Galeria in crisis: trouble about insolvency

While there is apparently a dispute at the top of the company about the renewed bankruptcy, the Galeria department store chain has a new administrator. The Düsseldorf district court announced that lawyer Frank Kebekus had been appointed as provisional insolvency administrator. Galeria had previously submitted an application last Friday. It is the fourth bankruptcy within six years. Operations in the 83 branches with around 12,000 employees will continue for the time being.

The fact that the management went to the insolvency court is met with incomprehension by Galeria co-owner Bernd Beetz. He believes bankruptcy is “fundamentally avoidable,” Beetz told the “Bild” newspaper on Monday. The shareholders took over Galeria in a difficult situation and invested a lot of capital.

The German manager Beetz, who owns around a quarter of the company, only took over the ailing department store chain in 2024 together with the US investment company NRDC Equity Partners. This was preceded by an insolvency in which nine branches were closed. At that time, Galeria belonged to the now imprisoned Austrian investor René Benko, whose corporate empire had previously collapsed.

The Verdi service union holds management and owners responsible for the situation. "Horse-raising management errors have led to this development. In recent years, no sustainable investments have been made by the shareholders," said Silke Zimmer from the Verdi federal board. Quick clarification is needed as to what will happen next for the 12,000 employees.

It is currently not clear whether they will receive insolvency money. Employees receive wage replacement benefits from the employment agency for up to three months in the event of insolvency. However, employees can lose their entitlement if their company is still in so-called plan monitoring after a previous insolvency. And at Galeria, the Essen district court has not yet lifted this monitoring in the wake of the 2024 bankruptcy.