A store that sells a variety of items, including clothing, home decor, and electronics. - Creditors of Galeria determine the fate of the retail empire.
Creditors of Galeria Karstadt Kaufhof are set to decide on the chain's restructuring plan on Tuesday in Essen. Created by insolvency administrator Stefan Denkhaus, the plan aims to help the struggling department store get back on its feet. The results will be revealed in the afternoon and the event is not open to the public.
To reach this goal, landlords, suppliers, and other creditors, including the government, need to waive a significant portion of their unpaid claims. The insolvency administrator anticipates an insolvency quota of 2.5 to 3 percent. This percentage determines how much of the owed money creditors will receive if they accept the plan. In recent weeks, total claims amounting to 886.1 million euros have been recorded. The acceptance of the insolvency plan is expected to happen, as creditors may hope for the return of at least a small portion of their funds. If the plan is declined, they risk a complete loss and Galeria might face dismantling.
According to the plan, a consortium consisting of the US investment firm NRDC and the investment company BB Capital SA of entrepreneur Bernd Beetz will take over Galeria. As part of the insolvency process, the company will downsize. By August, 16 of the 92 department store branches are scheduled to shut down, causing the loss of 1,400 jobs out of the current workforce of approximately 12,800.
In order for the insolvency plan to become a reality, it must first be confirmed by the court. If this happens, the insolvency proceedings can conclude. Denkhaus aims to transfer the company to the new owners by the end of July. Galeria initially filed for insolvency in early January, marking its third bankruptcy within three and a half years.
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Source: www.stern.de
