Municipal association for active role of cities
The Association of German Cities has called for the involvement of cities following the insolvency filing of Austrian real estate investor René Benko's Signa Holding. "Should the insolvency of Signa Holding have an impact on Galeria Karstadt Kaufhof locations, the cities affected must be actively involved in the talks between creditors and owners, shareholders and insolvency administrators," said Helmut Dedy, Chief Executive of the Association of German Cities, to the Funke Group newspapers.
Dedy also called for cities to be given the opportunity to secure affected buildings in the event of insolvency. "In the future, insolvency law should be amended so that cities can potentially gain access to central real estate in the event of insolvency. However, the ownership structures must also be transparent for this," said Dedy.
Signa Holding applied for debtor-in-possession restructuring proceedings on Wednesday. The exact consequences for other subsidiaries, including the department store group Galeria Karstadt Kaufhof, are still open. The Swiss Signa subsidiary Signa Retail Selection AG announced that it would wind up its business in an orderly manner. It is responsible for the Galeria department store division, which is therefore likely to be put up for sale.
Dedy said that it was not yet clear whether the insolvency would have an impact on the Galeria locations: "Nevertheless, the employees and the cities are now beginning to tremble again. The stores in central locations in particular have a key function for our city centers."
Gerrit Heinemann, a retail expert from the Niederrhein University of Applied Sciences, warned of the consequences: With the insolvency of Signa Holding, the Galeria stores are also in acute danger. The subsidies promised by Signa to save the stores may no longer flow in full, Heinemann told the "Rheinische Post" newspaper: "This means that Galeria's last hope is fading. It will become clear after Christmas whether Galeria will survive."
Municipalities should actively participate in negotiations if Signa Holding's insolvency affects Galeria Karstadt Kaufhof locations, as suggested by Helmut Dedy, the Chief Executive of the Association of German Cities. Additionally, associations in the retail trade sector could collaborate with municipalities to advocate for changes in insolvency law, allowing cities to access central real estate during bankruptcy proceedings, provided that ownership structures remain transparent.
Source: www.dpa.com
