The Commercial Court of Vienna has officially transitioned the insolvency proceedings of Signa Holding from a restructuring process to a bankruptcy proceeding this afternoon, as announced by the Credit Protection Association 1870. The change was requested by the holding itself.

Previously, the company owned by former real estate billionaire René Benko withdrew its application for a restructuring plan and sought to shift towards bankruptcy proceedings, according to a statement from insolvency administrator Christof Stapf. Under bankruptcy, there are no minimum quotas for creditor claims, leaving creditors facing significant to total losses, noted credit protector Gerhard Weinhofer.

Signa Holding’s assets primarily comprise stakes in its insolvent subsidiaries Signa Prime and Development, along with shares in „Kurier“ and „Krone“ and U.S. real estate, including the Chrysler Building in New York.

The shift to bankruptcy was justified by Signa Holding with the restructuring concept largely relying on the value-preserving reorganization of its key subsidiary companies, particularly Signa Prime and Signa Development.

As a shareholder, Signa Holding will only participate in the proceeds from the trust-based restructuring plans of the two core Signa companies at a fourth-tier level. Thus, the holding company no longer anticipates „significant participation values“ from its stakes in Signa Prime and Signa Development.

Creditreform’s Weinhofer views the bankruptcy as a „logical consequence“ of the trust-based restructuring plans for Signa Prime and Development. Their plans involve transferring all assets to trustees for liquidation, with proceeds distributed as a „super quota“ to creditors of the two companies.

Creditors of Signa Prime are expected to receive a quota of 23 to 32 percent, while Signa Development’s creditors could see 32 to 40 percent, which offers little benefit to Signa Holding as a subsequent shareholder.

This series of failures marks the largest insolvency in Austrian economic history. Signa Holding declared insolvency on November 29, 2023, followed by Prime and Development. Creditors of Signa Holding have registered claims exceeding 7.8 billion euros, with approximately 80 million euros acknowledged by the insolvency administrator as of early March.

Over 475 creditors have filed claims totaling 12.8 billion euros against the insolvent luxury real estate company Signa Prime, with around 5.9 billion euros recognized by the administrator. Claims against Signa Development amount to 2.3 billion euros, with 1.5 billion euros acknowledged so far.