Update, 12. November 2024
"The company's own insolvency proceedings, the Signa bankruptcy, the ongoing recession and the cost increases since the takeover" are the reasons for the failure of the restructuring. Now it is the insolvency administrator's turn, he is making the decisions as to whether and how to proceed, the furniture chain explained.
The Kika/Leiner management had "done everything humanly possible to enable the continued existence of the company". Under the current conditions, "the renovation of the badly battered furniture store is unfortunately not possible".
Update, 25. September 2023
On 13 June 2023, restructuring proceedings without self-administration were opened via Leiner & Kika Möbelhandels GmbH. More than 500 creditors and 3300 employees were affected. On 25 September, the restructuring plan meeting took place at the St. Pölten Regional Court. The vast majority of creditors agreed to the proposed restructuring plan.
"Hardly any other insolvency proceedings in recent years have been so much in the public eye and have been so strongly charged with emotions," says Gerhard Weinhofer, Managing Director of the creditor protection association Creditreform.
According to KSV1870, the total liabilities amount to € 131.6 million. This includes registered and recognized receivables of €74 million, employee receivables of €31 million for the time being (plus a further €22.7 million from the final settlement) and other receivables of €3.9 million that have yet to be taken into account.
Thanks to the sale and financial support of the owner, as well as the help of the Supernova Group as a landlord, it was possible to operate more positively than the original budget had envisaged, the KSV1870 informs. In the restructuring plan meeting, the debtor offered an improved restructuring plan proposal. Originally, it was planned to pay a quota of 20% within two years. Now the creditors were offered the following: 20%, payable 10% as a cash quota, another 5% within 16 months and the remaining 5% within 24 months, in each case from the acceptance of the restructuring plan. An expert opinion by Deloitte and the opinion of the insolvency administrator had previously shown that only a quota of 6.6% would be possible in the event of a break-up and asset realisation of the company, reports the Austrian Association Creditreform (ÖVC).
In the vote on the improved restructuring plan, both the required head and sum majority were achieved, reports the KSV1870. Therefore, the payment proposal was accepted by the creditors. In addition to the restructuring plan quota, creditors will receive a super quota, payable in two installments – in the first months of 2024 and 2025 respectively. The super ratio to be distributed will be up to 14%. This super ratio represents the amount that could be achieved from the settlement with the former owner, Signa Holding GmbH.
"For the KSV1870, too, the approval of the restructuring plan was the best possible economic decision in order to give the company the chance to achieve sustainable restructuring under the leadership of the new owner and to preserve the 1770 jobs," explains Brigitte Dostal, Head of Corporate Insolvency Vienna/Lower Austria/Bgld. at KSV1870.
Update, 21. August
Today, the examination and report meeting took place at the St. Pölten Regional Court. Total liabilities of €93.3 million were registered by the approximately 450 affected creditors and around 1530 employees. Of this, €12 million had been acknowledged by the insolvency administrator and €81.3 million had been disputed by today's examination hearing. A concrete examination of the disputed claims will be carried out by the insolvency administrator by the time the restructuring plan is decided, KSV1870 informs.
According to KSV1870, the creditor structure shows the following picture: Major creditors in these proceedings are the Republic of Austria with €46.5 million, the Austrian Health Insurance Fund with €3.5 million, the COVID-19 Financing Agency with €3.9 million, and landlords and banks with conditional claims in the amount of €12.1 million. These claims were provisionally disputed, as the insolvency administrator still has to carry out more detailed checks. The demands of the 1530 employees are to be available shortly.
"The successful sale and also the financial resources made available by the owner in the millions make a significant contribution to the liquidity of the company during the restructuring process. Due to the positive continuation prognosis, the St. Pölten Regional Court has approved the continued operation of the company," explains Brigitte Dostal, Head KSV1870 Insolvency Vienna/Lower Austria/Bgld. In the coming weeks, the focus will be on the ongoing review of the financial plan as well as the appropriateness and feasibility of the restructuring plan. The decision on the further fate of the company now lies with the creditors. They will vote on the submitted restructuring plan on September 25.
Update, 15. Juni
Originally, it was communicated that 1900 employees would have to leave Leiner & Kika Möbelhandels GmbH. On June 15, liquidator Volker Leitner corrected the figure downwards, according to diepresse.com. Of the 3296 employees at the furniture chain, around 1300 employees are to be dismissed. The figures are not set in stone. "There is no job guarantee in insolvency proceedings," Leitner said.
In addition, according to diepresse.com, the liquidator spoke of a "very plausible liquidity concept". He was positive that the operational business could be continued after the restructuring, it is said. Eight of 14 Leiner and 15 of 26 Kika stores are to be closed. The closure of the affected locations is to be completed between July 15 and August 15. If the restructuring plan is accepted in the context of the vote on September 25, an end to the procedure "in mid-October is possible," Leitner is quoted on orf.at.
