The insolvency of the KaDeWe Group has less serious financial consequences than initially feared. According to research by the news portal rbb24, the remaining debts of the luxury department store chain, which filed for bankruptcy in January 2023, amount to around 3.3 million euros to the federal government. The bankruptcy followed a few weeks after the financial difficulties of the Signa network of companies owned by the Austrian investor René Benko, which had previously held a stake in the group.
The debts are the remaining amounts of a loan granted in 2020 amounting to 90 million euros. This loan was granted to protect the KaDeWe Group from bankruptcy during the Corona pandemic. The states of Berlin, Bavaria and Hamburg took over the guarantee because the department stores – KaDeWe, Oberpollinger and Alsterhaus – are located in these federal states.
Originally, concerns were expressed that the bankruptcy could lead to significant burdens on public budgets. In June 2023, the federal and state governments still assumed a remaining debt of 18 million euros. The Federal Ministry of Economics has now announced that the realization of the collateral has almost completely covered the guaranteed loan. Only a loss of a low, single-digit million amount is expected.
The federal government will therefore have to cover around 3.3 million euros, while the state of Berlin will continue to be severely affected with 2.2 million euros. The reason for the high sum for Berlin is the percentage distribution of the loan amount among the guarantors. The federal government covered 50 percent of the sum, while Berlin contributed 32.9 percent due to the large number of employees at KaDeWe based there. The remaining 17.1 percent was shared by Hamburg and Bavaria.
The fact that payments from the federal and state governments are required at all is due to Signa’s insolvency. Although the Central Group, which already held 50.1 percent of the KaDeWe Group before the bankruptcy and has since taken over the entirety of it, has repaid its share of the loan, the proceeds from the Signa insolvency were not sufficient to fully cover the remaining claims .
In addition, the Berlin public prosecutor’s office has been investigating the KaDeWe Group since summer 2023 on suspicion of subsidy fraud. These investigations are related to investigations against the Signa Group. Details of the allegations have not yet been disclosed, as Sebastian Büchner, spokesman for the Berlin public prosecutor’s office, explained.