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Wooing for Benko seats: The battle for seats in the Signa bankruptcy has begun

Photo: Georges Schneider / photonews.at / IMAGO

Like a house of cards, the billion-dollar empire of Austrian real estate tycoon René Benko (46) is collapsing these days. Initially, the online retail subsidiary Signa Sports United (SSU) and a German subsidiary of Signa Prime Selection had filed for insolvency. Since Wednesday morning, it has been clear that the top society of the multi-interwoven conglomerate will also be affected. Signa Holding files an application for the opening of restructuring proceedings under self-administration at the Commercial Court of Vienna.

For the large law firms that are available as insolvency administrators, this means that the battle for the mandates in the Signa bankruptcy has begun. Many of the renowned insolvency administrators are positioning themselves to get one or, even better, several of the lucrative contracts. After all, it is likely to be the largest insolvency in years, with fees in the high double-digit million range. The properties in the Prime Selection alone are worth around 20 billion euros. Since Benko's empire of real estate and retail business extends across national borders, law firms in three countries are in demand – Austria, Germany and Switzerland.

So who's going to win the race? Which insolvency administrators will be chosen by the competent local courts? manager magazin has distilled the most important law firms in discussions with industry experts.

A favourite: Görg

For the German part of the group, the major law firm Görg, which is active nationwide, is considered one of the favorites. At the beginning of the week, Torsten Martini von Görg had already been appointed insolvency administrator of Signa Real Estate Management Germany. This German subsidiary of Signa Prime Selection carried out management tasks for the real estate division. Even if the insolvent subsidiary is not central to the business, the choice does give a hint: According to insolvency experts, the law firm is likely to be allocated further insolvencies from the Signa Group. "Görg has the enormous capacities that are needed to get this under control technically," says one of Germany's most important restructuring companies.

Currently, for example, the law firm is working on the insolvency of Social Chain AG of TV investors Georg Kofler and Ralf Dümmel, known from the RTL show "Die Höhle der Löwen". As one of Germany's leading insolvency law firms, Görg employs more than 300 lawyers and tax advisors at its five offices in Berlin, Frankfurt am Main, Hamburg, Cologne and Munich. Attorney Martini, who was appointed by the Charlottenburg court, also has several decades of experience. So far, the lawyer has been involved in rather medium-sized insolvency proceedings such as Aktiv Schuh, KTG Energie and the Göttingen Group. He is considered to be technically good and would receive support from other Görg partners if his mandate were to expand.

Gerloff and Pluta in the sports trade

Other candidates include the law firms Gerloff and Pluta, which are handling Benko's insolvent sports business. After Signa Holding cancelled a promised capital injection of 150 million euros for its online retail subsidiary SSU in October, money became so tight for SSU that it filed for insolvency at the beginning of November. However, it is not only the Berlin-based umbrella and service company with 185 employees that is insolvent, but also its subsidiaries Tennis Point and Internetstores GmbH with 32 online shops (including Fahrrad.de, Tennis Point, Wiggle, ChainReaction).

For Tennis Point, Internet stores and the parent company Signa Sports United N.V., which is not active in the market itself, the competent local court of Bielefeld appointed the Munich-based restructuring expert Christian Gerloff as provisional insolvency administrator for all proceedings. For Signa Sports United GmbH, which is responsible for central functions such as IT, Human Resources and Finance, Stefan Meyer von Pluta, a law firm specializing in insolvency, is responsible as provisional administrator. Meyer also manages the SSU subsidiary Publikat, which offers sneakers and outdoor goods. The law firm Pluta, with its 500 employees in Germany, Italy and Spain, recently also took over the insolvencies of the restaurant chain Vapiano and the Munich-based PR and advertising agency Looping Group.

Arndt Geiwitz: the best Signa connoisseur

The Ulm insolvency administrator Arndt Geiwitz (54) is certainly the best connoisseur of the extensive Signa empire. He drew up the restructuring plan for both insolvencies of Benko's department store chain Galeria Karstadt Kaufhof. And most recently, he advised Signa on behalf of the shareholders. Geiwitz did not succeed in saving the construct, but according to information from manager magazin, he claims that he was called too late. In any case, his law firm with around 300 employees could cope with a major insolvency. Most recently, Geiwitz was active for Lufthansa, among others, during its grounding.

Frank Kebekus and Lucas Flöther are also named as favourites. Both now work for different law firms, but more often appear as a team. In the case of the Air Berlin bankruptcy, Flöther acted as trustee and Kebekus as general representative.

Always in the game in the event of major bankruptcies, as in the case of Wirecard, is the Munich insolvency administrator Michael Jaffé (60). He is considered perhaps the toughest debt collector among German insolvency lawyers.

Austria has its say

However, the headquarters of the Signa Group are located in Austria. The Vienna Commercial Court, where Signa Holding filed for insolvency on Wednesday, is therefore likely to assign this mandate to an Austrian insolvency administrator.

In Switzerland, law firms are also likely to take a position if the trading business has to file for insolvency. The Signa Retail Selection, to which Galeria Karstadt Kaufhof also belongs, is domiciled in Switzerland.

It is already clear that the insolvency administrators will have to cooperate across national borders in order to be able to trace the path of money in René Benko's nested empire. And this under different legal regulations depending on the country.

The more than 1000 individual companies and countless internal cash flows will make the work of the restructuring companies tedious. In any case, Arndt Geiwitz failed as a consultant in the task of quickly shedding light on Signa's finances. Now he could get a second chance in bankruptcy.