Signa bankruptcy Court overturns reorganization plan of Signa Development

The Vienna Higher Regional Court (OLG) has upheld the Republic of Austria's appeal against the trustee restructuring of the insolvent Signa Development Selection AG (Signa Development for short). The court has thus refused to confirm the restructuring plan.

"Until this decision by the Vienna Higher Regional Court becomes legally binding, the proceedings will continue to be conducted as restructuring proceedings with self-administration," announced the restructuring administrator Andrea Fruhstorfer on Friday.

The continuation of Signa Development as a going concern "remains in place", Fruhstorfer said. "We remain convinced that the trustee solution is the best for the creditors. The first sales in the Signa Development Selection and the early mass loan would have created a very good starting position for fulfillment," said the restructuring administrator.

However, Signa Development can still challenge the OLG decision before the Supreme Court (OGH). The company's management now has two weeks to lodge an appeal.

Signa Prime's plan previously denied

In March, the creditors of both Signa Development and Signa Prime approved the restructuring plan, including the trustee solution, by a large majority. The creditors hoped that the fiduciary solution and a slower property sale would generate higher proceeds from the liquidation of the real estate company than bankruptcy. The Vienna Higher Regional Court also overturned the restructuring plan for Signa Prime at the request of the Finanzprokuratur, although the company is contesting the decision.

Signa Development, which went bankrupt at the end of December 2023, was considered the central sub-company in the Signa conglomerate alongside Signa Prime. Signa Development bundled a number of development projects of the convoluted group of companies owned by Tyrolean real estate investor René Benko.