Next mega-bankruptcy in the Signa empire: 479 million euros in debt

At the end of the year there will be another mega-bankruptcy in the collapsed Signa real estate empire around Rene Benko. So according to Creditreform, they had to SIGNA Prime CM 2017 GmbH File for bankruptcy. Liabilities amount to 478.91 million euros, of which 477.59 million euros relate to bonds issued. This includes a bond with a volume of 355 million euros and a term until 2047. The assets only have a market value of 16.42 million euros.

“The proceeds from these bonds were transferred to the SIGNA Prime Selection AG passed on. The SIGNA Prime Selection AG has also provided unconditional and irrevocable guarantees of the applicant’s principal and interest payment obligations under the bonds. The applicant’s assets are de facto limited to the claims from the onward loans. The liabilities, on the other hand, are essentially limited to the liabilities from the bonds issued,” the bankruptcy filing states.

“The payment profile of the onward loans corresponds to that of the bonds. Based on this, it was also expressly agreed within the terms of the bond that the applicant only has to pay amounts due under the bonds to the bondholders if and to the extent that they have also received the amounts required for this from the SIGNA Prime Selection AG received from the respective forwarding credit.”

Final waiver of claims

And it continues: “As long as and to the extent that the applicant does not receive any or insufficient amounts from the onward loans, the bondholders have irrevocably waived the right to claim the amounts to which they are entitled from the bond (pure deferral). However, it was also expressly agreed that, without any further explanation from the parties involved, the mere deferment will be converted into a final waiver of claims by the bondholders as soon as it is finally certain that neither the issuer under the loan agreement nor the bondholders under the guarantee will receive payments from the guarantor .”

Since bankruptcy proceedings have been opened over the assets of SIGNA Prime Selection AG, it is questionable whether and to what extent quota payments will be made to the applicant, which can then be passed on to the bondholders.

OGH sends Signa Development into bankruptcy

This decision was expected. After Signa Prime Selection AG, Signa Development Selection AG is now also in bankruptcy. The Supreme Court rejected SIGNA Development Selection AG’s appeal and confirmed the decision of the Vienna Higher Regional Court (OLG). Wolfgang Peschorn, the president of the Finanzprokuratur, the law firm of the Republic, also prevailed in this case. In both cases he challenged the restructuring trust decisions of the Vienna Commercial Court.

The restructuring proceedings will now be changed to bankruptcy proceedings and will be conducted as such. Andrea Fruhstorfer was appointed as trustee and Arno Maschke as deputy.

Structured realization of assets

“SIGNA Development Selection AG will continue to operate under the supervision of Andrea Fruhstorfer as insolvency administrator in close coordination with the responsible insolvency bodies until further notice. The aim is to utilize all of the company’s assets in the best possible way in the interests of the creditors,” it said in a press release. “However, due to the loss of trust among stakeholders and the loss of the steering group, the exploitation will be much more difficult and will most likely be less successful than planned.”

“Regardless of the appeal filed, we have consistently continued all stabilization measures up to today’s decision by the Supreme Court and carefully prepared the structured realization of the assets. This is done with the clear aim of ensuring the best possible satisfaction of creditors. Regardless of the Supreme Court’s decision, we will ensure the orderly and efficient realization of the insolvency assets and implement the upcoming tasks with commitment and determination. “, says Andrea Fruhstorfer.