Insolvency of Viennese Real Estate Developer Lukas Neugebauer and his LNR Group
Another Austrian real estate company has been hit by insolvency. Bankruptcy proceedings have now been opened at the Vienna Commercial Court over the assets of Viennese real estate developer Lukas Neugebauer and his LNR Group. The bankruptcy affects both B&R Generalunternehmer GmbH and LNR Development GmbH, two central companies in Neugebauer's real estate conglomerate. The insolvency affects 32 creditors who have claims totaling 94 million euros. The creditors have until December 30, 2024, to assert their claims.
The LNR Group caused a stir a few years ago with the acquisition of the then Novomatic Forum, formerly known as Österreichisches Verkehrsbüro. / Picture: © Wikimedia Commons / C.Stadler/Bwag / CC BY-SA 4.0 (https://creativecommons.org/licenses/by-sa/4.0)
The LNR Group, which has made a name for itself in recent years with the acquisition of the former Novomatic Forum (now known as the “Kleines Haus der Kunst”) and other prominent real estate projects in Vienna, is now facing major financial difficulties, as reported by ORF. Lukas Neugebauer, Managing Director of the group and one of the most important players in the Viennese real estate market explained in a statement that extensive restructuring measures had already been initiated at the beginning of 2024 to stabilize the company and improve its financial situation. As part of these measures, LNR Development GmbH was spun off from the operating business and other companies such as LNR Asset Management GmbH and LNR Evolution GmbH took over operational tasks.
Insolvency without enforceable claims?
Neugebauer criticized in a statement that the bankruptcy petition had been filed without titled claims, which in his opinion shed a bad light on the market situation and certain players. He emphasized that the LNR Group was continuing to work on ongoing projects and was conducting negotiations with national and international investors to strengthen the Group's capital resources. The negotiations are aimed at securing the company's future growth through strategic partnerships and joint ventures.
A legal dispute over the “Small House of Art”
Another burdening factor for Neugebauer and the LNR Group is the ongoing legal dispute over the “Small House of Art” on Vienna's Naschmarkt, which was formerly known as the Novomatic Forum, as reported by "DerStandard". Neugebauer acquired the listed building in 2021, but quickly came into conflict with the previous tenant, the Dots Group owned by Viennese restaurateur Martin Ho. The Dots Group had rented the building for the restaurant “404 - don't ask why”, but a dispute quickly developed over rent arrears and service charges.
The dispute escalated when Neugebauer tried to block the restaurant with a brick wall to prevent access. This led to an action for disturbance of possession by the Dots Group, which insisted that it was still the rightful tenant. The authorities were also involved, as the building is a listed building and previous disputes had already arisen over structural changes to the façade of the building. The case was taken to the Administrative Court, where a decision will be made on the future of the building.
Challenges in the real estate sector
The insolvency of Neugebauer's LNR Group is symbolic of the difficult situation facing many companies in the real estate sector. Due to rising construction costs, interest rates, and a tense market situation, many developers and builders are facing similar challenges. The LNR Group, which in the past focused on luxury real estate projects, is now struggling with liquidity problems and restructuring, which will be crucial for the company's long-term survival.
Particularly problematic is the general economic uncertainty in the real estate market, which has been exacerbated by interest rate increases and the consequences of inflation. Many construction projects have been postponed or canceled, which places additional burdens on developers such as Neugebauer.
The insolvency of the LNR Group and the associated legal disputes surrounding prominent real estate projects such as the “Small House of Art” shed light on the tense conditions in the Viennese real estate market. While Neugebauer emphasizes that ongoing projects will continue and restructuring measures will be implemented, it remains to be seen how negotiations with new investors will develop and whether the LNR Group can be stabilized in the long term.