Gallery administrator suggests creditors to approve debt restructuring.

Commercial sales activity. - Gallery administrator suggests creditors to approve debt restructuring.

An insolvency administrator, Stefan Denkhaus, has encouraged the creditors of Galeria Karstadt Kaufhof to approve a restructuring plan for the regional department store chain during a meeting today. He believes that the company has the potential to succeed in the future if the plan is approved, otherwise, it may be dismantled. The gathering will take place at Messe Essen, where creditors with claims totaling 886.1 million euros will discuss the insolvency plan, which was prepared by Denkhaus.

The outcome of the meeting is anticipated in the afternoon, and will not be open to the public. Those creditors include landlords, suppliers, tax offices, and the Federal Employment Agency, who have all registered claims. The insolvency plan requests that these creditors give up a significant portion of their money. Insolvency administrator Denkhaus estimates an insolvency quota of 2.5 to 3 percent but believes that it could potentially be slightly higher.

Any profits coming from claims against the previous owner, Signa Group, founded by entrepreneur René Benko, could contribute to the quota. Experts expect that the plan will be approved because creditors have no other option but to make sacrifices. Rejection of the plan and a general insolvency would mean complete loss for the creditors, and the closure or disassembly of Galeria.

If the insolvency plan gets the green light, it will need to be confirmed by the court before the insolvency proceedings can end. By the end of August, the company is expected to close 16 of its 92 department store locations, resulting in around 1,400 employees losing their jobs. Verdi negotiators like Marcel Schäuble have asked new owners for a viable plan that will secure the retail concept, locations, and jobs in the long term, fearing that store closures and cost-cutting initiatives haven't yielded successful results in the past.

After the creditors' meeting, if all goes well, the company could be transferred to a consortium that includes the US investment firm NRDC and BB Capital SA, led by entrepreneur Bernd Beetz. In the months to come, Galeria has been under financial strain after filing for insolvency in early January, marking the third insolvency in just over three and a half years.

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1. The retail trade sector is closely watching the creditors' meeting concerning Galeria Karstadt Kaufhof's insolvency plan, organized by Stefan Denkhaus.
2. The potential success of GALERIA Kaufhof hinges on the approval of the debt restructuring plan during the meeting, where Stefan Denkhaus will present his vision for the future of the department store company.
3. The insolvency proceedings may come to an end if the court approves the insolvency plan, as recommended by Denkhaus, which includes closure of 16 stores and potential job losses for 1,400 employees.
4. The Federal Employment Agency is among the creditors, having registered claims against Galeria Karstadt Kaufhof, as part of the meeting of creditors to discuss the retail trade company's future.
5. If the insolvency plan is approved, a consortium including the US investment firm NRDC and BB Capital SA, led by entrepreneur Bernd Beetz, could take over GALERIA Kaufhof to secure its future in the German market.
6. The trade of consumer goods revolves around the supervision of Galeria Karstadt Kaufhof's fate, as the future actions of Karstadt and other retailers depend on the outcome of the meeting.
7. The stores that remain open after the insolvency plan implementation would require extensive refurbishment and cost-cutting initiatives, as per the demands of Verdi negotiators like Marcel Schäuble.
8. The meeting's vote on the insolvency plan is expected to have a significant impact not only on Galeria Karstadt Kaufhof but also on the broader retail trade landscape in Germany.

Source: www.stern.de