Dusseldorf. The employees of the 83 Galeria branches have been waiting eagerly for news from Nuremberg since Friday at the latest. There the Federal Employment Agency (BA) decides whether or not the approximately 12,000 employees will receive insolvency money in the next three months.
Meanwhile, it is now clear that the department store chain will continue at least until Wednesday - no matter what the BA decides. As the Handelsblatt learned from circles close to the company, the largest lender to date, Gordon Brothers, has provided a low double-digit million sum for this. The insolvency administrator also informed his business partners that financing was secured until Wednesday.
The corporate financier had already agreed to a credit line of 160 million euros in the summer. It remained unclear whether the current payment goes beyond this or whether this volume is now exhausted. Gordon Brothers himself declined to comment.
On October 2nd, the department store company, which now has its headquarters in Düsseldorf, filed for bankruptcy for the fourth time in six years. In many proceedings, insolvency money is an important instrument for financing the phase between the application and the official opening of the proceedings.
A week ago, the Düsseldorf District Court ordered the preliminary insolvency proceedings for the Galeria department store chain and appointed Frank Kebekus as the preliminary insolvency administrator. As an administrator, Kebekus accompanied the insolvency proceedings for the group in 2020 and 2022.
Galeria's employees had already received three-digit million sums in insolvency money in the last three bankruptcies. This is paid for from a levy borne by the community of all employers.
However, the entitlement to insolvency money only arises when proceedings are opened and covers the last three months beforehand. However, the BA only pays retroactively when bankruptcy is declared.
Until then, punctual wages can only be achieved through pre-financing from a bank, and this requires the approval of the Federal Employment Agency. That's why it's so important that the BA not only approves the insolvency money, but also the pre-financing.
“As hard as it is for the employees, I think it would be logical if the pre-financing of insolvency money were not approved in this case,” says Joachim Ponseck, insolvency law expert at the law firm Baker McKenzie in Frankfurt. “Otherwise, the instrument will probably be used this time too and the majority of the locations will be preserved, only for us to see the next insolvency in a short time,” he warns.
“Such chain insolvencies as at Galeria are largely due to the pre-financing of the insolvency money,” says the expert. Basically, in past bankruptcies, the employees were also deceived to a certain extent by the granting of insolvency money, says Ponseck. “It was suggested to them that they had a long-term, secure job in a future-proof company,” he criticizes. “Otherwise, more of them would certainly have decided to move to another company.”
Since the application was submitted, many experts have commented on the topic of insolvency money. Because: After the previous bankruptcy, Galeria will be in so-called plan monitoring until the middle of next year. This is a period after bankruptcy in which the company has to prove itself.
In the summer of this year, a spokesman for the BA said that companies in this plan monitoring phase normally cannot pay insolvency money. However, the fact that Galeria is currently a new company could influence the decision. Since summer 2024, Galeria has belonged to the US investment company NRDC and an investment company owned by entrepreneur Bernd Beetz, who holds 28.2 percent of the company.
As the Handelsblatt learned, the BA had asked questions, which the insolvency administrator Kebekus had answered by Thursday afternoon. Since then, the information necessary for a decision on insolvency money has been available and consultations are taking place in Nuremberg.
Last Wednesday, insolvency administrator Kebekus informed employees about the status in a 20-minute online call, as Handelsblatt learned from participants. Kebekus told the employees that what they read about Galeria would be unpleasant for them. But he had apparently given them hope at the same time and indicated that things could continue even if the BA did not pay any insolvency money. In this case he could get the money elsewhere.
He did not provide any further details on Wednesday. And since then, according to employees, Kebekus has not contacted them directly.
