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A family trust established for Austrian property developer Rene Benko has filed for insolvency after being ordered to pay about USD 1 billion to companies linked to Abu Dhabi sovereign wealth fund Mubadala. The insolvency filing by the Laura Private Foundation follows arbitration rulings issued earlier this year by the International Court of Arbitration in Switzerland, which directed the trust to settle claims worth about EUR 900 million. The development comes amid the broader collapse of Benko's Signa property group, once one of Europe's largest real estate conglomerates with holdings including luxury hotels in Venice and Vienna and stakes in retail chains such as Selfridges and Globus. Benko, who was arrested about a year ago, has been convicted in separate insolvency-related fraud cases and is currently appealing the rulings.
A family trust established for Austrian property developer Rene Benko has filed for insolvency after being ordered to pay around USD 1 billion to companies linked to Abu Dhabi sovereign wealth fund Mubadala, marking another development in the financial fallout following the collapse of Benko's real estate empire. Advertisement
The Laura Private Foundation, a trust created for Benko's family, submitted the insolvency filing with a court in Innsbruck, the developer's home city, according to a statement issued by the trust's board. Court authorities confirmed that the insolvency application had been received and that formal proceedings had been opened.
The filing follows arbitration decisions issued earlier this year by the International Court of Arbitration in Switzerland. In two separate rulings delivered in January, the tribunal ordered the trust to pay a total of EUR 900 million, equivalent to about USD 1 billion, to three companies based in the United Arab Emirates.
According to Austrian creditors association KSV 1870, the companies involved in the arbitration claims are linked to Mubadala, the Abu Dhabi sovereign wealth fund. The claims were recognised by the arbitration tribunal, resulting in the payment obligations that triggered the insolvency filing by the trust.
In a statement, the board of the Laura Private Foundation said the insolvency application had been submitted due to the payment obligations arising from the two arbitration awards.
The development comes against the backdrop of the collapse of Signa Group, the property and retail conglomerate founded by Benko, which began to unravel in 2023. The group's failure became Austria's largest corporate insolvency and had significant implications for the European commercial property and retail sectors.
At its peak, Signa held an extensive portfolio of high-profile real estate assets, including luxury five-star hotels and landmark commercial properties across Europe. The group also owned stakes in several retail businesses, including Switzerland's Globus department store chain and British retailer Selfridges.
The financial difficulties facing Signa triggered a series of insolvency proceedings across multiple subsidiaries and related entities as lenders and investors sought to recover outstanding claims. The collapse affected banks, institutional investors and sovereign wealth funds that had exposure to the group's property and retail assets.
Benko himself has faced legal challenges following the downfall of the group. He was arrested about a year ago on suspicion of committing several offences, including fraud linked to insolvency proceedings.
In October last year, Benko was convicted of insolvency-related fraud and sentenced to two years in prison. Two months later, he was convicted again on similar charges and received a suspended sentence.
Benko has denied wrongdoing in the cases and has filed appeals against both convictions. The insolvency of the Laura Private Foundation adds another layer to the ongoing financial and legal consequences stemming from the collapse of the Signa property group.
Source - Reuters
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