Reorganization Proceedings of Signa Prime Selection Fail in Court for the Time Being

PeopleOther ♦ Published: July 8, 2024; 21:48 ♦ (Vindobona)

In a significant decision, the Vienna Higher Regional Court (OLG) upheld the appeal of the Finanzprokuratur against the trustee restructuring plan of Signa Prime Selection AG. The reorganization plan previously confirmed by the Commercial Court of Vienna was thus annulled.

The disused construction site of the Elbtower in Hamburg, once the prestige project of Rene Benko and the current Chancellor of Germany and former Mayor of Habmurg, Olaf Scholz. / Picture: © Wikimedia Commons/ Uwe Rohwedder/ CC BY-SA 4.0 (

An ordinary appeal on points of law to the Supreme Court (OGH) was permitted, which means that the proceedings will continue to be conducted as restructuring proceedings with self-administration, and the continuation of Signa Prime Selection AG as a going concern remains secured for now.

The decision of the Vienna Higher Regional Court was based on the assessment that it is currently "obviously not possible" to fulfill the restructuring plan, as reported by the daily newspaper "DerStandard". This was justified, among other things, by the lack of a loan in the three-digit million range and the unrealizable income from property sales. In addition, Signa Prime's funds are insufficient to fulfill the promised 30 percent quota to creditors. The company had stated net assets of around 1.3 billion euros, but never revised this estimate upwards.

Most creditors had agreed to the restructuring plan, including the trustee solution, as reported by ORF, as they expected higher proceeds through a slower sale of real estate than in bankruptcy proceedings. The restructuring administrator Norbert Abel confirmed that the ongoing proceedings will continue in self-administration, while the possibility of an appeal to the Supreme Court remains.

The Finanzprokuratur, the law agency and legal advisor of the Republic of Austria, headed by Wolfgang Peschorn, as reported by "DerStandard", which rejects the trustee proceedings and considers bankruptcy proceedings to be more appropriate, had successfully appealed against the original decision of the Commercial Court of Vienna. According to Peschorn, bankruptcy proceedings could contribute to a better realization of the assets and more transparency in the clarification of the Signa case.

Interestingly, it was established in June that Signa Prime is not a tax debtor but, on the contrary, has a tax credit of around EUR 2.5 million with the tax authorities. However, this development did not affect the Republic's legal position in the proceedings. The State Financial Procurator's Office insisted on its legal remedy despite the new situation.

While Signa Prime is fighting for its financial stability, public interest remains high, especially given the recent developments surrounding René Benko, the founder of the Signa Group. The financial difficulties and related legal disputes have put the company and its business practices at the center of public and legal attention.

Statement by Nathalie Benko

Amid the financial and legal turmoil surrounding the Signa Group, Nathalie Benko, René Benko's wife, has now also spoken out, as reported by Puls24, saying that she has nothing to do with her husband's business dealings. "We live together under one roof," she said, emphasizing that the current situation is very stressful for the family. Nathalie Benko mainly looks after their three children and distances herself from her husband's financial problems.

The Benko family was also recently in the headlines due to a house search. At the end of June, Cobra officers searched the Benkos' villa in Innsbruck as well as other Signa locations. These measures were carried out by the Public Prosecutor's Office for Economic Affairs and Corruption (WKStA) in the course of investigations into suspected embezzlement, fraud, and fraudulent credit. René Benko is accused, among other things, of having seized assets before Signa's insolvency and of having concealed Signa's financial situation when extending bank loans. Benko denies all allegations.

The developments surrounding Signa Prime and René Benko will continue to be followed closely as the legal disputes enter the next round.