Cancellation of Peschorn – Republic does not agree to the renovation of Signa

The restructuring plans presented are about achieving higher returns by selling the properties under a trust model than in the event of bankruptcy. The liquidity needed for a slow sale “is not in sight at the moment,” Peschorn said in the Ö1 “Morgenjournal” on Monday. Even if the restructuring plan were accepted, they would have to sell under pressure. “Only through sales can the company keep its head above water in the coming weeks.”

Bankruptcy proceedings are now looming
If the restructuring plans are rejected, bankruptcy proceedings will be planned instead of the self-managed restructuring process. In both scenarios, there will not be much left of the companies in the long term; all properties and projects will be sold.

According to Peschorn, bankruptcy will bring more clarity
Peschorn again criticized the lack of transparency of the Signa group of companies. A bankruptcy would “certainly” bring more clarity. He suspects that money could have been taken out of the companies and then reinvested in new projects. An investor could now appear “who now acts as a creditor with the money that was previously in the company”.

Bankruptcies are also more beneficial to law enforcement agencies
Peschorn believes criminal investigation is possible. ‘And I also hope that the criminal authorities here will start targeted investigations as soon as possible.’ Also in this case, bankruptcy proceedings would “undoubtedly be an advantage for the law enforcement authorities, because a bankruptcy trustee can work very well with them.”

The Signa series of bankruptcies is by far the largest insolvency in Austrian economic history. Creditors have registered record claims of approximately 10.8 billion euros on the bankrupt luxury real estate company Signa Prime, of which only just under 3.1 billion euros have been recognized by the trustee, according to the latest restructuring report. €2.3 billion worth of claims have been registered against Signa Development, of which €1.3 billion has been recognized to date. Signa Prime’s portfolio includes, for example, the Berlin luxury department store KaDeWe, the Selfridges in London and the Elbtower in Hamburg, which currently stands at a building height of 100 or 245 meters, and many other properties such as the Goldenes Quartier and the Hotel Park Hyatt in Vienna and the Tirol department store in Innsbruck. Signa Development develops real estate projects outside the best locations in Austria and Germany, but also in South Tyrol.

Under the proposed restructuring plan of Signa Prime and Signa Development, creditors must receive at least 30 percent of their recognized claims within two years and all usable assets must be transferred to a liquidator for realization or satisfaction of creditors. From the trustees’ perspective, the offered trust restructuring plans lead to a significantly higher quota expectation than in the bankruptcy scenario and they therefore recommend creditors to accept the trust restructuring plans.

The advantage of trust restructuring is that the restructuring administrators would gain time to achieve higher prices when selling the projects and companies, creditor representative Karl-Heinz Götze of the Credit Protection Association of 1870 (KSV1870) explained in the Ö1 “Morgenjournal”. In the event of bankruptcy, they would immediately start selling.

However, according to Peschorn, it is “not at all certain that this 30 percent quota will exist if the restructuring plan is accepted.” The quota is only a promise and could only be achieved under very optimistic assumptions.

The plans require both a majority of creditors and a majority based on the amount of claims. According to Götze, it is impossible to predict how the votes will turn out today.