Former billionaire René Benko crushed by debt burden – Bankruptcy proceedings opened

The economic downfall of the former Austrian billionaire René Benko is taking concrete shape: The Innsbruck Regional Court has decided to open bankruptcy proceedings. René Benko, founder of the real estate and retail group Signa, which has run into financial turmoil, is thus faced with having to draw on his private fortune to fulfill his payment obligations. During the pinnacle of his career, the prestigious business magazine "Forbes" estimated Benko's wealth at 6 billion dollars. Current assessments of his wealth, however, are vague – "Forbes" has since removed him from the list of global billionaires. The exact amount of his remaining fortune is uncertain and is the subject of clarification within the bankruptcy proceedings that aim to shed light on the financial situation of Benko. Insolvency expertise now demands clarification on possible entanglements between the private wealth and Signa companies, as well as any wealth transfers that may have taken place in Benko's private environment. Publicly, the entrepreneur has not yet commented on the Signa crisis. René Benko is known for his opulent lifestyle, represented by a splendid villa, an exquisite chalet, and a private jet – all owned by entities close to Benko's private foundations and Signa companies. Although these assets and the foundations theoretically cannot be used to settle debts, the bankruptcy administrator has the power to reverse past transactions if necessary to protect creditors. Austrian authorities have already claimed tax debts amounting to millions against Benko. Additional financial claims could follow, including notably high demands from the state fund Mubadala from Abu Dhabi. The crisis of Signa, driven by a risky expansion course in times of low interest rates and now burdened by rising interest and construction costs, has far-reaching consequences. Significant assets such as the department store chain Galeria Karstadt Kaufhof and the KaDeWe in Berlin are affected. The sale process of the not yet completed Elbtower in Hamburg is expected to take place soon. Prestigious properties are also for sale in Vienna. Austrian insolvency law allows creditors to realize at least part of their claims through a reorganization process. Whether such an option is available for Benko will become apparent, as the initiation of actual bankruptcy proceedings could indicate that the means necessary for a reorganization process may be lacking.