What: Creditors of Signa Group's key subsidiaries are seeking to replace the management due to concerns over the handling of asset sales.

Why it is important: The move underscores the tension between the creditors and the current management over the transparency and strategy of liquidating assets worth hundreds of millions. This situation highlights the challenges in managing insolvency processes and protecting creditor interests, especially in complex international business structures.

Creditors of Signa Group, a major property conglomerate known for owning prestigious assets like Selfridges in London and the Chrysler Building in New York, are pushing for a significant change in management. The group's financial turmoil has led to a call from international lenders, representing claims of over €3 billion, for more transparency and fairness in the asset liquidation process. They argue that properties are being sold or transferred under questionable conditions, potentially favoring a close circle of Austrian investors.

Despite Signa Holding being under independent administration, the subsidiaries that hold most of the group's valuable assets are still controlled by appointees of René Benko, Signa's founder. This arrangement, allowed by Austrian insolvency law, has led to a "self-administration" phase, which critics say lacks visibility and could harm creditor interests.

The situation escalated with creditors, including major German insurance companies, formally requesting the end of this self-administration phase for Signa Prime, one of the subsidiaries. They suggest that the management's decisions could significantly harm creditors and have proposed appointing an independent real estate expert to oversee a more transparent liquidation process.

The controversy also extends to Signa Development, with creditors demanding an independent administrator take over. The lack of communication and clarity on financial transactions has been a major concern, highlighting the broader challenges and implications of managing insolvency within large, international groups.

Signa creditors push to oust management over property fire sale fears