Gold rush atmosphere – Benkos Signa makes the cash registers ring

At least at the core companies. And this is financially interesting for the respective administrators appointed by the responsible court: according to the insolvency rules, their fee is based on the amount of the quota accepted by the creditors in the restructuring process. And the proceeds from the sale of the assets.

Jackpot restructuring process
Restructuring procedures are particularly lucrative for the directors: as the example of the non-transparent Benko empire shows in detail, the management appointed by the financial juggler remains at the helm. The so-called restructuring manager will only fulfill the role of super commissioner for three months. In contrast to the classic bankruptcy procedure, a quota of 30 percent is provided for in such a restructuring procedure. The process should be completed within a few months.

If, as in the Signa Prime example, an agreement is accepted, the curator receives his fee immediately after approval from the creditors and confirmation by the judge. The money flows immediately. The creditors, on the other hand, must hope that the promised 30 percent will actually become available.

The millions in fees
In the case of Signa Prime Selection AG, the restructuring manager Abel Rechtsanwälte collected a reported 22 million euros for three months of activity, according to information from Krone. In the case of Signa Development Selection AG, which has also been insolvent since the end of December 2023, the company will receive approximately seven million euros from restructuring administrator Fruhstorfer. And this despite the fact that achieving the promised 30 percent quota ultimately depends on the prices at which the Signa properties can be operated in the coming years.

Only for the restructuring manager and the creditor protectors does the money flow safely and quickly; the principle of hope applies to Signa creditors. However, the curator who will carry out the sale will make significant savings on the sale of the properties.

The bet on sales
Signa Prime’s restructuring process is not just a gamble on a hopefully profitable real estate sale in the future; Not even without a certain curiosity. In mid-March, the creditors’ meeting – despite all warnings from the financial public prosecutor’s office – voted by a majority to accept the restructuring plan. There wasn’t even enough money to pay the restructuring manager.

Because the company had no liquidity, the restructuring manager had to set aside his fee claim for the time being. The compensation for the administrator can only be paid once the loan from venture capitalist Attestor, which yields 100 million, becomes available. This means: 22 of the new 100 million, which apparently could only be raised with great difficulty, have already been spent again.

The profit of the creditor protectors
Critics point to another circumstance: if creditors agree to a restructuring process and this does not lead to bankruptcy, as the Republic had insisted, the so-called creditor protectors also benefit. Their fee is linked to the curator’s fee.

Creditor protectors collect significantly more in restructuring proceedings than in traditional bankruptcy proceedings. This could explain why Wolfgang Peschorn, who as representative of the Republic had pushed for bankruptcy and ruthless transparency, was barely heard during the confidential creditors’ meetings. In the interests of the many defrauded creditors, the Republic’s lawyer had called for the breaking up and exploitation of all dubious processes in the Benko conglomerate, including a full investigation.