Galeria creditors threaten to lose billions more

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Creditors of Galeria Karstadt Kaufhof are again threatened with high losses. As Düsseldorf “Wirtschaftswoche” reported on Thursday, billions of dollars in losses are foreseen in the bankruptcy plan for the German department store chain. Creditors must therefore vote in Essen on 27 March. If they reject the plan, “business operations will have to be stopped immediately,” the newspaper said, quoting a summary of the plan. There is a phantom branch threat in the inner city.

Therefore, the bankruptcy administrator requires landlords, suppliers, and other creditors to waive most of their claims. This should provide a fresh start for the chain of stores. Unsecured creditors could then only get back some of their money.

The newspaper also reported that creditors with collateral would suffer less. This includes the Federal Economic Stabilization Fund (WSF), which supports Galeria with around 700 million euros. According to previous media reports, DSF will also share the proceeds from the sale of Belgian Galeria subsidiary Inno.

Only the solid store core remains

Galeria filed for self-directed bankruptcy at the end of October. The bankruptcy executive announced that only one solid core of department stores would remain. So far there is no clarity on this. Some branches may also be taken over by investors and continue to be operated.

According to the “Wirtschaftswoche” the bankruptcy plan also provides for a reorganization of operational business. Therefore, the company should focus more on selling fashion products and less on toys or stationery in the future. A modernization plan for branches includes, among other things, a “comprehensive range of restaurants”. (AFP)

Source :Blick