(March 11): A private foundation co-founded by former real estate tycoon Rene Benko has collapsed into insolvency after a court ruled it owed sovereign wealth fund Mubadala Investment Co about €1 billion on soured investments.
Laura Privatstiftung filed for insolvency in Innsbruck, deeming it didn’t have the means to meet its obligations to Mubadala, it said in a statement. The foundation was co-founded by Benko in 2006, and some of its units became deeply intertwined with the financing of his sprawling Signa real estate and retail empire.
Mubadala pursued Laura Privatstiftung as well as other companies and trusts linked to Benko at the International Court of Arbitration. The court found it had the right to recoup funds from some of them related to its investments with Signa.
The arbitration is just one strand of the legal battles resulting from the financial meltdown of Signa which at its height held a portfolio worth more than €20 billion of some of Europe’s most luxurious real estate, including London’s Selfridges department store and Berlin’s KaDeWe.
Rising interest rates and regulatory scrutiny of banks’ exposure to Signa pushed its largest holding companies into insolvency in 2023. Creditors and administrators are still working their way through the damage to recover money.
Laura Privatstiftung fully owns at least 25 subsidiaries in Austria, and has stakes in 10 others, the KSV1870 creditor association said in a separate statement. It may also hold business interests abroad, it said.
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The insolvency of the private foundation may have a knock-on effect for the other insolvent Signa entities, whose administrators have asserted claims against the foundation in an attempt to claw back cash for creditors.
Benko is being held in custody in Austria and has been found guilty of insolvency fraud. He has appealed the verdicts and denies wrongdoing. Prosecutors in several other nations are investigating further allegations of fraud.
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