The insolvency plan provides for this: Galeria creditors should waive billions

Insolvency plan provides for this
Galeria creditors should waive billions

At the end of October, Galeria Karstadt Kaufhof filed for bankruptcy again. In order to give the company a fresh start, the creditors should now waive their claims. Otherwise, business operations must be stopped immediately.

According to a report, the creditors of the department store group Galeria Karstadt Kaufhof should again waive billions in the ongoing insolvency proceedings. This is what the insolvency plan provides for, which the creditors are to vote on on March 27 in Essen, reports the “Wirtschaftswoche”. If the creditors should reject the concept, “business operations will have to be stopped immediately,” the magazine quoted from a “summary of the essential content of the insolvency plan” that it had. A sale of the company as a whole is also out of the question in this case.

The department store group did not want to comment on the report when asked. According to information from the newspaper, the leadership requires landlords, suppliers and other creditors to waive a large part of the claims in order to enable Galeria to start over. The restructuring consultants therefore expect “insolvency claims entitled to plan payments” totaling 1.41 to 2.36 billion euros. According to “Wirtschaftswoche”, creditors without collateral should only receive 2 to 3.5 percent of the amount owed to them if the insolvency plan is accepted.

In the event of a rejection, there is a risk of greater losses

In the event of a rejection, however, there was a risk of even greater losses. Because then “significantly less will remain” for them, it said in corporate circles. According to the report, creditors who have collateral face fewer losses. This also includes partial amounts from the state economic stabilization fund (WSF), which has supported Galeria with 680 million euros in recent years. According to the insolvency plan, the WSF should get back around 88 million euros from the sale of the inventory. In addition, he should be involved in the sale of Galeria subsidiaries such as the Belgian chain Inno.

At the end of October, Galeria Karstadt Kaufhof had sought rescue using protective shield procedures for the second time in less than three years. In the first trial, creditors had already waived billions in claims so that the department store chain could find a way out of the crisis.

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