Municipal association for active role of cities

After the Austrian real estate investor René Benko’s Signa Holding filed for insolvency, the German Association of Cities has also called for the cities to be involved.

“If the insolvency of Signa Holding has an impact on Galeria Karstadt Kaufhof locations, the cities affected must be actively involved in the discussions between creditors and owners, shareholders and insolvency administrators,” said the general manager of the city association, Helmut Dedy, the Funke Group’s newspapers.

In addition, Dedy called for cities to have options to secure buildings affected in the event of bankruptcies. “In the future, insolvency law should be changed so that cities potentially have access to central properties in the event of insolvencies. “But for this to happen, the ownership structures must also be transparent,” said Dedy.

Signa Holding applied for restructuring proceedings under self-administration on Wednesday. The exact consequences for other subsidiaries, including the Galeria Karstadt Kaufhof department store group, are unclear. The Swiss Signa subsidiary Signa Retail Selection AG announced that it would wind up the business in an orderly manner. She is responsible for the Galeria department store division, which is likely to be up for sale.

Dedy said it was not yet clear whether the bankruptcy would have an impact on the Galeria locations: “Nevertheless, the tremors are now beginning again among the employees and in the cities. The branches in central locations in particular have a key function for our city centers.”

The trade expert from the Niederrhein University, Gerrit Heinemann, 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 houses are no longer likely to flow in full, Heinemann told the “Rheinische Post”: “This means that Galeria’s last hope is disappearing. After the Christmas business it will be seen whether Galeria survives.” (dpa)