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Former Austrian billionaire René Benko can no longer meet his current payment obligations. The Innsbruck Regional Court opened corresponding insolvency proceedings on Friday, a court spokesperson announced. This means that the entire private assets of the man who built up the bankruptcy-stricken real estate and trading group Signa can be exploited.

Last year, the American magazine Forbes valued Benko’s ownership at $6 billion (5.2 billion francs). Forbes has since removed him from the global billionaire list. It is currently not possible to estimate how many of the assets are left, insolvency expert Klaus Schaller of the creditors’ association KSV 1870 told the German news agency. This will now be discussed in the Austrian bankruptcy proceedings.

“What will be particularly exciting is whether, and if so, what cross-claims there are for Signa companies,” says Schaller. The question also arises whether assets in Benko’s private environment have been moved. Until now, the entrepreneur has remained silent about the Signa crisis and his role in the demise of the complicated business network.

Benko is known for his glamorous lifestyle with a beautiful villa in Innsbruck, a large chalet in a chic ski resort on the Arlberg and a private jet. However, these luxury goods are not owned by Benko, but by companies located near private foundations of Benko and Signa companies.

Foundation resources are not directly accessible

The foundations’ assets are not immediately accessible to pay off Benko’s debts. However, the trustee could investigate Benko’s transactions in recent years and also reverse them if creditors are disadvantaged by these transactions, Schaller said.

So far, the Austrian tax authorities have charged Benko with tax debts of almost two million euros. as the dpa has learned. However, the demands on the entrepreneur can be considerably higher. For example, the state investment fund Mubadala in Abu Dhabi is trying to raise 713 million euros from Benko and Signa companies.

Although Benko no longer held official management positions at Signa, he did have consultancy contracts with individual sub-companies of the group. After these contracts were terminated in the wake of the group’s crisis, Benko does not have sufficient current income to pay the claims, the dpa has learned.

The assets are distributed among the creditors

In bankruptcy proceedings under Austrian law, the debtor’s assets are distributed among the creditors. However, it is possible to draw up a restructuring plan as part of the process. The creditors would then receive 20 percent of the requested amount. If a debtor does not immediately file for restructuring proceedings, but instead files for bankruptcy as a first step, as Benko did, this may be because the debtor does not have the minimum quota of 20 percent, says Gerhard Weinhofer of the bank’s credit agency Creditreform. dpa.

Signa had grown significantly during the period of low interest rates and entered a crisis due to rising interest rates and construction costs. The nested group of companies’ portfolio includes department store Globus in Zurich, the bankrupt department store chain Galeria Karstadt Kaufhof, the Berlin luxury department store KaDeWe and the Elbtower in Hamburg.

The sales process for the unfinished high-rise is expected to begin in mid-March. as the curator of the Elbtower project company, Torsten Martini, told dpa on Friday. In the wake of the Signa crisis, an upscale business district, a luxury hotel and the building of the Austrian Constitutional Court are up for sale in central Vienna. (saw/awp/sda/dpa)