Update, 13. Juni
Today, on 13 June, restructuring proceedings without self-administration were opened at the St. Pölten Regional Court on the assets of Leiner & Kika Möbelhandels GmbH, St. Pölten, on the basis of yesterday's own application, reports Gerhard M. Weinhofer of the Austrian association Creditreform. Lawyer Volker Leitner, St. Pölten, has been appointed as insolvency administrator. Creditors can register their claims via Creditreform until 8 August. The first creditors' meeting will take place on 21 August, the vote on the restructuring plan on 25 September.
Update 12. Juni, 17.30 h
Leiner & Kika Möbelhandels GmbH, based in St. Pölten, has filed an application for the opening of restructuring proceedings without self-administration at the St. Pölten Regional Court, reports Gerhard Weinhofer of the Austrian association Creditreform. According to derstandard.at, the company filed for insolvency by electronic submission on June 12 at 5 p.m. The causes of insolvency lie in increased price pressure and non-compliance with sales expectations, as well as delivery delays due to the corona pandemic and, most recently, the Ukraine war, writes Creditreform.
According to Creditreform, 433 creditors and 3296 employees are affected. Liabilities amount to approximately €132 million (unsecured creditor claims). The company is to be continued in a redimensioned form. The continuation and financing are to be secured. The restructuring plan provides for a quota of 20% payable to creditors within two years, Creditreform informs.
The opening of the proceedings is expected on Tuesday, June 13. Due to the preliminary liabilities, this case is the largest corporate insolvency in 2023 to date.
According to KSV1870, the creditors are essentially employee claims, financial and supplier claims. The debtor company offers all unsecured insolvency creditors a quota of 20%, payable within two years of acceptance of the restructuring plan. According to KSV1870, this is the legal minimum offer.
According to the debtor company, the continuation of 17 Leiner/Kika branches is intended. The insolvency administrator, who has yet to be appointed, will now examine the feasibility of the continuation concept in close cooperation with all parties involved in order to be able to ensure smooth continued operation during the insolvency proceedings.
From today's perspective, according to KSV1870, it cannot be assumed that there could be a large number of insolvencies within the furniture trade in the near future, as was recently the case in the construction industry or in the catering industry.
Update, 7. Juni, 14 Uhr
For the Kika/Leiner Group, restructuring with insolvency proceedings is now being sought. "After examining the economic framework of the company, the restructuring of the company will take place via a restructuring procedure, which will be registered next week," Kika/Leiner announced, according to orf.at. It will probably be an insolvency procedure without self-administration, it is said.
According to derstandard.at, the insolvency application including the restructuring plan is to be filed on Tuesday, June 13, at the regional court in St. Pölten. Leiner & Kika Möbelhandels GmbH is based in the capital of Lower Austria.
The reports surrounding the furniture chain Kika/Leiner are also causing consternation among Austrian furniture manufacturers. "We regret that so many jobs are to be lost and wish those affected that they will quickly find new employment," says Dr. Georg Emprechtinger, Chairman of the Austrian Furniture Industry.
The Austrian furniture manufacturers have long-standing business relationships with Kika/Leiner. However, since furniture manufacturers are massively affected by high inflation and economic uncertainty as well as rising operating costs, Emprechtinger rules out participation in the renovation. He explains: "The furniture business is currently developing very cautiously and we have to control our costs intensively. Therefore, I don't see any room for manufacturers to make concessions, as they have done in the past."
Update, 7. Juni, 10 Uhr
According to orf.at, the new owners of the Kika/Leiner Group are examining the insolvency option. There are great financial difficulties, so all options, including the possibility of restructuring as part of insolvency proceedings, are being examined. A decision on this will be made next week, it is said.
Update, 6. Juni
The new owner of the operating business of the furniture chain Kika/Leiner will close 23 of 40 locations at the end of July, reports orf.at. 1900 of 3900 employees will be dismissed. The central departments and administration are also to be significantly reduced, it is said.
Update, 1. Juni, 14 Uhr
According to orf.at, René Benko's Signa real estate group is also selling the operational Kika/Leiner business. This will go to a management team led by Hermann Wieser with immediate effect.
Wieser was once area manager for eastern Austria at XXXLutz, according to nachrichten.at. Until the beginning of 2015, he was already managing director at Kika/Leiner. Now he is returning to Kika/Leiner with a management team.
1. Juni, 8 Uhr
René Benko's Signa real estate group is selling more than 80 plots of land owned by Leiner & Kika Möbelhandels GmbH to the Supernova Group of German retail store entrepreneur Frank Albert. According to derstandard.at, the purchase price is expected to be just under €500 million. Around 80 locations of the furniture chain will be sold, reports krone.at.
The Signa Group acquired the Kika/Leiner Group in 2018. A year earlier, Benko had taken over the former Leiner flagship store on Vienna's Mariahilfer Straße.
