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A family trust linked to Austrian real estate developer Rene Benko has filed for insolvency after being ordered to pay about USD 1 billion following arbitration rulings in favour of companies connected to Abu Dhabi's sovereign wealth fund Mubadala Investment Company. The development is another fallout of the collapse of Benko's property group Signa Holding, which entered insolvency in 2023 and triggered one of Europe's largest real estate failures. The trust, named after Benko's daughter, approached a court in Innsbruck after the arbitration decisions created financial obligations it could not meet.
A family trust associated with Austrian real estate developer Rene Benko has filed for insolvency after arbitration rulings required it to pay nearly USD 1 billion to companies linked to Abu Dhabi's sovereign wealth fund Mubadala Investment Company. The filing was made with a court in Innsbruck, which confirmed that insolvency proceedings have been opened. Advertisement
The trust, known as the Laura Private Foundation, said its board of trustees decided to file for insolvency due to payment obligations arising from two arbitration awards. The foundation, named after Benko's daughter, has long been part of the financial structure linked to his business empire.
The arbitration decisions were issued earlier this year by the International Court of Arbitration in Switzerland. The rulings ordered the foundation to pay around 900 million euros, equivalent to roughly USD 1 billion, to three companies from the United Arab Emirates that had raised claims related to financial dealings with Benko's businesses. According to Austria's creditors association KSV 1870, these companies are connected to Mubadala.
Officials from the creditor group indicated that the claims were tied to disputes following the collapse of Benko's property group Signa Holding.
The insolvency filing is the latest development in the broader fallout from the breakdown of Signa, once one of Europe's most ambitious real estate groups. The company expanded across Austria, Germany and Switzerland and built a large portfolio of prime commercial and luxury assets. At its peak, the group owned high-profile properties including five-star hotels in cities such as Venice and Vienna, and held stakes in major department store chains such as Selfridges in the United Kingdom and Globus in Switzerland.
However, the group collapsed in 2023 after rising interest rates and heavy borrowing placed severe pressure on its finances. The failure became the largest corporate insolvency in Austria's history and triggered billions of euros in creditor claims from banks, sovereign funds and institutional investors across Europe. Several major investors and lenders have since been trying to recover their losses through legal actions and arbitration.
Legal troubles have also intensified for Benko personally. He has been in custody since his arrest roughly a year ago in connection with investigations into suspected financial offences, including fraud linked to insolvency proceedings. Courts later found him guilty in two separate cases related to insolvency fraud. In one case he received a prison sentence of two years, while another conviction resulted in a suspended sentence. Benko has denied wrongdoing and is appealing both verdicts.
Investigators and creditors have been examining the role of family foundations, including the Laura Private Foundation, which was established in 2006 by Benko and his mother. Creditors have argued that some of the remaining assets linked to the former property empire may have been held through these structures. The arbitration awards placed the foundation under significant financial pressure, ultimately leading to the insolvency filing.
With the court in Innsbruck formally opening proceedings, administrators will now review the foundation's assets and assess claims from creditors. Observers expect the process to take time, as investigators continue to examine financial flows connected to the wider Signa network and the disputes that followed its collapse.
Source Reuters
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