Two more German entities under Austrian investor René Benko's Signa umbrella, Signa Financial Services GmbH based in Frankfurt and Signa REM Germany Rent GmbH in Munich, have today sought insolvency protection. The district court of Berlin-Charlottenburg announced these developments, with lawyer Torsten Martini appointed as provisional insolvency administrator in both cases.
Before Signa Holding's planned restructuring under self-administration, these two newly insolvent German subsidiaries joined the list of potential candidates for similar proceedings. The Signa group, with its intricate network of companies featuring hundreds of individual entities, has been grappling with significant financial challenges.
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Signa Holding's financial woes have led to a surge of subsidiaries seeking insolvency protection. The company continues facing relentless financial struggles following significant debt and liquidity issues. In addition, questionable transfers of value and inadequate planning, specifically transferring €252 million in subordinated, unsecured upstream loans to Signa Prime Holding GmbH amidst its financial struggles, have raised eyebrows.
Public prosecutors in Austria, Germany, and Italy have begun investigating René Benko for alleged fraudulent bankruptcy and money laundering. The company's management board and supervisory board members are personally liable for damages resulting from inadequate planning or delays in insolvency filings.
In the aftermath of filing for bankruptcy, Signa Prime & Signa Development are seeking €350 million to restructure the group. Issuing new profit participation securities will give the group the much-needed financial boost to combat these challenges.
