Retail: Galeria employees receive insolvency money

Dusseldorf. The employees of the once again insolvent Galeria department store chain are receiving insolvency money from the Federal Employment Agency. “After intensive examination of the complex facts, there is a fundamental claim to insolvency money based on the current legal situation,” said an authority spokesman.

The money will be paid for 9,650 employees. Galeria currently employs a total of 11,250 people, although a separate insolvency application is underway for some of them - such as the catering and food division. The Federal Agency struggled with the decision for days and, according to dpa information, requested documents from the insolvency administrator several times.

Among other things, it was considered sensitive that the consequences of the previous insolvency in 2024 had not yet subsided. In the meantime, however, Galeria had transferred the operation to a new company that is not formally legally in the so-called plan monitoring. Whether this transfer created a legal right to insolvency money was questioned for a long time.

The insolvency money should be pre-financed through a bank so that it can be paid out quickly and reach the employees' accounts. This means that a prerequisite is met in order to initially continue business operations. “The employees will therefore receive their wages and salaries for the months of October, November and December,” said Galeria.

“The approval of the employment agency to pay the insolvency money and pre-financing is an important prerequisite for securing the operational business for the coming months,” said the provisional Galeria insolvency administrator Frank Kebekus. On this basis, it is important to continue business operations reliably and to explore the strategic options for Galeria. Comprehensive agreements have been reached with suppliers, financing partners and other parties so that Galeria is operationally stable for the important Christmas business, he said.

Kebekus expressly thanked “for the enormous commitment and trust of all employees as well as the constructive approach of important parties such as suppliers, financiers and employee representatives as well as the employment agency”.

Insolvency money is paid once by the Federal Employment Agency for a maximum period of three months before the opening of insolvency proceedings, but usually retroactively. It usually corresponds to the net salary.

The right to payment only arises when the procedure is opened. However, it can be pre-financed by assigning the claims to a bank. The employees last received their September salaries from their employer; they were paid out at the end of September.

According to reports, the salaries of all 11,250 Galeria employees total almost 25 million euros per month. Last week, insolvency experts expressed skepticism about the chances of receiving insolvency money. The money is financed through a levy from employers.

On October 2nd, Galeria filed for insolvency at the Düsseldorf District Court due to insolvency - for the fourth time in six years. The court then ordered preliminary insolvency proceedings (ref: 502 IN 258/26). Business operations in the 83 branches will continue for the time being. It remains to be seen whether and which locations will have to close.