What: Creditors are seeking approximately 6.3 billion euros from Signa Prime Selection AG, the luxury real estate arm of the troubled Signa Group.

Why it is important: This significant financial demand highlights the depth of the crisis facing Signa Group, a major player in real estate and retail, and underscores the challenges in the luxury real estate sector amid rising interest rates and costs.

The insolvency proceedings of Signa Prime Selection AG, a key entity within the Signa Group, have revealed creditors' demands totaling around 6.3 billion euros. So far, claims amounting to approximately 2.6 billion euros have been recognized. However, this figure is expected to rise substantially as claims from other companies within the Signa Group are yet to be declared. Signa Prime's portfolio includes high-profile assets such as the Elbtower project in Hamburg, the KaDeWe department store in Berlin, and several properties from the Galeria Karstadt Kaufhof chain. In an effort to address the financial shortfall, the insolvency administration has announced plans to sell luxury properties in Austria. A crucial meeting set for March 18 will see creditors vote on a restructuring plan that proposes to return 30 percent of their claims. The Signa Group, established by Austrian entrepreneur René Benko, expanded rapidly during a period of low interest rates but has since encountered severe difficulties due to rising interest rates, construction costs, and energy prices.

6.3 billion euros in claims on insolvent Signa Prime