What’s next for René Benko after Signa’s bankruptcy disaster

Peschorn took a legal stand and appealed the trust restructuring proceedings at the Vienna Higher Regional Court and the Austrian Supreme Court. And in the case of Signa Prime, the Supreme Court ruled in the final instance. The Signa Prime proceedings were downgraded to bankruptcy proceedings. This means that the management has been replaced by the liquidator and can no longer make its own decisions. The OGH decision is still pending on Signa Development.

• What are the disadvantages of bankruptcy proceedings?

“The change in the type of procedure to bankruptcy proceedings and the associated potential dissolution of the tax group also entails a not insignificant risk of a substantial deterioration in the quotas for Signa Prime’s creditors in the case of Austrian real estate due to the lack of usability of the loss carryforwards,” said the liquidator. For Signa Prime Assets alone, the additional tax expense will be around 100 million euros.

• What happens to luxury real estate now?

The most valuable properties are bundled under the Signa Prime umbrella. A buyer is being sought for the luxury Park Hyatt am Hof ​​hotel in Vienna. “The aim is to exploit the properties as best as possible by mid-2025 as part of a structured bidding process,” says the report by insolvency administrator Norbert Abel. The spacious shopping areas and high-quality offices in Vienna’s Tuchlauben are also looking for a buyer, but marketing is not expected to begin until the next few months. Benko’s master project – the Tyrol department store – is also to be sold. However, the marketing status has been postponed until next year so that the current vacancy can be eliminated and new rentals can be made possible.

• What is the situation with real estate in Germany?

Some properties have already been sold in Germany. In Munich, for example, the property at Rosenstrasse 8 was sold for 85.5 million euros. The KaDeWe on Tauentzienstrasse in Berlin went to the joint venture partner Central Group. The transaction volume was one billion euros. But minus all financial obligations, only 24.4 million euros ultimately went to Signa Prime’s insolvency estate. The Central Group is also the half partner of the Carschhaus in Düsseldorf and has to agree to sell the second half. But this regulation expires at the end of December 2024, after which Central only has a right of first refusal. The sale of the 33-story Upper West high-rise in Berlin is about to be completed. A signing was expected during December.

• Are Signa Development properties also sold?

“Since the bankruptcy was declared, we have managed to complete 8 real estate transactions and bring them to a conclusion at an appropriate sales price due to intensive realization efforts as part of the company’s continuation. The sales proceeds made it possible to adhere to the current liquidity plan,” says administrator Andrea Fruhstorfer. It was possible to achieve a total inflow of around 51 million euros in favor of Signa Development.

• Why are the returns from real estate sales relatively low?

For most projects that are for sale, the proceeds must be used to repay the loans and financing. The social constructions are also often nested, so that there is no return flow to the higher-level societies.

• What other sources of money can the administrators tap?

Payments made up to two years before the declaration of insolvency can be disputed if they disadvantaged other creditors. Signa Prime insolvency administrator Norbert Abel has identified 462 “outgoing payments that are contestable. The total is 478.95 million euros. In October/November 2024, he filed 16 legal challenges with a dispute amounting to 115.86 million euros. The insolvency administrator of Signa Development has identified dispute claims amounting to 157.98 million euros and filed lawsuits.

• Are there also lawsuits against ex-board members?

Yes, the liquidator Abel has sued both the former Signa Prime board member Timo Herzberg and the board member Manuel Pirolt. He wants 6.65 million euros back from the first and 3.94 million euros from the second. But he is also suing shareholders for repayment of dividends. Kühne Immobilien Austria is supposed to repay 16.52 million euros, the RAG Foundation 8.26 million euros.

• Is René Benko personally bankrupt?

No, he went bankrupt as a sole proprietor, but not as a private citizen. So far, its creditors have registered claims worth 2.34 billion euros in this process. There was currently 1.5 million euros in the pot. Benko earns around 3,700 euros net per month and up to around 3,000 euros are seized. He is employed by his family’s real estate company. He can continue to indulge in luxury because his family, especially his mother, supports him massively as the beneficiary of several private foundations.