“Thank you for nothing!” – Creditors agree to insolvency plan for Galeria

With the acceptance of the restructuring plan, the insolvency proceedings are formally approaching completion. After the objection period has expired, the responsible court in Essen can annul the procedure in June. Then the way is finally clear for the restructuring of the retail giant and the takeover by the new owners: the American investment company NRDC and the investment company of entrepreneur Bernd Beetz, who was CEO of cosmetics group Coty until 2012. Denkhaus would like to transfer them in July.

1,400 employees have to leave
The employees already have a lot of clarity. The tremors following the third bankruptcy in less than four years have come to an end for the time being. Contrary to what some retail experts predicted, business continues for Galeria. Yet companies and employees are once again paying a high price. Branches throughout Germany are closing again and 1,400 people will lose their jobs.

“Benko, thank you for nothing!”
The Verdi trade union placed a symbolic wooden cross in front of the exhibition building for each branch. “Mr. Beetz, invest in the team,” says one of the posters. Another says: “Benko, thanks for nothing!” The cut at Galeria is not nearly as deep as expected. Experts had predicted in January that at most twenty to thirty locations would be retained. Many doubted anyone would even be interested.

About 120 people, representing about 4,600 creditors, took part in the non-public event in Essen on Tuesday. By accepting the bankruptcy plan, you will have to hand over a lot of money again. In recent weeks, landlords, suppliers and other creditors such as the federal government have registered claims for a total amount of 886.1 million euros. It is expected that only a maximum of 22.5 million euros – that is 2.5 to 3 percent – will flow back to them. Payments from the claims against the previous owner, Benkos Signa Group, could increase the quota even further. Because the parent company, which was in financial difficulties, could not provide the promised help, Galeria became insolvent again at the beginning of this year.

German state gets money back
The Economic Stabilization Fund (WSF) will receive more money back. The State Stabilization Fund helped Galeria with 680 million euros in 2021 and 2022. A large portion of the claims were no longer applicable as a result of the bankruptcy proceedings concluded in 2023. A so-called subordinated loan of €88 million was continued. Because new securities have been agreed in the event of default, the WSF has “priority divorce rights” from the insolvent estate. The responsible funding agency expects that the claims will now be paid in full. No further defaults are expected as a result of the new bankruptcy.

The curator laid the foundation for the new beginning. Denkhaus’s main goal was to make the group medium-sized. The company’s headquarters in Essen is specified. The administration is expected to move to a branch in Düsseldorf in 2025 – significantly downsized. Of the 92 branches, 76 remain. According to reports, this will reduce the rental burden by approximately 80 million euros per year. The name also changes. The department store chain will now only be called Galeria and the large, traditional brands Karstadt and Kaufhof will disappear. These are said to be too closely linked to the recent bankruptcies.

Further restructuring proceedings against SIGNA’s division
Speaking of bankruptcy, restructuring proceedings were imposed on another part of René Benko’s corporate structure on Tuesday. The Vienna Commercial Court has now opened non-self-management restructuring proceedings for SIGNA Prime Holding GmbH. About 15 creditors are affected – a mini puzzle piece in Benko’s opaque business network. But the downward spiral continues.