Court rejects trustee liquidation of Signa Prime
The Signa Prime, the former flagship of René Benko's insolvent real estate conglomerate, will not be liquidated by a trustee. This was decided by the Oberlandesgericht Wien (OLG) following an appeal by the Republic of Austria, according to the law firm Abel, which is overseeing the trusteeship. This means that the Signa Prime will continue to be administered in-house for the time being. The Signa Prime can appeal the ruling at the Supreme Court (OGH).
The creditors of Signa Prime had expressed a majority vote for the company's liquidation under a trustee in the spring, thereby opting for insolvency. For such a procedure, during which the sale of real estate would take place over several years, creditors were promised a minimum of at least 30% in return - higher than in insolvency.
The President of the Austrian Financial Prosecutor's Office, Wolfgang Peschorn, who acted as counsel for the Republic, however, spoke out in favor of insolvency and filed an appeal against the decision of the Vienna Commercial Court. Peschorn criticized the lack of transparency and doubted the promised quote, as the necessary liquidity would not be available for a slow sale.
The Signa insolvency is the largest bankruptcy in Austrian economic history. The real estate giant was brought down by, among other things, rising interest rates and construction costs, as well as virtually stalled transactions on the real estate market.
- Despite the creditors' majority vote for liquidation, the Oberlandesgericht Wien (OLG) decided that the Signa Prime will not be liquidated by a trustee for now, following an appeal by the Republic of Austria.
- The Trustee settlement for the Signa Prime, as proposed by the Republic of Austria and opposed by some creditors, aims to allow the company to continue self-administration for a period, potentially avoiding the Prime's liquidation.
- The Prime's Trustee settlement is a significant point of contention, with critics, such as President Wolfgang Peschorn, arguing for a full-fledged court-ordered trustee process instead, citing concerns over transparency and liquidity.
