, not audit-proof and in no way meets the requirements of a large company “Beer mat” calculations on file ( ́in the rudimentary Excel format)”. The “beer mats” were characterized by the fact that they contained “arbitrary, illegal ‘transfers’ from non-group companies (in particular Signa Development Selection AG) in the three-digit million range and in general any – only supposedly free ones – Treat liquidity in subsidiaries as that of the SPS”.

And further: “From this, every careful board member should have recognized that the debtor is engaging in ‘de facto cash pooling’ gross injury which operates capital preservation regulations.”

Despite knowledge of the Liquidity problems In 2023 alone, Signa Prime Selection AG made payments to Signa Prime Holding GmbH, which was also in economic difficulties and was materially insolvent, amounting to a good 252 million euros in the form of “largely subordinated (!) upstream loans” accomplished.

The granting of these payments to the majority shareholder – who is not affiliated with the group – ceases altogether Unique in Austrian economic history,” said Abel. The board has a lasting impact Due diligence obligations violated according to the Companies Act.

Insolvency will already be apparent in the course of 2022

The insolvency administrator also sends clear words to the former supervisory board members: “In fact, the entire supervisory board failed to properly appoint the board of SPS (Signa Prime Selection AG, note). monitor.” In addition to a whole series of activities and omissions, the members of the supervisory board have it missedto work towards the filing of an insolvency application by the board of directors, “although careful supervisory board members would have already seen in the course of 2022 that the SPS has long been materially insolvent.” They had “culpably breached their duties”.

For a member of the board of directors as an “insider” it was “noticeable by March 2022 at the latest” that the economic situation of the entire Signa Group was changing massively deteriorated. This applies particularly to the lack of liquidity. As early as 2019 at the latest, members of the Board of Management were “personally aware of emerging financing difficulties”. The massively negative development would have required the board of directors to file for insolvency “in October 2022 at the latest,” Abel specified.

Due to the Complexity of structure the insolvent Signa Prime cannot be ruled out that further liability claims will be asserted following additional findings – “the investigation is still ongoing”. In the absence of action by the individual board members or the entire board, they are jointly and severally liable for all damages caused to the company as a result of the delay in insolvency.

Each of the twelve supervisory board members is also jointly and severally liable for the damage caused to Signa Prime’s assets. In addition to the liability claims that have now been raised, Abel has already Fee payments requested back to the former managers and some have already been received.