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Tuesday, September 01, 2020
The department store chain Galeria Karstadt Kaufhof can look forward to a future: the creditors’ meeting approved an insolvency plan, tens of thousands of creditors give up several billions of euros for a possible rescue.
The creditors of Galeria Karstadt Kaufhof want to save the insolvent department store chain: at the creditors’ meeting in Essen they approved the insolvency plan, as the company boss Miguel Müllenbach informed the employees in a letter. Müllenbach was confident that the protective shield process could be completed as planned in September and that the group would be debt free.
At Messe Essen, creditors had spent around six hours discussing the future of the struggling department store group with management, as well as CEO Arndt Geiwitz and court-appointed trustee Frank Kebekus behind closed doors. According to the Essen District Court responsible for the insolvency proceedings, they confirmed Kebekus in his office and voted in favor of keeping the creditors’ committee.
Approximately 100 creditors and creditor representatives sat in front of the podium in the showroom with seats that comply with Corona regulations; According to Kebekus, they represented 1.7 billion euros of the total amount of reported claims of around 3 billion euros. Geiwitz emphasized that this sum will certainly not last in the end. According to the information, creditors so far can only expect a payment of 500 million euros. Only an exact amount can be forecast in several months. More creditor meetings will be held for subsidiaries in Essen on Friday.
The meeting of creditors is an “intermediate step”
Before the start of the private meeting, individual works councils and members of the Verdi services union’s collective bargaining committee spoke out against the planned branch and job cuts in the course of the remodel. “That’s a plan, and plans can be adapted and changed,” said Stefanie Benefitberger, a member of the Verdi Federal Board. The creditors’ meeting is an “intermediate step.” It is important to “keep going” and keep fighting for the branches threatened by cuts and affected jobs, Benefitberger said.
The insolvency administrator, management and owner Signa would have to be held liable; At the same time, the future of the branches should continue to be discussed with the municipalities, he claimed. According to Silke Zimmer, Verdi’s regional division manager for retail, 47 department stores are still threatened with closure, and with them thousands of Galeria’s 28,000 employees.
The department store group, since last year wholly owned by the Austrian René Benko’s Signa group, was in a state of hesitation in the Corona crisis. Efforts to obtain a relief loan and cancellation of rents could not prevent bankruptcy. After Karstadt’s first bankruptcy in 2009, Benko bought the majority in 2013 and took over the entire department store chain in 2015. In 2018, Karstadt and Galeria Kaufhof merged, with Signa taking over all the shares. in the summer of 2019.
SPD Parliamentary Group Vice Chair Katja Mast said Galeria Karstadt Kaufhof deals with a part of German retail history and employment. “Let’s work on creating something new.” In terms of trade policy and politics, it will have to be about “how can we maintain attractive urban centers and therefore also department stores and shops versus pure online commerce”. This also requires new concepts for the remaining Kaufhof locations. “A simple ‘business as usual’ does not lead to the future.”
