Austria

The administrator of Rene Benko’s bankrupt luxury property unit is asking former supervisory board members to acknowledge their role in causing at least €1 billion ($1.03 billion) of alleged damages by failing to practice proper oversight, Bloomberg News reported. Law firm Abel Rechtsanwälte GmbH claims board members of Signa Prime Selection AG, including former Austrian Chancellor Alfred Gusenbauer, had ignored that the group was materially insolvent by March 2022 — if not earlier, according to a letter seen by Bloomberg.

Austria's Supreme Court of Justice has rejected a restructuring plan for Signa Development, a unit of property tycoon Rene Benko's firm Signa, meaning it must undergo bankruptcy proceedings, the insolvency administrator said on Monday, Reuters reported. The aim is now to utilize the assets of the business as well as possible in the interests of the creditors, insolvency administrator Andrea Fruhstorfer said in a statement. The Supreme Court's decision dismissed an appeal by Signa Development and upheld an earlier ruling by a top appeal court in Vienna, the statement said.

Insolvent tycoon Rene Benko remains free to defend himself against multiple international criminal investigations after Austrian authorities said they couldn’t comply with an Italian arrest warrant, Bloomberg News reported. Austrian officials had questioned the founder of the Signa retail and property conglomerate, and released him under investigation, a spokesman for the Innsbruck prosecutors said by email. With several parallel investigations, Austrian authorities cannot comply with a European arrest warrant, he said, adding that Benko wasn’t required to post bail.

Shares of Pierer Mobility AG tumbled after the company said its KTM AG motorbike unit was filing for a self-administered insolvency in Austria, Bloomberg News reported. KTM will be unable to cover a “very high three-digit million euro” financing requirement, according to a statement. The company will seek to agree with creditors on a reorganization in the next 90 days. Shares slumped 45% to 6.9 Swiss francs ($7.8), heading for their biggest daily decline on record and extending a loss this year to 84%. The company owned by entrepreneur Stefan Pierer and India’s Bajaj Auto Ltd.

Austria’s top court ruled that a restructuring plan put forward by Signa Prime Selection AG and its creditors was unlawful, pushing the luxury landlord into bankruptcy, Bloomberg News reported. The Supreme Court verdict follows a months-long court battle over the restructuring agreement adopted in March by creditors of the flagship unit in tycoon Rene Benko’s erstwhile conglomerate. The plan aimed to pay creditors 30% of their claims by appointing a trustee to manage a protracted sale of assets, benefiting from an anticipated recovery in market valuations.

The Schoeller Group is in exclusive talks to buy Signa’s Upper West tower in Berlin, according to people familiar with the matter, in one of the most closely watched property transactions in Germany, Bloomberg News reported. The industrialist family’s investment office has been picked for exclusive negotiations after several rounds of bids for the building that is part of Austrian tycoon Rene Benko’s defunct empire. The insolvency administrator of Signa Prime Selection AG had been nearing a deal to sell the property for more than €400 million ($432 million), Bloomberg previously reported.